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Kromek Group hails order momentum across all three divisions

“We won US$80mln of new contracts to make the total US$145mln over the past three years"
Applications for hand-held nuclear detector are growing


  • Developer and supplier of radiation detection products

  • Sells to medical, security screening and nuclear markets

  • Operates in UK and US with international distribution network


What Kromek does

Kromek Group PLC (LON:KMK) is a developer and supplier of radiation detection products for the medical, security screening and nuclear markets.

The Company’s products are based on cadmium zinc telluride (CZT), an alloy used primarily for x-ray and gamma radiation detection, as well as other technologies.

The group has operations in the UK and the US and sells its products internationally through a network of distributors, original equipment manufacturers (OEMs) and direct sales.


How is it doing

A confident Kromek predicted further growth ahead as annual revenues rose by more than a fifth and underlying profits jumped four-fold.

Momentum is strong across all business areas of nuclear detection, medical scanners and security screening said Arnab Basu, chief executive.

Kromek recently won the largest order in its history (worth US$58.1mln) to supply CZT medical scanners to a customer over the next seven years.

Revenues to April rose 23% to £14.5mln while underlying profits [EBITDA] jumped to £2mln from £0.5mln.

Losses were reduced to £1.3mln from £2.5mln.


What the boss says: Arnab Basu, chief executive

“The last year (2018/19) was a milestone for us.

“We won US$80mln of new contracts to make the total US$145mln over the past three years.

“As these contracts are multi-year in nature have visibility on 80% of revenues this year as well.

 “All these developments are the tip of the iceberg and that over the next 10 years Kromek could see revenue opportunities of nearly US$1bn.





Inflexion points

  • Additional orders in all three divisions
  • Three new contracts for D3S nuclear detection platform in the UK, US and Europe
  • Airport safety standards tightening around world
  • Nuclear detection system now being incorporated into drones
  • New opportunities in biological detection
  • Company has new manufacturing plants in US and UK
  • Cash at year end of £20mln


What the broker says

In a July note, analysts at Cantor Fitzgerald forecast that Kromek would achieve cash breakeven this year.

The broker added that they expected revenue growth to continue in the “mid- to high-teens range”, adding that the group’s medical imaging arm was the “key medium-term driver” of growth.

Cantor also said that the Company’s nuclear and security screening offerings would provide “more immediately realisable earnings and cash”.

The broker has Kromek rated at a 'buy' with a price target of 45p, an 84% premium on the firm's close price on 11 July.

With the shares trading at 24.5p as of 11 July, Kromek carries a market cap of £84.4mln.

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