TIDMKMK
RNS Number : 7360Y
Kromek Group PLC
18 January 2022
18 January 2022
Kromek Group plc
("Kromek" or the "Group")
Interim Results
On track to deliver significant revenue growth for full year
with over 90% visibility of forecasts
Kromek (AIM: KMK), a leading developer of radiation and
bio-detection technology solutions for the advanced imaging and
CBRN detection segments, announces its interim results for the six
months ended 31 October 2021.
Financial Highlights
-- Revenue was GBP4.7m (H1 2021: GBP4.6m)
-- Gross margin was 47% (H1 2021: 54%; FY 2021: 48%)
-- Adjusted EBITDA* improved to GBP0.6m loss (H1 2021: GBP0.9m loss)
-- Loss before tax reduced to GBP3.1m (H1 2021: GBP3.4m loss)
-- Gross cash and cash equivalents at 31 October 2021 were
GBP10.2m (30 April 2021: GBP15.6m; 31 October 2020: GBP5.8m)
* Adjusted EBITDA is defined as earnings before interest,
taxation, depreciation, amortisation, exceptional items, early
settlement discounts and share-based payments. For further details,
see the Financial Review below.
Operational Highlights
-- The Group delivered on existing contracts, won new orders and
experienced greater customer engagement regarding future projects
in both of its advanced imaging and CBRN detection segments
-- Growth and, partly, margin were impacted by supply chain
related challenges for components, with certain deliveries being
delayed into the second half that are now being recovered. The
Group took steps to increase the surety of its supply, resulting in
increased inventory and working capital, and, accordingly, does not
expect revenue to be impacted by similar issues in the second
half
-- Delivery continued on the Group's existing advanced imaging
contracts and new business activity increased, significantly
strengthening the pipeline for the second half and beyond:
o Significant increase in medical imaging new business activity
as the impact of the pandemic continued to recede - strengthening
the pipeline for H2 2022 and beyond
o Ramp up in delivery under the Group's significant multi-year medical imaging contract
o Entered commercial development engagement with three new
strategic OEMs for key medical imaging applications
o Signed a seven-year supply agreement, worth up to $17m, to
provide a CZT detector solution for industrial screening
o Received a $250,000 repeat order in industrial screening from
a US-based aerospace and defence technology customer
o Entered commercial development engagement with two new security screening OEMs
-- New and repeat orders won in the CBRN detection segment along
with the Group participating in an increasing number of nuclear
security tenders and making significant progress in its
bio-security development programmes:
o Awarded a two-year contract worth up to $1.6m by a US federal
entity for the D3S-ID wearable nuclear radiation detector
o Received a GBP173,000 order for the D5 RIID high-performance
handheld radiation detector from a UK government-related
customer
o Awarded a $6m contract extension from the Defense Advanced
Research Projects Agency ("DARPA"), an agency of the US Department
of Defense, to advance the development of a mobile wide-area
bio-security system capable of detecting and identifying airborne
pathogens
o Successfully completed piloting in schools, airports and other
locations of an airborne COVID-19 detection system under a project
funded by Innovate UK and commenced productisation phase
o 15 new customers won in the civil nuclear market
-- Three new patents were filed and three were granted during the period
Dr Arnab Basu, CEO of Kromek, said: " During the first half of
the 2022 financial year, we continued to deliver on our existing
contracts as well as win new and repeat orders in both our advanced
imaging and CBRN detection segments. We also made substantial
progress with our existing development programmes and initiated new
programmes with a number of strategic partners. While our growth
and margin during the period were impacted by challenges related to
the supply chain for components, this is being recovered in the
second half and we remain on track to deliver a significant
increase in revenue for full year 2022, in line with market
expectations, with visibility of over 90% of full year forecasts.
This would represent our highest ever full year revenue with growth
in both segments.
"Looking further ahead, we have significantly strengthened our
pipeline in the multiple substantial markets in which we operate.
We offer our customers a differentiating technology that supports
early medical diagnosis to improve patient outcomes and government
vigilance to the threat of terrorism - which are long-term growth
drivers. As a result, the Board continues to look to the future
with great confidence ."
