Trading update: FY23 targets remain on course

In a Trading Update for the year to 30 April 2022 Kromek reports that it expects FY22 revenue of £12.1m. This compares to our previous FY22 forecast of £15.0m. However, for the current year, backed by strong contract visibility, our FY23 expectation of £18.0m revenues remains unchanged. As outlined at the interims, the Group continued to be impacted by supply chain issues, notably the availability of key components required to complete £2.9m of orders required by the year end. These orders are now being shipped and are set to contribute to H1 ‘23 earnings. Despite order shipment delays, strong cost control and cashflow management resulted in a year-end FY22 cash position of £5.1m; this compares to our estimate of £7.4m. As a result of the unwinding of inventory, combined with cash inflow from delayed order completion, Kromek reports sufficient cash reserves for ongoing operations. For the current financial year, Kromek reports that it expects growth to accelerate in both its core segments - CBRN and Imaging - resulting in the prospect of “substantial revenue growth”. We retain an indicative fair value of 26p / share.