Kromek Group (KMK) H1 2025 earnings summary

Executive summary

• Revenue increased 5% to £7.1m for H1 2024, with record full-year revenue and EBITDA positive expected for the year ending April 2024.

• Signed multi-year agreements with Siemens Healthineers post-period, including $37.5m in cash over four years and ongoing supply of CZT detector tiles, expected to deliver profitability in FY 2025.

• Gross margin improved significantly, reaching 56.9% in H1 2025 (H1 2024: 54.2%), driven by product mix, easing component costs, and operational efficiencies.

• Loss before tax reduced to £3.5m in H1 2024, but widened to £5.7m in H1 2025 due to lower revenue during OEM negotiations.

• Advanced imaging and CBRN detection segments both show robust growth and opportunity, with new government contracts and framework selections.

Financial highlights

• H1 2025 revenue was £3.7m, down from £7.1m in H1 2024, mainly due to paused customer engagements during OEM negotiations.

• Gross margin rose to 56.9% in H1 2025 (H1 2024: 54.2%).

• Operating costs reduced to £6.2m in H1 2024, supporting improved profitability.

• Cash and cash equivalents at 31 October 2024 were £0.6m (30 April 2024: £0.5m), with total borrowings increased to £12.3m.

• Adjusted EBITDA loss was £2.3m in H1 2025 (H1 2024: £0.1m loss).

Outlook and guidance

• Profitability expected in FY 2025, with profit significantly ahead of market expectations due to Siemens Healthineers agreements.

• Revenue and cash generation anticipated to increase in H2 FY 2025, with further growth and sustained profitability expected in FY 2026.

• 84% of market-expected revenue for the year already visible, with strong opportunity pipeline to fill remaining gap.

• Board remains confident in future prospects, citing strong order book and strategic positioning.