For further information, please contact:
Kromek Group plc
Arnab Basu, CEO
Paul Farquhar, CFO +44 (0)1740 626 060
Cenkos Securities plc (Nominated Adviser
and Broker)
Giles Balleny/Camilla Hume (NOMAD)
Julian Morse (Sales) +44 (0)20 7397 8900
Luther Pendragon Ltd (Financial PR)
Harry Chathli/Claire Norbury +44 (0)20 7618 9100
Analyst Presentation
Arnab Basu, CEO, and Paul Farquhar, CFO, will be hosting a
presentation for analysts and investors at 9.30am GMT today via
webcast. To register to participate, please contact
amysmart@luther.co.uk at Luther Pendragon.
About Kromek Group plc
Kromek Group plc is a leading developer of radiation detection
and bio-detection technology solutions for the advanced imaging and
CBRN detection segments. Headquartered in County Durham, UK, Kromek
has manufacturing operations in the UK and US, delivering on the
vision of enhancing the quality of life through innovative
detection technology solutions.
The advanced imaging segment comprises the medical (including CT
and SPECT), security and industrial markets. Kromek provides its
OEM customers with detector components, based on its core cadmium
zinc telluride (CZT) platform, to enable better detection of
diseases such as cancer and Alzheimer's, contamination in
industrial manufacture and explosives in aviation settings.
In CBRN detection, the Group provides nuclear radiation
detection solutions to the global homeland defence and security
market. Kromek's compact, handheld, high-performance radiation
detectors, based on advanced scintillation technology, are
primarily used to protect critical infrastructure and urban
environments from the threat of 'dirty bombs'.
The Group is also developing bio-security solutions in the CBRN
detection segment. These consist of fully automated and autonomous
systems to detect a wide range of airborne pathogens.
Kromek is listed on AIM, a market of the London Stock Exchange,
under the trading symbol 'KMK'.
Further information is available at www.kromek.com .
Operational Review
During the six months to 31 October 2021, the Group delivered on
existing contracts and development programmes, won new and repeat
orders and experienced greater customer engagement regarding future
projects in both the advanced imaging and chemical, biological,
radiological and nuclear (CBRN) detection segments of the business.
This resulted in a slight increase in revenue over the same period
of the prior year and a significantly strengthened pipeline for the
second half of the year and beyond. Whilst the Group's growth
during the first half was impeded by supply chain pressures,
particularly global electronic component shortages, which meant
certain deliveries were postponed into early in the second half,
the Group has taken steps during the period to increase the surety
of its supply and, as such, revenue in the second half of the year
is not expected to be similarly impacted. The Group also continued
to strengthen its manufacturing capabilities with the ongoing
rollout of the capacity expansion projects that it had commenced in
the prior year.
Advanced Imaging Segment
The advanced imaging segment comprises the medical imaging,
security screening and industrial screening markets. Kromek
provides its OEM customers with detector components, based on its
core cadmium zinc telluride (CZT) platform, to enable better
detection of diseases such as cancer and cardiac conditions,
contamination in industrial manufacture and explosives in aviation
settings.
In this segment, commercial engagement with customers consists
of an initial design phase followed by incorporation of the Group's
detectors and technologies into a customer's system and then the
award to the Group of a multi-year supply contract, which provides
long-term revenue visibility. Kromek has an established track
record of winning orders for development purposes that transition
to multi-year supply contracts from customers in gamma probes, bone
mineral densitometry ("BMD") and single photon emission computed
tomography ("SPECT") in medical imaging as well as in security and
industrial screening. In particular, this success is evidenced by
the significant contracts awarded in H2 2019 in medical imaging and
the period under review in industrial imaging, which are expected
to be worth approximately $58.1m and $17m respectively. As the
Group continues to win such contracts, the Group's revenue base
expands and the revenue profile becomes increasingly
predictable.
During the period, the Group continued to deliver detector
components to its customers under orders for development purposes
and multi-year supply contracts. It has also experienced greater
customer engagement regarding future projects as normal business
increasingly resumes following the temporary redirection of
resources due to the COVID-19 pandemic. Kromek remains on track to
deliver strong growth in this segment compared with the 2021
financial year.
