True ‘category champions’ (eg Facebook, Google, etc) often create vast new markets from scratch. Stage 1 of the genesis usually entails developing unique IPR, customer awareness and strong barriers to entry. Followed closely by extensive field testing, additional product refinement and the receipt of early orders. The last involves full commercialisation, widespread adoption and ultimately becoming the industry’s ‘de facto standard’.
We think Kromek’s cutting edge ‘dirty bomb’ detector (D3S) has today reached this final phase, with governments and large corporates continuing to roll out its proprietary handheld devices in real-life conditions. Initially on relatively small-scale deployments, but soon in larger numbers and of much higher values.
Indeed we understand that the global addressable market for the D3S family and its associated derivatives, could be worth up to $750m over the next 4 years. With substantial demand expected across North America, Europe (eg UK), Asia (eg Singapore, Japan) and Australia.
Better still, the company said this morning it had just signed another 3 D3S contracts worth £1.6m in aggregate. Namely;
- £1.1m from a UK government-related company.
- $389k from the US’s Joint Program Executive Office for Chemical, Biological, Radiological and Nuclear Defense (JPEO-CBRND) for military grade applications.
- €180k from the European Commission’s Directorate-General for Migration and Home Affairs for the D3S-ID and drone-mounted D3S for wide-area monitoring.
Although these agreements have already been baked into our forecasts (& underpinned by near 80% FY20 revenue visibility), they importantly act as further endorsements of the Kromek’s technology & operational capability. Along with providing ideal reference sites for securing significant follow-on business, which we deem to be highly likely given the firm’s successful ‘land & expand’ strategy.
CEO Arnab Basu adding: “The D3S platform continues to gain traction in the US and the rest of the world. We are working with a number of high value-customers in a number of countries for deployment and implementation of this technology. These new contracts are great examples of the commercial progress in this area as well as the varied security and military applications for our D3S family of products.”