# Kromek Group results ahead of management’s expectations

- Link: https://www.directorstalkinterviews.com/kromek-group-results-ahead-of-managements-expectations/4121064808
- Published: 2022-05-16T07:06:40+01:00
- Author: Giles

**Kromek Group plc** ([LON:KMK](https://www.directorstalkinterviews.com/company/kromek-group-plc/kmk.l)),
a leading developer of radiation and bio-detection technology solutions for the 
advanced imaging and CBRN detection segments, has provided an update on business
and trading for the year ended 30th April 2022.

As noted in the Group’s interim results announcement in January 2022, Kromek continued
to deliver on its existing contracts as well as win new and repeat orders during
the first half of the year. In H2 2022, the commercial momentum increased, ahead
of management’s expectations, including £5.9m in new orders being won in the final
quarter, primarily in the CBRN detection segment.

The additional contract wins contributed to the Group achieving strong revenue growth
in H2 over H1 2022 and Kromek expects to report revenue of £12.1m for the year ended
30 April 2022 (FY 2021: £10.4m), an increase of approximately 16%. However, the 
Group continued to be impacted by supply chain issues as detailed in the interim
results. Specifically, the late arrival of certain components prevented the completion
of orders totalling approximately £2.9m that were scheduled to be delivered before
the year end. These orders have now begun to be shipped and the revenue is expected
to be recognised in the first half of the current financial year. As a result, the
Group expects to report an adjusted EBITDA loss for the year ended 30 April 2022
of approximately £1.2m.

The Group continued to maintain tight cost control, improve collections, and manage
cash flow. As a result, and despite the significant increase in inventories due 
to the delayed shipment of certain orders, the Group had cash and cash equivalents
at 30 April 2022 of approximately £5.1m. Kromek expects cash inflows following the
delivery and payment of the aforementioned £2.9m orders; the unwinding of high inventory
levels; and a continued improvement in customer collections. Consequently, the Board
believes that the Group has sufficient cash available for the foreseeable future.

For the current financial year, Kromek continues to expect accelerated growth in
both its segments and is forecasting substantial revenue growth in the year to 30
April 2023. The Group has excellent visibility over full year revenue forecasts 
with 50% contracted, 37% going through contract negotiation and the remaining 13%
being provided by the Group’s regular repeat order business. This is the highest
level of visibility that the Group has ever had at the start of a financial year.

The anticipated growth is based on delivery under existing long-term contracts, 
new orders won in H2 2022, and the sustained demand being received for its products.
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.

Kromek Group will provide further information at the time of its full year results
announcement in July 2022.

The company also announced the appointment of finnCap Ltd as its Nominated Adviser
and Broker with immediate effect.

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