Rarely has Britain ever invented such world-beating technology as that developed by Kromek. Indeed its next generation radiation detectors are disrupting 3 major verticals - Medical Imaging (eg BMD & SPECT), Nuclear Detection (D3S) and Security Screening (Airport baggage/bottles) – each worth >$100m pa.
Over the past 3 years, the firm has won nearly £100m worth of orders, built two state-of-art manufacturing facilities in Durham (UK) & Pittsburgh (US), and is selling its proprietary products to numerous blue chip OEMs globally. Not only reducing client concentration and creating high margin revenue streams for literally years ahead, but also providing heavyweight endorsements that can be used to secure lucrative follow-on work.
In fact, we think Kromek’s D3S has already become the de facto industry standard for portable ‘dirty bomb’ detection, with governments (eg US DoD) continuing to roll out these revolutionary handheld devices in real-life conditions. Initially on relatively small deployments, but soon in bigger quantities and of much higher value. The product is presently deployed in 22 countries across North America, Europe and Asia.
Here H1’20 turnover (see below) jumped 44.7% LFL to £5.33m (vs £3.69m LY), driving a 0.8% increase in gross margin to 58.0% (vs FY19), with adjusted EBITDA (pre SBPs) steady at -£611k (vs -£553k LY). Additionally momentum has accelerated since the period close, with H2’19 EBITDA on track to hit £3.3m (vs £2.5m) on sales of £13.2m (£10.m LY)…and thus achieve our FY20 expectations