Technology specialists Kromek Group is set to almost double its headcount to 190 after announcing ambitious plans to expand its North East headquarters.
The Sedgefield-based firm, which makes products for the medical, security screening and nuclear markets across the world, received Regional Growth Fund backing in 2013 which it is now investing in the North East by expanding its operation.
The undisclosed grant will see the firm, which currently employs 100 people across the group, install new furnaces needed to produce their revolutionary products – investment which will ultimately create scores of new jobs.
Chief executive officer Arnab Basu said: “Kromek received a grant via the RGF toward the back end of last year. The company is investing in the region and expanding its manufacturing operation in Sedgefield, with 24 new furnaces to create the detection materials which power all its products.
“This should lead to around 90 jobs for the region over the next five years.”
The news comes as the Durham University spin-out, listed on AIM since last October, announced its final results for the year ended April 2014 in which sales soared by 122% to £5.97m.
During the period the firm acquired subsidiary eV Products and there was negative goodwill on the deal of £2.4m. The figure was treated as a one-off exceptional profit, distorting the previous year’s pre-tax loss figure of £1.6m. As a result adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) was an improved loss of £2.5m, compared with the previous period’s loss of £3.2m.
The firm bases its products on cadmium zinc telluride (CZT), specialist technology it has harnessed to design, develop and produce X-ray and gamma ray imaging as well as radiation detection products, such as bottle scanners and baggage screening products which are installed in airports around the world and colour imaging for X-rays.
Over the course of the year the firm accrued several multi-million pound contracts from a range of commercial and government customers but some contracts were subject to delays during the firm’s financial year, meaning revenues could not be realised during the fiscal year and the £5.97m sales could have been substantially higher – a fact which disappointed directors.
The firm has, however, integrated two acquired US firms, NOVA and eV Products, substantially increasing the group’s research and development capabilities as well as its opportunities to commercialise its technology.
As a result of the acquisitions the business has secured a strong order book within all three of its chosen markets, including a contract to supply medical imaging modules to an SME manufacturer of x-ray diagnostics and analysis equipment in China.
The deal over the next seven years is worth up to £96m, subject to the customer meeting its contractual revenue targets.
Kromek also supplies products to the security screening market, including standalone liquid screening equipment, carry-on baggage screening and checked-in baggage screening.
As well as receiving orders from nine UK Airports, new orders were secured to supply scanners to Portugal, Hungary, Cyprus and Belgium.
Dr Basu added: “The appetite for Kromek’s components, systems and solutions in each of our target markets is increasing.
“The group is well placed, not only to continue to win new contracts, but also to service the growing demand for our technologies and achieve our ambition of becoming the radiation detection specialists of choice in our chosen markets.
“We have reported a number of new contracts post this period end and we are continuing to convert a strong pipeline with the current order book at an all-time high.”