REG - Kromek Group PLC - Business and Trading Update

KromekAnnouncement

16/05/2022 07:00

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220516:nRSP5366La&default-theme=true

RNS Number : 5366L  Kromek Group PLC  16 May 2022

16 May 2022

 

Kromek Group plc

("Kromek" or the "Group")

 

Business and Trading Update

 

Kromek (AIM: KMK), a leading developer of radiation and bio-detection
technology solutions for the advanced imaging and CBRN detection segments,
provides an update on business and trading for the year ended 30 April 2022.

 

As noted in the Group's interim results announcement in January 2022, Kromek
continued to deliver on its existing contracts as well as win new and repeat
orders during the first half of the year. In H2 2022, the commercial momentum
increased, ahead of management's expectations, including £5.9m in new orders
being won in the final quarter, primarily in the CBRN detection segment.

 

The additional contract wins contributed to the Group achieving strong revenue
growth in H2 over H1 2022 and Kromek expects to report revenue of £12.1m for
the year ended 30 April 2022 (FY 2021: £10.4m), an increase of approximately
16%. However, the Group continued to be impacted by supply chain issues as
detailed in the interim results. Specifically, the late arrival of certain
components prevented the completion of orders totalling approximately £2.9m
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 EBITDA loss for the year ended 30 April 2022 of approximately
£1.2m.

 

The Group continued to maintain tight cost control, improve collections, and
manage cash flow. As a result, and despite the significant increase in
inventories due to the delayed shipment of certain orders, the Group had cash
and cash equivalents at 30 April 2022 of approximately £5.1m. Kromek expects
cash inflows following the delivery and payment of the aforementioned £2.9m
orders; the unwinding of high inventory levels; and a continued improvement in
customer collections. Consequently, the Board 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 its segments and is forecasting substantial revenue growth in the year
to 30 April 2023. The Group 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.

 

The anticipated growth is based on delivery under existing long-term
contracts, new orders won in H2 2022, and the sustained demand being received
for its products. In particular, the current geo-political environment is
driving increased interest from government agencies in Kromek's products in
the CBRN detection segment. In advanced imaging, Kromek's CZT-based products
continue to be in high demand from both its existing and new OEM customers.

 

Accordingly, the Board remains confident of the Group's prospects and of
delivering further strong growth in the current year. The level of contracted
revenue continues to build, further improving revenue visibility and the Board
is enthused by the substantial opportunities for Kromek and its technology.

 

The Group will provide further information at the time of its full year
results announcement in July 2022.

 

For further information, please contact:

 

 Kromek Group plc
 Arnab Basu, CEO                                                 +44 (0)1740 626 060

 Paul Farquhar, CFO

 finnCap Ltd (Nominated Adviser and Broker)
 Geoff Nash/Kate Bannatyne/George Dollemore - Corporate Finance  +44 (0)20 7220 0500
 Tim Redfern/Charlotte Sutcliffe - ECM

 Luther Pendragon (Financial PR)
 Harry Chathli/Claire Norbury                                    +44 (0)20 7618 9100

 

 

About Kromek Group plc

 

Kromek Group plc is a leading developer of radiation detection and
bio-detection technology solutions for the advanced imaging and CBRN detection
segments. Headquartered in County Durham, UK, Kromek has manufacturing
operations in the UK and US, delivering on the vision of enhancing the quality
of life through innovative detection technology solutions.

 

The advanced imaging segment comprises the medical (including CT and SPECT),
security and industrial markets. Kromek provides its OEM customers with
detector components, based on its core cadmium zinc telluride (CZT) platform,
to enable better detection of diseases such as cancer and Alzheimer's,
contamination in industrial manufacture and explosives in aviation settings.

 

In CBRN detection, the Group provides nuclear radiation detection solutions to
the global homeland defence and security market. Kromek's compact, handheld,
high-performance radiation detectors, based on advanced scintillation
technology, are primarily used to protect critical infrastructure and urban
environments from the threat of 'dirty bombs'.

 

The Group is also developing bio-security solutions in the CBRN detection
segment. These consist of fully automated and autonomous systems to detect a
wide range of airborne pathogens.

 

Kromek is listed on AIM, a market of the London Stock Exchange, under the
trading symbol 'KMK'.

 

Further information is available at www.kromek.com (http://www.kromek.com) .

 

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  TSTSFLEDIEESESI