Kromek delivered a sound, well-managed, H1 performance given industry-wide supply chain and components difficulties and inflationary costs, whilst preserving a healthy cash balance. It reported increased activity in the key medical imaging segment, with three new strategic OEMs, plus the receipt of multi-million-dollar contracts in the CBRN (chemical, biological, radiological, nuclear) segment.
The six months to 31 October 2021 saw: revenue of £4.71m +2.9%YoY, with gross margin at 46.8% (FY21: 48.4%), adjusted EBITDA loss of £0.63m (H1 21: loss £0.87m), PBT loss (rptd.) reduced from £3.4m to £3.1m, and period-end cash was £10.2m. The net cash position remained positive at £3.5m (FY21: £7.4m).
Kromek is now in a strong position to meet additional medium-term demand for its imaging equipment solutions, and is confident of market estimates of 45%YoY FY22 revenue growth; we estimate £15.0m for the full year.
We retain our 26p fair value per share but note that the Redlen acquisition by Canon leaves Kromek as the only commercial independent source of CZT-based technology for imaging systems. The read-across from that deal points to an entirely different valuation, in the range of 65p-75p per share.
Hear note summary:
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