Interim Results
Multi-year agreements signed with Siemens Healthineers post period will deliver profitability in the current financial year
Kromek Group plc (AIM: KMK), a leading developer of radiation and bio-detection technology solutions for the advanced imaging and CBRN detection segments, announces its interim results for the six months ended 31 October 2024.
Multi-year Agreements with Siemens Healthineers
Post period, as also announced today, Kromek has signed agreements with Siemens Medical Solutions USA, Inc. (“Siemens Healthineers”) to enable the production of cadmium zinc telluride (“CZT”) detectors for single photon emission computed tomography (“SPECT”) application pursuant to which:
- Under the Enablement Agreement, the Group will be paid a total of $37.5m in cash in four installments over a four-year period, with the first installment of $25.0m to be received in the current financial year, of which a material amount will be recognised as revenue
- Over a four-year period, Kromek will:
- transfer 15 of its existing 174 furnaces for CZT production to Siemens Healthineers
- provide Siemens Healthineers with all know-how, IP and related services for CZT-based SPECT detector production
- All know-how and IP will be provided and licensed on a non-exclusive basis. Accordingly, Kromek is unencumbered from continuing to utilise its know-how and IP and supplying other OEMs in SPECT or other advanced imaging markets
- In addition, Kromek is expected to supply Siemens Healthineers with CZT-based detector tiles over the four-year period, which the Directors believe will make a material contribution to advanced imaging revenue from the second year of the agreement onwards
Impact on Kromek of Agreements with Siemens Healthineers
- The Group expects to become profitable from the current financial year, with profit for FY 2025 significantly ahead of market expectations
- Debt will be reduced and the balance sheet will be significantly strengthened
- Kromek intends to continue producing CZT for the SPECT and computed tomography (“CT”) markets utilising the remaining 159 furnaces it owns
- As the largest independent producer and supplier of CZT, and with a significantly strengthened balance sheet, Kromek is strategically positioned for sustained revenue growth and profitability
Financial Summary for H1 2025
- Revenue was £3.7m (H1 2024: £7.1m)
- Gross margin improved to 56.9% (H1 2024: 54.2%)
- Adjusted EBITDA loss of £2.3m (H1 2024: £0.1m loss)*
- Loss before tax was £5.7m (H1 2024: £3.5m loss)
- Cash and cash equivalents at 31 October 2024 were £0.6m (30 April 2024: £0.5m)
*A reconciliation of adjusted EBITDA can be found in the Financial Review.
Operational Summary for H1 2025
Advanced Imaging
- Sustained delivery under landmark collaboration contracts and other component supply agreements, with customers including recognised Tier 1 OEMs, Analogic and Spectrum Dynamics
- Continued to make progress under the ultra-low dose molecular breast imaging programme funded by Innovate UK
CBRN Detection
- Awarded a contract worth £2.0m from the UK Ministry of Defence for the supply of the Group’s D5 RIID along with its Alpha Beta probe attachment and ancillary products
- Selected under two new UK Government frameworks, each lasting four years, designed to enhance the UK’s systems and capabilities for ensuring public safety and security:
- Kromek’s D3M detector was named as the Personal Radiation Detector under the UK Government Resilience Framework, with a first order already received under this framework
- Selected as a supplier under the UK Government’s Radiological Nuclear Detection Framework
Biological-Threat Detection
- Continued to progress the development of biological-threat detection systems under contracts with a UK Government department and the US Department of Homeland Security
Manufacturing and IP
- Continued to execute on programmes for the expansion of production capacity and process automation, particularly at its US facility, resulting in greater manufacturing productivity and cost efficiency
- Applied for three new patents during the period
Dr Arnab Basu, CEO of Kromek, said: “As we stated at the time of the full year results in October last year, Kromek was actively engaged with OEMs to drive delivery of products and monetisation of the valuable intellectual property the Group has developed in the advanced imaging area. We also said we were confident that these initiatives would benefit the Group and drive a significant increase in both revenue and cash generation in the second half of FY 2025. Today’s announcement is an exciting moment as both Siemens Healthineers and Kromek are aligned in our vision to enhance healthcare through technological advancements.
“The initial $25.0m payment from Siemens Healthineers will be used to support the delivery of various milestones under the agreements, significantly reduce our debt and strengthen our balance sheet, ultimately enhancing our operational capabilities. These significant agreements enable us to deliver profitability in FY 2025, significantly ahead of market expectations and lay the groundwork for further growth in revenues and sustainable profitability beyond that period.
“Looking beyond FY 2025, we expect to deliver growth in revenues for the fifth year in a row in FY 2026 and remain profitable as we continue to deliver on our agreement with Siemens Healthineers and our other OEM customers as well as the CBRN contracts won with governmental agencies in UK and abroad. Consequently, the Board looks to the future with confidence. ”
For further information, please contact:
Kromek Group plc |
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Arnab Basu, CEO Paul Farquhar, CFO |
+44 (0)1740 626 060 |
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Cavendish Capital Markets Limited (Nominated Adviser and Broker) |
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Geoff Nash/Giles Balleny/Seamus Fricker – Corporate Finance Tim Redfern – ECM Michael Johnson/Tamar Cranford-Smith – Sales |
+44 (0)20 7220 0500
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Gracechurch Group (Financial PR) |
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Harry Chathli/Claire Norbury/Henry Gamble |
+44 (0)20 4582 3500
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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 and solid-state readout technology, are primarily used to protect critical infrastructure, events, personnel 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’.
The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014. Upon the publication of this announcement via the Regulatory Information Service, this inside information is now considered to be in the public domain.