Kromek Group (KMK) H1 2025 earnings summary

Executive summary

• Achieved record revenue for the year ending April 30, 2024, with EBITDA positive performance and significant gross margin improvement, driven by both advanced imaging and CBRN segments.

• Signed multi-year agreements with Siemens Healthineers post-period, expected to deliver profitability in FY 2025 and significantly strengthen the balance sheet.

• Siemens deal includes $37.5m in cash over four years, with $25m in the current year, and ongoing supply of CZT detector tiles.

• Focused on cost control, profitability, and operational efficiency, resulting in a substantial reduction in loss before tax and near break-even EBITDA.

• Continued progress in advanced imaging, CBRN detection, and biological-threat detection, with new government contracts and framework selections.

Financial highlights

• Revenue increased 5% year-over-year to £7.1 million for FY 2024, but H1 2025 revenue was £3.7m, down from £7.1m in H1 2024, mainly due to paused customer engagements during OEM negotiations.

• Gross margin improved to 56.9% in H1 2025 (H1 2024: 54.2%; FY 2024: 54%), aided by product mix and cost efficiencies.

• Loss before tax widened to £5.7m in H1 2025 (H1 2024: £3.5m loss); adjusted EBITDA loss was £2.3m (H1 2024: £0.1m loss).

• Operating costs reduced by £1.8 million to £6.2 million in FY 2024, with further reductions expected.

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

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; further revenue growth and sustained profitability expected in FY 2026.

• Revenue visibility stands at 84% of the £21 million market-expected revenue for the year, with advanced imaging segment having only a 5% gap to target.

• Anticipate further contract wins in both advanced imaging and CBRN, with a robust opportunity funnel and ongoing tenders worth £100 million.

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