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LONDON (Alliance News) - Kromek Group PLC saw its share rise Wednesday after it said it narrowed its first-half loss and grew revenue, while also announcing that it has been awarded a contract extension with the US Defense Advanced Research Projects Agency worth up to USD1.1 million.
Kromek is a radiation-detection company focused on the medical, security and nuclear markets.
The upbeat earnings report and news of the contract extension sent Kromek shares 6.9% higher Wednesday morning to 39.00 pence.
Kromek reported a pretax loss of GBP2.3 million for the six months to end-October, smaller than the GBP2.5 million loss it reported in the first half of last year, driven primarily by a 33% increase in revenue to GBP3.2 million, up from GBP2.4 million. Its gross margin improved to 70%, from 61%.
"We are pleased to report another half year of growth against the comparative period as a result of sustained progress in Kromek's product portfolio approach...This has been achieved both by establishing new partnerships and strengthening our existing relationships," said Chief Executive Arnab Basu in a statement.
The company also announced that it has no debt and expects to be earnings before interest, taxes, depreciation and amortisation positive for the second half of the current financial year.
In a separate statement, Kromek said it has been awarded an extension to its nuclear detection contract with the US Defense Advanced Research Projects Agency. DARPA is an agency of the US Department of Defense, responsible for technology for the US military and for the development of radiation network detectors.
Kromek said the contract extension is worth up to USD1.1 million over 16 months, and includes the supply of additional Kromek detector systems.
"Looking ahead, investment in enhancing our sales and marketing function is resulting in increased interest in Kromek's products and technology...We continue to be subject to fluctuations in the timing of certain contracts and revenue recognition as well as the impact of seasonality, with the procurement cycle of many customers resulting in sales being weighted to the second half of the current financial year," said Basu.
"Despite this, the company remains confident that it can deliver in excess of 100% revenue growth from the first half to second half of the current financial year," Basu added.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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