viewKromek Group PLC

Kromek medical division lands two new contracts worth US$1mln

One of the orders will be fulfilled over the next 18 months, the other over the current financial year

The company produces x-ray and gamma photon imaging and radiation detection products for the medical, security screening and nuclear markets

Kromek Group PLC (LON:KMK) shares surged 13% after it said its medical division has won two contracts worth a combined US$1mln.

The radiation detection technology specialist said an equipment manufacturing customer has placed a US$700,000 order for Kromek’s cadmium zinc telluride (CZT) detectors to be used in nuclear medicine.

WATCH: Kromek boss hails latest deals 

In the bone mineral densitometry market, the firm said it had received a repeat contract of US$340,000 for CZT-based detectors.

“Our CZT technology in medical scanners delivers excellent quality images and detection capability that lead to a better patient outcome,” said chief executive Dr Arnab Basu.

“We also build strong and long-lasting partnerships with our clients, as highlighted by today's repeat contract with another OEM (manufacturer) in the bone mineral densitometry sector to supply CZT-based detection units for their equipment."

READ: Kromek inks two new contracts with US government

Headquartered in County Durham, Kromek designs, develops and produces x-ray and gamma-ray imaging and radiation detection products for the medical, security screening, homeland security and civil nuclear markets.

Cancer to TNT 

Its products provide high-resolution information on material composition and structure.

Practically, the technology can be used to identify anything from cancerous tissue through to hazardous materials such as explosives and radioactive matter.

Kromek provides customers with radiation detector materials used for devices as well as finished products such as detectors.

As well as operations in the UK, it has bases in California and Pennsylvania in the US.

It sells directly to equipment manufacturers and via distributors.

Monday’s was one of a number of new contracts wins for the business, which included two new deals with the US government to supply radiation detection equipment.

Sales look set to rise strongly

Small-cap broker Hybridan said of today’s news: “This further re-enforces the run rate of this product group with all revenue from this contract to be recorded in the current financial year.”

It expects the sales for the 12 months ended April next year to be £15.05mln, up from £11.8mln, though it's set to remain loss-making.

At 2.45pm, the shares were changing hands for 28.36p, up 3.86p, valuing the business at £77mln.

Quick facts: Kromek Group PLC

Price: 24.25 GBX

Market: AIM
Market Cap: £83.57 m

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