Medical Imaging
In recent years, leading OEMs in medical imaging have been
increasingly adopting CZT detector platforms as the enabling
technology for their product roadmaps. CZT detector platforms
enable OEMs to significantly improve the quality of imaging, which
leads to earlier and more reliable diagnosis of diseases such as
cancer. Kromek's CZT detector solutions are increasingly being
commercially adopted for SPECT, molecular breast imaging ("MBI")
and BMD applications. These, along with computed tomography ("CT"),
are key target areas for future growth as they address diseases
particularly associated with an ageing population such as cancer,
Alzheimer's, Parkinson's, cardiovascular illnesses and
osteoporosis. Kromek also serves the gamma probes market in medical
imaging, which are used during surgeries for the removal of lymph
nodes.
During the period, Kromek continued to fulfil its existing
supply orders in medical imaging and progress its development
programmes. In particular, delivery continued to ramp up as planned
to the Group's significant OEM customer that, in H2 2019, awarded
the Group a contract expected to be worth a minimum of $58.1m over
an approximately seven-year period. In addition, the Group
continued delivery of a $600k order received in H2 2021 from a
different customer for the supply of detectors to be used in niche
SPECT applications. This delivery was completed by the end of the
2021 calendar year as planned and the Group expects to receive
further repeat orders under the ongoing supply relationship with
this customer.
There was a significant increase in new business activity as the
impact of the pandemic - which had caused a temporary redirection
of resources in healthcare settings - continued to recede. This
applied particularly in the Group's key target areas of CT and
SPECT, supported by the growing industry adoption of new techniques
and rollout of new systems. Kromek commenced commercial development
engagement with three new strategic OEM customers in this market.
These initial orders are for the supply of CZT-based detectors for
use by the OEM customers in their commercial development
programmes.
During the period, one of the Group's US medical imaging
customers received FDA approval for its system for a niche nuclear
medical application, which is using Kromek's detectors. The Group
has received several orders from this customer, which it expects to
continue on an ongoing basis.
Security Screening
In security screening, Kromek's technologies are used in travel,
primarily aviation, settings to enable the Group's customers to
meet the high-performance standards they require, and as demanded
by regulatory bodies, to ensure passenger safety while increasing
the convenience and efficiency of the security process. The Group
provides OEM and government customers with components and systems
for cabin and hold luggage scanning.
During the period, the Group continued to deliver under its
existing component supply agreements in the security screening
market. In its development work, Kromek completed a two-year $1.6m
project funded by the US Department of Homeland Security for a CZT
detector platform for threat resolution for hold baggage, hand
baggage and cargo screening systems. The Group expects commercial
adoption and integration of this platform in multiple commercial
advanced baggage screening products. The Group also entered two new
commercial development engagements during the period where Kromek
is customising its detector solutions for incorporation into its
OEM customers' systems.
Industrial Screening
In industrial screening , Kromek provides OEM customers with
detector components for incorporating into scanning systems used
during manufacturing processes to identify potential
contaminants.
In October 2021, the Group signed a seven-year supply agreement,
worth up to $17m, to provide CZT-based detector components for
incorporation into systems for identifying contaminants for the
purpose of product quality inspection. The contract, which was
awarded following the completion of a two-year development
programme, is expected to commence in the current financial year
and is with a US based, sector-leading industrial OEM with a global
customer base.
Also during the period, the Group was awarded a $250,000 repeat
order from a US-based customer that is a global leader in aerospace
and defence technologies. The customer's system, which incorporates
Kromek detectors, is used for in-line quality control in
manufacturing processes.
CBRN Detection Segment
In CBRN detection, the Group provides nuclear radiation
detection solutions to the global homeland defence and security
market. Kromek's compact, handheld, high-performance radiation
detectors, based on advanced scintillation technology, are
primarily used to protect critical infrastructure and urban
environments from the threat of 'dirty bombs'. Kromek's portfolio
also includes a range of high-resolution detectors and measurement
systems used for civil nuclear applications, primarily in nuclear
power plants and research establishments. In addition, t he Group
is developing bio-security solutions to detect a wide range of
airborne pathogens, including SARS-CoV-2 (COVID-19).
The Group won new and repeat orders in the nuclear security and
civil nuclear markets during the first half of the year and
participated in an increasing number of tenders reflecting the
growth in global government defence spending. The outcomes of these
tenders are expected to be known during 2022 and the Group expects
that the procurement activity in this market will remain high
throughout the year. T he Group also made significant progress with
its development programmes in bio-security and anticipates
commercial deployment of this technology in the next financial
year.
