Est H2’21 sales (£5.4m) jump 17% vs H1’21 (£4.6m)

After a quiet H1 due to the pandemic, Kromek is now enjoying a powerful rebound for its next generation, radiation detectors from existing & new medical (eg BMD, SPECT), nuclear (D3S) & security screening (Airport baggage/bottles) customers.

Indeed today it reported that FY’21 results would be “in line with expectations”, with the Board equally being “excited” about the near-term prospects for its ground-breaking, biological threat detector . These mobile or static devices continuously test for airborne pathogens including Covid19, and are currently being piloted at an airport and another UK public location.

At the moment most airports, border-crossings, city centres and hospitals are nowhere near back to pre-coronavirus levels with regards to passenger traffic, footfall and elective procedures. But if this improves (hopefully sometime in the summer), it could trigger much higher demand, as overseas travel and leisure pursuits return, on top of the urgent need to clear huge patient waiting lists (4.7m in the UK alone).

Looking further out, the group should be self-funding from FY23 onwards. Albeit if the airborne pathogen opportunity really takes off, then extra working capital may be required. This leads us to upgrade our valuation from 24p to 26p/share, based on the above strong industry tailwinds.