Kromek Group PLC (LON:KMK) have today announced its annual report and accounts for the year ended 30 April 2019.
Chairman’s Statement
In the year ended 30 April 2019, Kromek took a number of significant steps towards its long-term growth goals. The progress of 2017/18 was sustained into the 2018/19 fiscal year as we remained at the forefront in developing solutions to combat some of the greatest security and health challenges faced by society today.
We continued to gain traction in all of our business segments with the award of high-value, multi-year contracts from our commercial and large government customers worldwide. Over the last three fiscal years, we have won more than $80m of contracts, across all of our core sectors, demonstrating the strength of our technology base, the successful conversion of our growing order pipeline and the deep and long-lasting partnerships that we are continuing to build with our customers.
This year, Kromek continued to execute on previously signed agreements, which in turn helped grow profit at the adjusted EBITDA level providing clear evidence of this progress. In addition, new customers, new contracts and repeat orders were won in all our target markets. These new awards, alongside customers increasingly moving from R&D programmes to full commercialisation as cadmium zinc telluride (“CZT”) detection technology progressively replaces legacy systems, demonstrates the scale of opportunity in front of us.
It also provides us with greater visibility over revenue for the coming years and confidence in our growth prospects. Overall, we have achieved significant milestones in commercialising our technology this year and remain confident of furthering our strategy of becoming the preferred sub-systems supplier to major OEMs through existing and new relationships.
Arnab Basu, our Chief Executive Officer, provides a detailed review of our operational achievements for the year and the progress made in our two key growth areas of single photon emission computed tomography (“SPECT”) products in medical imaging and our D3S platform in nuclear detection. The superior detail in SPECT images means this technology will improve early stage diagnosis of diseases such as cancer and Parkinson’s, ensuring better patient outcomes. This is recognised by major healthcare OEMs, which are driving market adoption.
For our D3S platform, we believe that US government agencies (DoD and DHS) continue to represent a significant radiation detection opportunity for Kromek and expect to expand our work with them. However, the threat of a “dirty” bomb is global and government agencies around the world are gearing up to guard against it. Our D3S platform is already involved in deployments across Europe and Asia, and, while the potential of the US market remains substantial, the demand for portable advanced radiation detectors for nuclear safeguarding is a significant global market opportunity.
Strengthened Global Base – New Facilities in US
Given the strategic importance of the US markets, last year we laid the foundations to support future growth there and relocated our US operations to new premises near Pittsburgh, Pennsylvania. The new purpose-built facility serves as the focus of our medical imaging business, providing world-class manufacturing of CZT-based SPECT products. The new facility is fully operational and has significantly increased capacity and efficiency of the manufacturing process.
In the last quarter of the year, we raised £21m from new and existing shareholders to strengthen the balance sheet and to enable us to capitalise on the significant growth opportunities for our flagship medical imaging products and the D3S platform. This included investing in our manufacturing facilities in the US and UK to both expand future capacity and drive efficiencies.
We continually monitor the political environment and keep under review the potential impact of Brexit. However, we are strategically well-placed to navigate whatever will be the outcome of the Brexit process because we operate from both the UK and the US, with significant manufacturing facilities in both locations, and sell to an international customer base through a combination of distributors and direct to OEMs.
Employees and Partners
As we look to the future, I would also like to express gratitude to those who have enabled us to reach this point. In particular, on behalf of the Board, I would like to thank the senior management team and all of our staff for their efforts and commitment and our shareholders for their loyal on-going support. We also give special thanks to Dr Graeme Speirs, who stepped down as a Non-executive Director during the year, for his tremendous support and guidance over the years, and we wish him all the best for the future.
Kromek has the market opportunities, the technology and the products to excel, and so, with the strengthening of our foundations and with sustained long-term growth drivers, we look forward to delivering significant shareholder value in the years to come.