Nuclear Security
Kromek's nuclear security platforms - D3S and D5 - consist of a
family of products designed to cater for the varying demands of
homeland security and defence markets. In particular, the D3S
platform is widely deployed as a networked solution to protect
cities, buildings or critical infrastructure against the threat of
use of 'nuclear dirty bombs' by terrorists.
Kromek was awarded a contract by a US federal entity for the
Group's D3S-ID wearable nuclear radiation detector that is designed
to enable first responders, armed forces, border security and other
CBRN experts to detect radiological threats. The contract will be
delivered over two years and is worth up to $1.6m. The Group also
continued to receive repeat orders from the European Commission for
the D3S-ID portable radiation detector.
During the first half of the year, Kromek received an order
worth GBP173,000 from its UK government-related customer for the
Group's D5 RIID high-performance radiation detector designed for
challenging environments. This represents the first major order for
the D5 RIID following its launch last year. In addition, post
period, the Group received orders from two new customers for D5
detectors.
Civil Nuclear
In the civil nuclear market, Kromek won 15 new customers during
the period. The Group continued its development work under a
development and supply contract awarded in the previous financial
year, worth a minimum of $960,000, which is for a product with both
nuclear security and civil nuclear applications. The project is
progressing on schedule, with the development work being completed
by the end of calendar year 2021 and the product now in the
validation phase ahead of the commencement of supply.
Biological-Threat Detection
Kromek is developing bio-security solutions consisting of fully
automated and autonomous systems to detect a wide range of airborne
pathogens for the purposes of national security and protecting
public health. Since H2 2019, the Group has been working with the
Defense Advanced Research Projects Agency ("DARPA"), an agency of
the US Department of Defense, to develop a biological-threat
detection system that autonomously senses, analyses and identifies
airborne pathogens. The programme was established to combat
bioterrorism and is now also aimed at providing an early warning
system in the event of a virus outbreak to enable action to be
taken to localise the spread and prevent it from becoming an
epidemic or global pandemic. The Group is also working under a
programme funded by Innovate UK, which commenced in 2021, to
develop a bio-security solution to support end-use cases
specifically for COVID-19 detection.
During the period, the Group continued to deliver on the
development milestones under its programme with DARPA and received
a $6m contract for the next phase. The programme is for the
development of a completely automated wide spectrum airborne
pathogen detection system that is fully mobile and runs
autonomously. It is being designed to be networkable and provide
wide-area monitoring capability in near real-time. To date, the
Group has been awarded a total of over $13m by DARPA under this
programme.
Under its programme funded by Innovate UK to develop a solution
for airborne COVID-19 detection, the Group successfully completed
piloting of the system at a number of schools, airports and other
locations. The solution is now in the productisation phase, with a
manufacturing partner having been identified and a number of
pre-production models also having been produced. Further, the Group
also engaged in validation of the technology in third party
laboratories with very positive results on both the detection
levels, sensitivity and false alarm rates.
R&D, IP and Manufacturing
During the period, the Group continued to ramp up several
projects, which had commenced in the prior year, for the expansion
of production capacity and increased process automation. These
programmes are resulting in greater productivity and cost
efficiency in the manufacture of CZT and non-CZT products in both
the Group's UK and US facilities.
Kromek is focused on developing the next generation of products
for commercial application in its core markets. As noted, during
the period the Group continued to advance development programmes
with a number of partners and, in particular, significantly
progressed the development of its biological-threat detection
solution.
In H1 2022, Kromek applied for three new patents and had three
patents granted across three patent families, bringing the total
number of patents held by the Group to in excess of 275. The new
applications cover innovations in both of the Group's segments.
Financial Review
Revenue for the six-month period ended 31 October 2021 increased
slightly to GBP4.7m (H1 2021: GBP4.6m). The Group's growth was
impacted during the period by supply chain pressures, particularly
global electronic component shortages, which resulted in the
delivery of some contracts being delayed into the second half of
the year. As described further below, the Group took steps to
increase the surety of its supply during the period. Accordingly,
the Group does not expect revenue to be impacted by supply chain
issues in the second half and remains on track to deliver
significant growth for the full year, with visibility of over 90%
of forecast revenue.
Gross profit was GBP2.2m (H1 2021: GBP2.5m) due to gross margin
for the period being 46.8% compared with 54.5% for H1 2021 and
43.5% for H2 2021. The reduction compared with the first half of
the prior year is due to product mix and component price inflation
driven by supply chain pressures.
