Amphion Innovations,25 Feb 2017 01:27
What’s more,
What’s more, Amphion Innovations, who have gradually been reducing their position, announced on 1st February that this had fallen below 3% to 4.14m shares. Meaning that going forward, we suspect there is a decent chance the stock can now find a floor, reflecting Kromek’s exciting prospects and ‘fortress-like’ balance sheet.
In fact the latter was the main reason behind the £21m fund raise (net £19.9m). You see, despite winning orders worth $35.5m over past 18 months (Book-to-Bill of 2.3x), a few customers were still nervous about awarding strategically important deals to the firm, because of its ‘perceived’ lack of financial ballast to produce commercial quantities of product, provide ongoing aftermarket support and backstop (if necessary) any associated T&Cs.
Chairman Sir Peter Williams adding the "lack of balance sheet strength had, at times, weakened the Group's position when negotiating contracts…and delayed or prevented [us] from entering into significant supply deals with potential new and existing customers.”
We think this substantial equity raise eliminates any lingering doubts about future cash resources. £17m of the funds has been ear-marked solely for this purpose, with the rest available for working capital, capex (eg for SPECT) and IPR investment
Better still, the capital injection can act as a catalyst for the company to land a number of significant orders over the next few months/quarters. The majority of which probably being in its core verticals (see below) of Medical Imaging (eg SPECT, BDM and CT), Nuclear Detection (of ‘dirty bombs’) and Security Screening (bottle scanners, baggage screening etc). Indeed, today Kromek have announced their first long term contract in Security Screening (5 years, for a minimum of $3.1m) with an existing OEM client in the USA, encouragingly moving from the R&D stage to commercial.
Download full note who have gradually been reducing their position, announced on 1st February that this had fallen below 3% to 4.14m shares. Meaning that going forward, we suspect there is a decent chance the stock can now find a floor, reflecting Kromek’s exciting prospects and ‘fortress-like’ balance sheet.
In fact the latter was the main reason behind the £21m fund raise (net £19.9m). You see, despite winning orders worth $35.5m over past 18 months (Book-to-Bill of 2.3x), a few customers were still nervous about awarding strategically important deals to the firm, because of its ‘perceived’ lack of financial ballast to produce commercial quantities of product, provide ongoing aftermarket support and backstop (if necessary) any associated T&Cs.
Chairman Sir Peter Williams adding the "lack of balance sheet strength had, at times, weakened the Group's position when negotiating contracts…and delayed or prevented [us] from entering i
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