Sees 37% H2 revenue growth, positive EBITDA
Kromek is pioneering digital colour imaging for x- and gamma rays, using cadmium zinc telluride crystals. Key markets include: medical imaging, security screening, homeland security and nuclear detection. They have reported that due to contract re-scheduling (thought to include deferred shipments of bottle-scanners and CZT medical detectors), turnover for the year ending April 2015 should be £8.1m, or £1.1m lower than our estimate. However, the forecast of £8.1m will be a record for the group, up +35.6% on FY14 - with H2 revenues to come in 37% higher YoY at £4.9m (vs £3.6m) and 53% sequentially on H1 (£3.2m). Furthermore, building up sales is yielding results: $1.1m of new orders were signed in February, along with today's landmark $2.0m contract extension for the volume supply of portable radiation detectors to DARPA, an agency of the US Department of Defense. Progress is also being made in medical imaging (CT scans, SPECT), nuclear detection and security screening - all contributing towards a healthy pipeline and solid revenue cover for FY16. Better still with regards to profitability, Kromek will be EBITDA positive in H2. Kromek is definitely heading in the right direction - expanding strongly, winning new business with blue chip customers and moving firmly into the black. We plan to publish FY16 estimates at the prelims, but for the time being prudently maintain our price target of 45p/share.Kromek Group is a developer of radiation detectors based on cadmium zinc telluride, providing detection and characterization capabilities within the medical imaging, nuclear detection and security screening markets. Co. designs, develops and produces x-ray and gamma-ray imaging and radiation detection products.
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