The Group generated other operating income of GBP1.3m (H1 2021:
GBP0.3m), which predominantly comprises forgiveness of Paycheck
Protection Programme (PPP) loans in the US. The Group had been
granted PPP loans totalling $1.8m in the prior year and, during the
period under review, applied for, and received, forgiveness for
repayment from the US Government. In the prior year period, the
GBP0.3m of other operating income comprised UK Government grants in
response to COVID-19.
Administrative expenses and distribution costs increased to
GBP6.4m (H1 2021: GBP5.9m), which is largely due to a combination
of increased depreciation and amortisation expense, staff costs,
travel and consultancy fees.
The forgiveness of PPP loans offset the decline in gross profit
and the increased administrative and distribution costs to enable a
reduction in operating loss to GBP2.9m (H1 2021: GBP3.1m loss).
The Group recognised an exceptional income of GBP0.1m relating
to the impairment reversal of a specific trade receivable that was
impaired in the full year 2020 financial statements and
subsequently classified as an exceptional item.
Loss before tax reduced to GBP3.1m (H1 2021: GBP3.4m loss).
The adjusted EBITDA loss for the period was reduced to GBP0.6m
(H1 2021: GBP0.9m loss). Adjusted EBITDA is calculated as per the
following table:
H1 2022 H1 2021 FY 2021
(Unaudited) (Unaudited) (Audited)
------------
GBP'000 GBP'000 GBP'000
------------- ------------
Loss before tax (3,056) (3,399) (6,331)
------------- ------------
EBITDA adjustments:-
------------- ------------
Net interest 276 306 546
------------- ------------
Depreciation 854 821 1,685
------------- ------------
Amortisation 1,265 1,279 2,359
------------- ------------
Share-based payments 120 120 106
------------- ------------
COVID-19 related
items
------------- ------------
Exceptional items (89) - (52)
------------- ------------
Adjusted EBITDA* (630) (873) (1,687)
------------- ------------
*Adjusted EBITDA is defined as earnings before interest,
taxation, depreciation, amortisation, exceptional items and
share-based payments. The exceptional item in H1 2022 and FY 2021
relates to the reversal of items impaired in the FY 2020 Annual
Report. Share-based payments are added back when calculating the
Group's adjusted EBITDA as this is currently an expense with a zero
direct cash impact on financial performance. Adjusted EBITDA is
considered a key metric to the users of the financial statements as
it represents a useful milestone that is reflective of the
performance of the business resulting from movements in revenue,
gross margin, and the costs of the business.
Investment in product development was GBP3.1m for the six-month
period ended 31 October 2021 (H1 2021: GBP2.7m). The expenditure in
H1 2022 was in technology and product developments, reflecting the
continuing investment and commitment in new and enhanced products,
applications and platforms that can be commercially marketed.
Amortisation of such development activity in the period was GBP1.0m
(H1 2021: GBP1.0m).
Cash and cash equivalents at 31 October 2021 were GBP10.2m (30
April 2021: GBP15.6m; 31 October 2020: GBP5.8m). The decrease over
the six-month period primarily reflects i nvestment in product
development and other intangibles, with capitalised development
costs of GBP3.1m and IP additions of GBP0.1m, and a GBP1.7m
reduction in working capital.
Inventories increased by GBP1.1m in the period from GBP6.2m to
GBP7.3m. This increase was primarily in order to secure surety of
critical electronic components for both H2 2022 and, in certain
instances, H1 2023, in response to the supply chain pressures
experienced during the first half. As such, the Group sourced
component inventory when available, rather than in accordance with
normal supply lead times. As noted above, there was significant
component price inflation caused by the constrained market supply,
which also contributed to the increased spend on inventories.
Outlook
Kromek entered the second half of FY 2022 in a stronger position
than when it started the year and, the Board believes, than at any
point in the Group's history. The Group has continued to deliver on
its existing contracts as well as increase its contracted orderbook
and pipeline. The Group has made significant progress under
development programmes that are in areas that the Board believes
will be key drivers of future growth, in particular, SPECT, CT and
bio-security. In addition, due to the mitigating actions and
significant forward planning that Kromek implemented during the
first half of the year, and which remain in place, the Group does
not expect revenue to be impacted by supply chain challenges in the
second half of the year.
