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Kromek expects revenues to jump this year as demand continues to grow

The radiation detection specialist is expecting revenues to grow by at least 40% this year after spending a couple of years laying the foundations
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Kromek’s technology can be applied to the medical, nuclear or security screening markets

Earlier this year, Kromek Group PLC (LON:KMK) said it was seeing increasing interest in its radiation detection technologies, and if recent contract wins are anything to go by, it certainly wasn’t overegging the pudding.

The company – whose technology is used in everything from screening for cancers to sniffing out nuclear devices – has won several large contracts in recent months.

New multi-years, multi-million pound contracts

Only last month it bagged a five-year contract worth US$5.38mln with an existing customer which will incorporate its cadmium zinc telluride (CZT)-based detector modules into a new medical diagnostics product.

READ: Kromek lands five-year contract worth at least US$5.38mln

READ: Kromek bags another multi-year, multi-million pound contract

It followed that up with another five-year, US$2mln agreement with a new customer which will use its technology in its baggage security screening systems.

“This agreement further demonstrates the demand for our products and technology as all OEMs in this arena begin upgrading their legacy systems to bring them in line to detect modern day threats,” said chief executive Arnab Basu.

That's on top of several other decent contracts secured earlier in the year, including a US$3.1mln security screening deal with an unnamed US customer in the homeland security marketplace.

High performance radiation detection

The company is the developer of high performance radiation detection products based on cadmium zinc telluride (CZT) and other advanced technologies.

Using its core platforms, Kromek designs, develops and produces x-ray and gamma photon imaging and radiation detection products for the medical, security screening and nuclear markets.

They provide high resolution information on material composition and structure.

This means they can be used in many applications, ranging from the identification of cancerous tissues to hazardous materials, such as explosives, and the analysis of radioactive materials.

Kromek operates a vertically integrated technology. What this means practically is it offers customers core technology components as well finished products such detectors, including software, electronics and application specific integrated circuits.

While based in the north-east, the business, which employs 100, has operations in California and Pennsylvania and sells internationally through distributors and direct to manufacturers.

Companies moving towards CZT technology

As Basu alluded to, the message from Kromek is that more and more companies are looking to move away from traditional detector technology to CZT.

Compared to the likes of silicon and germanium detectors, CZT operates at room temperature and can process more than 10mln photons / second / mm^2 (that’s a good thing).

“The unique combination of spectroscopy and very high count rate capability at room temperature makes CZT an ideal detector solution for Medical, Industrial, Homeland Security and Laboratory applications,” the Kromek website reads.

Starting to benefit from hard work over past couple of years

Back in April, Kromek predicted a “step-change” in revenue growth given the increasing demand it is now seeing for its products.

The Durham-headquartered group is expecting revenues to grow by at least 40% this year, reaping the rewards of two years’ worth of hard work during which it has been laying the foundations.

READ: Kromek undergoing commercial transformation...

READ: Kromek raises £21mln...

WATCH: Boss 'very pleased' with fundraise...

In January it raised £21mln from investors which has allowed it to tap into the huge market opportunities and to invest in research and development, which keeps the company at the cutting edge of radiation technology.

In the year ended April 30 Kromek generated revenues of £8.7mln, up from £8.3mln. As might be expected from a business setting out on the commercial phase of its development, it was loss-making – to the tune of £1.5mln.

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Kromek Group PLC Timeline

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