Kromek Group says annual performance is ‘in line’ with market expectations
(KMK ) has achieved ‘significant sequential revenue growth’ in 2H after entering the period with an extensive commercial pipeline and increased commercial activity.
The Company, which operates as a global supplier of detection technology focusing on the medical, security screening and nuclear markets, released a trading update ahead of its results for the year ended 30 April 2021 which the group expects to publish in July 2021.
In its previous half-year results announcement, Kromek said both orders and shipments across all of its segments had resumed in the final two months of the first half of the year.
As such, the Board told investors that it was pleased to enter H2 2020/21 with an extensive commercial pipeline, adding that the group was experiencing increased commercial activity.
In this morning’s statement the firm outlined that it continues to maintain tight cost control, improve collections and manage cash flow. It said this ‘conscientious management’ has resulted in its cash position at 30 April 2021 being slightly ahead of market expectations.
To date, the company said this momentum has continued throughout the second half as it delivered on previously awarded contracts and won new orders. As a result, the Group has achieved significant sequential revenue growth in H2 over H1 2020/21 and expects to report revenue and EBITDA for the year ended 30 April 2021 in line with market expectations.
Shares in Kromek Group have increased by over 40% in value since the beginning of 2021. The stock was trading 0.32% higher this morning at 15.7p following the announcement.
Kromek said it has witnessed progress made across all of its business units during 2H; In the Medical Imaging segment, Kromek's customers increasingly rolled out their next-generation products, based on the Group's technology, such as the Group's OEM customer that previously awarded a medical imaging contract expected to be worth up to $58.1m.
Specifically, the installation of customer's medical imaging scanners, which is occurring in multiple countries, saw a ramp up in the second half of the year as planned, it reported.
In the Nuclear Security segment, Kromek received new orders from government customers for D3S-related technologies including a contract extension from a customer working with a European government to detect and protect against potential nuclear threats.
Kromek said it added a new customer, a US government agency, for its D3S-ID product, received repeat orders from a US government customer for its CZT detectors for nuclear security applications, and received orders from the European Commission's Directorate-General for Migration and Home Affairs for its D3S Drone radiation detectors.
Kromek also received orders in the Security Screening segment, including for CZT modules to be designed into an advanced baggage screening system of a new US-based customer.
Kromek said it remains excited about the potential for its new market segment of Biological Threat Detection. During 2H, Kromek commenced piloting its airborne COVID-19 detection solution at an airport and at another public place which is progressing ‘according to plan’.
Consequently, and combined with the successful fundraising completed in the second half of 2020/21, the Group said it is “well-placed to capitalise on the opportunities across its business and the Board continues to look to the future with increased confidence.”
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