Radiation detection specialist Kromek expects to report a £1.2m loss after supply chain issues pushed back completion dates for some of its orders.
The Durham University spin-out, which supplies its products to the medical, security and industrial sectors, has issued a trading update for the full year ended April 30 2022, highlighting rising demand and new contract wins.
But the NETPark based firm, a leading developer of radiation detection and bio-detection technology solutions, said it had was also hit by supply chain struggles, which led to delays on some orders it had expected to finish before the year end.
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As a result, the Group expects to report an adjusted EBITDA loss for the year ended 30 April 2022 of approximately £1.2m.
In the trading update Kromek said that commercial mometum increased in the second half of the year – ahead of management’s expectations – winning £5.9m in new orders in the final quarter, primarily in the CBRN (chemical, biological, radiological and nuclear materials) detection segment.
The rise in orders means Kromek expects to report revenue of £12.1m for the full year, up 16% on the previous year’s £10.4m.
But the supply chain issues and late arrival of components prevented the completion of orders totalling around £2.9m, that had been scheduled to be delivered before the year end.
The firm has now started to ship out the delayed orders, and the revenue is expected to be recognised in the first half of the current financial year.
The group said it continued to maintain tight cost control, improve collections, and manage cash flow and as of April 30 had cash and cash equivalents of approximately £5.1m.
For the current financial year, Kromek continues to expect accelerated growth and is forecasting substantial revenue growth, based on delivery of existing long-term contracts, new orders won in the second half of the last financial year, and the sustained demand for its products.
It said: “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.”
Dr Arnab Basu, CEO of Kromek Group plc, added: “Recent challenges in the supply chain for electronic components caused some contract deliveries to be temporarily delayed in the period. All of these are now on track to be delivered over the coming months. The demand for Kromek’s products continues to grow, with a total of £5.9m of new contracts won in the last three months.
“Kromek enters the new fiscal year with the highest ever revenue visibility, driven by the strength of our offering and demand in our sectors, especially in radiation detection, enhanced as a result of the recent geo-political conditions. We expect to see this trend continuing in the foreseeable future.”
