Kromek emerges from the 2021 financial year in a stronger position

Kromek Group plc (LON:KMK), a worldwide supplier of detection technology focusing on the medical, security screening and nuclear markets, has announced its final results for the year ended 30 April 2021.

Financial Summary

·      Revenue of £10.4m (2020: £13.1m)

·      Gross margin was 48.4% (2020: 47.3%)

·      Adjusted EBITDA* loss of £1.7m (2020: £0.4m loss)

·      Loss before tax was £6.3m (2020: £18.3m loss)

·      Cash and cash equivalents at 30 April 2021 were £15.6m (30 April 2020: £9.4m)

*Adjusted EBITDA is defined as earnings before interest, taxation, depreciation, amortisation, exceptional items, early settlement discounts and share-based payments. For further details, see the Financial Review below.

Operational Summary

·         Resumption of orders and shipments across all segments in final two months of the first half, following the impact of COVID-19, with increased commercial activity in the second half, resulting in revenue for H2 2021 being 26% higher than H1 2021

·         Medical imaging segment returned to growth trajectory in the second half of the year  

o   Ramp up in delivery under medical imaging contract expected to be worth $58.1m as the customer began installing its scanner in multiple countries

o   Received a $600,000 order from an OEM customer for detectors to be used in niche SPECT applications

o   Progressed development programme for ultra-low dose MBI technology and entered the new area of improving outcomes from cancer surgery  

·         Continuing commercial traction and development of nuclear security products, with sales in Europe, the US and Asia

o   Expansion of global footprint with sales commencing in 9 new countries and engagement of 9 new distributors  

o   Continued to supply products to government agencies in the US and UK; the Irish Civil Defence; and the European Commission 

o   Completion of development project with the Defense Threat Reduction Agency (“DTRA”), an agency of the US Department of Defense, for a ruggedised small form factor nuclear radiation detector for military applications 

o   Launch of next-generation D3 PRD and D5 RIID high-performance radiation detectors  

·         24 new customers won in the civil nuclear segment and widening interest for drone-based radiation mapping system, including sales to the civil emergency services sector 

·         Significant progress in fast-growing bio-security market  

o   Awarded $5.2m contract extension in the year and a further $6m post period by the Defense Advanced Research Projects Agency (“DARPA”), an agency of the US Department of Defense, to advance the development of a mobile wide-area bio-security system capable of detecting and identifying airborne pathogens  

·         Commenced field trials in an airport and, post period, in schools, airports and other locations of an airborne COVID-19 detection system under a £1.25m project with funding from Innovate UK

·         Received first commercial order from security screening OEM customer that achieved highest level of European liquid explosive detection certification for cabin baggage for its scanner 

·         Continued improvement in CZT manufacturing processes in the UK and US facilities, including introduction of further process automation

·         3 new patents were filed and 10 were granted during the year 

Dr Arnab Basu, CEO of Kromek, said: Against a backdrop of significant global uncertainty, Kromek has emerged from the 2021 financial year in a stronger position than when we entered. While the disruption across our markets in the early part of the year impacted our sales, our revenue for the second half was 26% above the first half, with the strong momentum continuing post year end. In particular, we are seeing continued traction in the medical imaging segment as our customers increasingly roll out their products incorporating our technology. We are extremely encouraged by the results that we are receiving from the piloting of our biological-threat detection solution. We also believe that we are well-positioned to benefit from the increase in government defence and security spending globally, including in the UK, as evidenced by our announcement today of the receipt of our first major order for our D5 RIID.

As a result, and with excellent visibility over full year forecasts, we are on track to deliver our highest ever annual revenue for the full year to 30 April 2022, representing significant growth over 2021. Consequently, and combined with the successful fundraising completed in the year under review, we are well-placed to capitalise on the substantial opportunities across our business and the Board continues to look to the future with increased confidence.”

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