County Durham based Kromek on track with 90-job employment boost plans

County Durham based Kromek expects to be EBITDA positive in the second half of the financial year, after making significant contract wins in the first half.

Chief executive of Kromek, Arnab Basu
Chief executive of Kromek, Arnab Basu

Technology company Kromek, which yesterday reported a 33% boost in half-year revenues, says it remains on track to create 90 new jobs throughout the next five years, thanks to improvements to its manufacturing processes.

The jobs boost has been in the pipeline for around two years - since the County Durham-based firm received a £1m investment through the Regional Growth Fund - and will be aided by increasingly refined working practices that have allowed it to double its production capacity.

Chief executive Arnab Basu told The Journal: “In 2013, we acquired EV Products in Pittsburgh, which had its own process for manufacturing cadmium zinc telluride (CZT), the crystals that we use. We have now replicated that process in the UK, doubling our capacity as a group.

“That means more manufacturing jobs and also allows us to serve more customers.”

A Durham University spin-out established in 2003, Kromek, which produces x-ray and gamma ray imaging and radiation detection products, currently employs around 115 people across three sites, including it headquarters at NETPark, Sedgefield.

Mr Basu’s comments come after the announcement of strong interim results for the six months ended October 31.

During the period, revenue increased to £3.2m, compared to £2.4m in the same period last year, driven by higher nuclear and security products sales and US Government contracts, supplemented by contracts with OEMs in medical imaging and the sale of the company’s bottle scanners, now used in more than 40 airports throughout 10 different countries.

EBITDA likewise improved, going from a £2m loss to a £1.6m loss, while the loss before tax was £2.3m, down from £2.5m last year.

Throughout the period, 10 new patents were granted and 18 new patent applications were filled. A further nine patents have also been granted since then and more large-scale contracts have been secured across Kromek’s target sectors.

Yesterday, the company also announced a 16-month extension to an existing project involving the development of radiation network detectors for the US Defence Advanced Research Projects Agency (DARPA).

The body is an agency of the US Department of Defense and is responsible for maintaining the technological superiority fo the US military.

Mr Basu said Kromek being selected for the work, expected to be worth up to $1.1m (£720,00), provided validation of the firm’s technical capabilities. He also spoke positively about current momentum at the business.

“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 whilst advancing our strategy of becoming the preferred component supplier to major OEMs in CT [computed tomography] and SPECT [single-photon emission computerized tomography] and in the supply of network sensors in nuclear markets,” he said.

“This has been achieved both by establishing new partnerships and strengthening our existing relationships.”

Looking ahead, he added, investment in sales and marketing was generating interest in the firm from a growing number of companies and organisations.

“We continue to be subject to fluctuations in the timing of certain contracts and revenue recognition as a well as the impact of seasonality, with the procurement style of many customers resulting in sales being weighted to the second half of the current financial year,” he added.

“Despite this, the company remains confident that it can deliver in excess of 100% revenue growth from the first half to the second half of the current financial year. Additionally, the company expects to be EBITDA positive for the second half of this year.”

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