Kromek Group PLC (AIM:KMK), the radiation and bio-detection technology company, said commercial momentum quickened more rapidly than anticipated in the second half of the fiscal year.
In a trading update covering the year to the end of April, the AIM-listed company said it continued to deliver on its existing contracts while also winning new and repeat orders in the November-April period.
The additional contract wins contributed to the group achieving strong revenue growth in the second half of the year over the first half and Kromek expects to report revenue of £12.1mln for the full year, an increase of around 16%.
However, the group continued to be affected by supply chain issues as detailed in the interim results, released back in January. Specifically, the late arrival of certain components prevented the completion of orders totalling roughly £2.9mln that were scheduled to be delivered before the year-end.
These orders have now begun to be shipped and the revenue is expected to be recognised in the first half of the current financial year. As a result, the group expects to report an adjusted underlying full-year loss (LBITDA) of around £1.2mln.
Despite the significant increase in inventories due to the delayed shipment of certain orders, the group had cash and cash equivalents at the end of April of about £5.1mln. Kromek believes that the group has sufficient cash available for the foreseeable future.
For the current financial year, Kromek continues to expect accelerated growth in both of its segments and said it should achieve substantial revenue growth over the previous fiscal year.
The group said it has excellent visibility over full-year revenue forecasts with 50% contracted, 37% going through contract negotiation and the remaining 13% being provided by the group's regular repeat order business. This is the highest level of visibility that the group has ever had at the start of a financial year, Kromek said.
In particular, the current geopolitical environment is driving increased interest from government agencies in Kromek's products in the chemical, biological, radiological and nuclear (CBRN) defence detection segment. In advanced imaging, Kromek's CZT-based products continue to be in high demand from both its existing and new original equipment manufacturing customers.
Shares in Kromek were up 8.6% at 8.8p in the first half-hour of trading on Monday.