TIDMKMK
RNS Number : 5037K
Kromek Group PLC
17 April 2015
17 April 2015
Kromek Group plc
("Kromek" or the "Company")
Business and Trading Update
Kromek, a radiation detection technology company focusing on the
medical, security and nuclear markets, provides a business and
trading update ahead of its financial year end on 30 April
2015.
As the Company stated in its interim results on 14 January 2015
("the Interims"), whilst the increasing order book and a strong
pipeline provides Kromek with improved visibility going forward,
dealing with government agencies and OEMs makes it difficult to
predict the exact timing of some of the contracts. Recently, this
has resulted in orders worth GBP0.6m being contracted, but
delivery, and therefore invoicing, being postponed by the customer;
GBP0.4m in orders being received and in the process of being
delivered according to the contract specifications, with delivery
scheduled for the next fiscal year. The Company is in an advanced
stage in negotiating contracts for further orders worth over
GBP0.5m, which would now be delivered in the next financial
year.
Consequently, the Company now expects to report full year
revenues for the twelve months ending 30 April 2015 of GBP8.1m.
This represents year-on-year growth of 38% and growth from the
first half to the second half of 53% (which, for the reasons
detailed above, is lower than the 100% sequential growth
anticipated in the Interims). However, consistent with what was
stated at the time of the Interims, based on current favourable
revenue mix and tight cost control the Company expects full year
EBITDA to be in line with market expectations, including being
EBITDA-positive for the second six months of the year.
The Company achieved its growth primarily through expansion in
the number and scope of customer-funded development projects as
well as direct sales of both end-user and component-level products
for OEMs. Asannounced in February 2015, the Company won contracts
across all three of its target segments and in multiple
geographies. The Company's investment in additional sales and
marketing resources is resulting in increased interest in its
products and technology from a greater number of companies and
organisations.
Working Capital Facility and Cash Position
As announced on 16 March 2015 the Company secured a GBP3m
revolving credit facility. The funds available through the facility
will be used for working capital to support the growth of the
business, and facilitate the Company in capitalising on the large
and increasing opportunities that it continues to develop across
its target markets.
As a result of this the Board does not foresee any near-term
challenges with cash balances, but will continue to closely monitor
cash requirements and maintain tight cost control.
Outlook
The Company believes that its largest opportunities are in the
three areas of Computerised Tomography ("CT"), Single Photon
Emission Computed Tomography ("SPECT") and portable advanced
radiation detectors where its proprietary technologies bring
important and differentiated performance advantages. As the Company
announced today, it has been awarded a modification to its existing
contract with the Defense Advanced Research Projects Agency
(DARPA), an agency of the U.S. Department of Defense, for the
volume supply of radiation network detectors - increasing the total
contracted revenues awarded under this programme to $4.35m to date.
This represents an approximate quadrupling of the contract value
since it commenced in August 2014, reflecting the strength of the
Company's offer and scalable nature of its projects. Additionally,
the Company is at an advanced stage of negotiation on a number of
contracts, with a combined value of over GBP2m, in its core
markets. This, combined with revenues from signed contracts where
delivery is scheduled for the next financial year, provides Kromek
with good visibility of revenues for financial year 2015/16. Such
high visibility of revenues, which is 50% higher than at the
equivalent point in 2014, gives the Board confidence in continued
strong growth year-on-year.
Appointment of Interim Chairman
The Company is also pleased to announce that Mr Lawrence Kinet
has taken on the position of Interim Chairman with immediate
effect.
Lawrence Kinet, Interim Chairman of Kromek, said: "I am
delighted to take on this role at this time of great growth for the
Company. Kromek has solid fundamentals based on the strength of its
technology as demonstrated by the success of our programme with
DARPA. As a result, with every passing half year, the Board has
increasing confidence in Kromek's future as we build ever-stronger
ties with government and commercial customers."
Enquiries
Kromek Group plc
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Arnab Basu, CEO
Derek Bulmer, CFO 01740 626 060
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Panmure Gordon (Nominated Adviser and
Broker)
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Freddy Crossley - Corporate Finance
Charles Leigh-Pemberton - Broking 0207 886 2500
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Luther Pendragon
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Harry Chathli, Claire Norbury, Alexis
Gore, Oli Hibberd 0207 618 9100
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About Kromek Group plc
Kromek Group plc is a UK technology company (global HQ in County
Durham) and a leading developer of high performance radiation
detection products based on cadmium zinc telluride ("CZT"). Using
its core CZT technology Kromek designs, develops and produces x-ray
and gamma ray imaging and radiation detection products for the
medical, security screening and nuclear markets.
The Group's products provide high resolution information on
material composition and structure and are used in multiple
applications, ranging from the identification of cancerous tissues
to hazardous materials, such as explosives, and the analysis of
radioactive materials.
Kromek uses multiple technologies in its manufacturing
processes, including the established methods of 'liquid phase'
detector production, and also 'vapour phase' production methods,
which allow the production of high quality, high performance
detectors on an industrial scale. Kromek has an intellectual
property portfolio of more than 250 pieces of IP.
The Group's business model provides a vertically integrated
technology offering to customers, from the growth of CZT crystals
to finished products or detectors, including software, electronics
and application specific integrated circuits ("ASICs").
The Board believes that the vertical integration offered by
Kromek, combined with the benefit of 25 years of research into CZT
production and the patents and trade secrets accumulated by the
Group, are unparalleled in the market place.
The Group has operations in the UK, Germany and US (California
and Pennsylvania), and is selling internationally through a
combination of distributors and direct OEM sales.
Currently, the Group has over a hundred full time employees
across its global operations.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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