Directors at innovative technology firm Kromek Group said they were disappointed not to reach forecasted sales levels in the year to April 2014, despite recording a 122% lift on the previous financial year.
The Durham University spin-out, which floated on AIM for the first time last October, has harnessed specialist technology to design, develop and produce X-ray and gamma ray imaging and radiation detection products which are used in the medical, security screening and nuclear markets across the world.
During the course of the year the Sedgefield-headquartered business secured a raft of multi-million pound orders from both commercial and government customers.
But a number of big contracts could not be “booked and shipped” in time to be recorded within this fiscal year, including leading to the firm falling short of budget predictions. The business recorded sales of £5.97m, a significant lift on the £2.69m posted last year, but its pre-tax losses widened from £1.6m to £4.3m.
Chairman Richard Morgan said: “2013-14 was a very challenging year for Kromek but one in which important transformational changes were achieved.
“Unfortunately, it became clear to the board that some of the contracts which had been expected, most of which have subsequently been confirmed, were not going to be booked and shipped in time for the revenue to be recognised in the fiscal year to the end of April.
“This included a promising alliance with an emerging Chinese company to develop novel components for the medical imaging market in China.
“While we have met the subsequently lowered sales forecast, which shows a significant growth from the previous year, we are disappointed with the shortfall and have taken steps to ensure that our forecasting is much improved in the future.”
The firm said it had made good progress within all three major sectors and the £5.97m sales represented growth across all of the trading entities of the group, with the UK showing growth of 18% and the US growing nearly 228%.
Heavy investments were also made into the development of product, with £3.1m being spent on research and development – more than double the previous period’s £1.4m – with £1.9m spent in the UK and £1.2m in the US.
The firm’s two acquired US businesses, eV Products and NOVA, have now been fully integrated and several products have been developed by the firms in the financial year.
The investment in R&D has led to ﬁve new medical products and eight new nuclear products being developed and a total of 28 patents were ﬁled or awarded.
Arnab Basu, the firm’s chief executive, said: “The level of sales, despite being below original estimates, indicates accelerating traction and growing adoption of the products and technology offerings that the group provides across our target markets.
“The group has invested in expanding its sales and marketing team and has recruited both senior and ﬁeld sales personnel.
“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.
“With our additions to the board during the period, our investment in expanded sales and marketing personnel and our successful admission to AIM, we believe the prospects for the group are very exciting and we are confident that we can continue to harvest the value contained in our unique technology platforms.”