Kromek announce year end results

Kromek (AIM: KMK), a worldwide supplier of detection technology focusing on the medical, security screening and nuclear markets, announces its final results for the year ended 30 April 2019.

 

Financial Highlights

  • Revenue increased 23% to £14.5m (2017/18: £11.8m)
  • Product sales accounted for 83% of total revenues (2017/18: 81%), representing a 25% increase in value
  • Gross margin improved to 57.2% (2017/18: 56.4%)
  • Adjusted EBITDA* increased fourfold to £2.0m (2017/18: £0.5m)
  • Loss before tax for the year reduced to £1.3m (2017/18: £2.5m loss)
  • Cash and cash equivalents at 30 April 2019 were £20.6m (30 April 2018: £9.5m), following a successful fundraising of £21.0m during the second half of the year

*Adjusted EBITDA defined as earnings before interest, taxation, depreciation, amortisation, other income and share-based payments. For a reconciliation, see the Financial Review below.

 

Operational Highlights

  • Milestone year with growth driven by SPECT products in medical imaging and D3S platform in nuclear detection – and delivered key target of increasing adjusted EBITDA
  • Increasing commercial traction across Kromek’s portfolio of product families with the award of high-value, multi-year contracts from commercial and large government customers worldwide giving greater visibility
  • Successfully commenced operations from new high-volume manufacturing facility in US following relocation to purpose-built premises in Pittsburgh to cater for increased demand in medical imaging
  • Fundraise in second half enables the Group to significantly expand future capacity and efficiencies in US and UK manufacturing
  • 11 new patents were filed and 16 were granted during the year

Medical Imaging

  • Awarded a significant contract, expected to be worth a minimum of $58.1m over a seven-year period, by an existing OEM customer to provide CZT detectors and associated advanced electronics to be used in state-of-the-art medical imaging systems
  • New OEM customer in the nuclear medicine instrumentation market awarded a $700k contract to be delivered over 18 months
  • Received repeat orders from customers in the Bone Mineral Densitometry and gamma detection markets
  • Continued to advance towards full clinical validation of Kromek’s CZT-based SPECT detector system

Nuclear Detection

  • D3S platform sold in 18 countries across Europe and Asia as well as in the US
  • Awarded a $1.8m contract by DTRA for two-year project to develop ruggedised, small form-factor D3S platform for military use
  • Awarded a $2.0m contract by DARPA to develop, over a 12-month period, a proof-of-concept device for a vehicle-mounted biological-threat identifier – Kromek’s first contract for biological threat detection
  • Secured a new nuclear security OEM customer with a three-year contract worth at least $1.4m
  • Won several new customers in the civil nuclear sector, including the Spanish Army, and added new distributors in Europe and Asia

 

Security Screening

  • Awarded a two-year $1.5m contract by the US Department of Homeland Security to develop CZT detector modules for commercial off-the-shelf detectors for advanced X-ray systems for passenger baggage screening 
  • Won a new five-year $7.8m contract from an existing OEM customer to provide customised detector modules for incorporation in baggage screening products
  • Received a $2.7m order expansion under five-year security screening contract, increasing the total value to a minimum of $5.8m

Dr Arnab Basu, CEO of Kromek, said: “This was a milestone year for Kromek as we delivered on all of our objectives, including our key target of growing adjusted EBITDA. We made progress across our business segments as we continued to execute on previously-signed agreements as well as win new, multi-year contracts from commercial and large government customers worldwide. We significantly strengthened the foundations of our business with the successful relocation of our US operations to a new purpose-built facility, and raised £21m to enhance our UK and US manufacturing capabilities and to support expansion in our key growth areas of SPECT in medical imaging and our D3S products in nuclear detection.

“Looking ahead, we entered the 2019/20 fiscal year in a stronger position than ever before. With the increasing market adoption of customers' next-generation products that incorporate our radiation detection solutions, we are receiving increasing demand from existing customers as well as interest from potential customers – and we are well-placed to capitalise on these opportunities. The momentum of new contract wins has continued, providing us with greater visibility over revenue. As a result, we are confident of delivering growth for full year 2019/20, in line with market expectations, and continue to look to the future with confidence.”

Tags: Equipment, CBRNe, Contract

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