The Group currently has visibility in excess of 90% of expected
full year revenue based on orders already delivered and won and
this is further supported by a strong and increasing pipeline. As a
result, Kromek is on track to deliver an increase in revenue of
approximately 45% for full year 2022, in line with market
expectations, which would represent the Group's highest ever full
year revenue and reflect growth in both the advanced imaging and
CBRN detection segments.
Looking further ahead, Kromek is operating in multiple
substantial markets where its technology enables its advanced
imaging customers to differentiate their products - forming an
important part of the roadmap of major OEMs - and its CBRN
detection customers to enhance national defence. The demand for
technology that enables early medical diagnosis to improve patient
outcomes and government vigilance to the threat of terrorism will
continue. In addition, Kromek's strategic position in the advanced
imaging segment has been significantly strengthened this year with
the Group becoming the only commercial independent global supplier
of CZT. As a result, the Board continues to look to the future with
great confidence.
Consolidated condensed income statement
For the six months ended 31 October 2021
Six months Six months Year
ended 31 ended 31 ended
October October 30 April
2021 2020 2021
GBP'000 GBP'000 GBP'000
(Unaudited) (Unaudited) (Audited)
Note
Continuing operations
Revenue 4 4,707 4,576 10,352
Cost of sales (2,503) (2,083) (5,346)
Gross profit 2,204 2,493 5,006
Other operating income 5 1,343 300 379
Distribution costs (273) (128) (287)
Administrative expenses (including
operating expenses) (6,143) (5,758) (10,935)
Operating loss (2,869) (3,093) (5,837)
Exceptional impairment reversal
on trade receivables and amounts
recoverable on contract 6 89 - 52
Operating results (post exceptional
items) (2,780) (3,093) (5,785)
----------- ----------- ---------
Finance income 6 1 2
Finance costs (282) (307) (548)
Loss before tax (3,056) (3,399) (6,331)
Tax 7 707 385 978
Loss from continuing operations (2,349) (3,014) (5,353)
Losses per share
-basic (p) 9 (0.5) (0.9) (1.5)
- diluted (p) (0.5) (0.9) (1.5)
Consolidated condensed statement of comprehensive income
For the six months ended 31 October 2021
Six months
ended Year
Six months
ended 31
October 31 October ended
30 April
2021 2020 2021
GBP'000 GBP'000 GBP'000
(Unaudited) (Unaudited) (Audited)
Loss for the period (2,349) (3,014) (5,353)
------------- ------------- -----------
Items that may be recycled to the
income statement
Exchange gains/(losses) on translation
of foreign operations 1,154 (640) (1,981)
------------- ------------- -----------
Total comprehensive loss for the
period (1,195) (3,654) (7,334)
============= ============= ===========
Consolidated condensed statement of financial position
31 October 31 October 30 April
2021 2020 2021
GBP'000 GBP'000 GBP'000
Note (Unaudited) (Unaudited) (Audited)
Non-current assets
Goodwill 1,275 1,275 1,275
Other intangible assets 26,240 23,048 24,144
Property, plant and equipment 10 10,884 12,052 11,200
Right-of-use asset 3,884 3,597 4,076
42,283 39,972 40,695
Current assets
Inventories 7,336 6,579 6,202
Trade and other receivables 7,166 6,282 6,644
Current tax assets 422 1,415 1,015
Cash and bank balances 10,243 5,810 15,602
25,167 20,086 29,463
----------- ----------- ---------
Total assets 67,450 60,058 70,158
=========== =========== =========
Current liabilities
Trade and other payables (5,959) (5,966) (6,174)
Lease obligation (389) (328) (399)
Borrowings (4,813) (3,654) (5,387)
Provisions for liabilities - - -
(11,161) (9,948) (11,960)
Net current assets 14,006 10,138 17,503
Non-current liabilities
Deferred income (1,221) (1,068) (1,071)
Lease obligation (4,111) (3,575) (4,256)
Borrowings (1,977) (3,928) (2,816)
Total liabilities (18,470) (18,519) (20,103)
Net assets 48,980 41,539 50,055
As at 31 October 2021
Equity
Share capital 12 4,319 3,449 4,319
Share premium account 72,943 61,603 72,943
Merger reserve 21,853 21,853 21,853
Translation reserve 1,154 1,341 -
Accumulated losses (51,289) (46,707) (49,060)
Total equity 48,980 41,539 50,055
Consolidated condensed statement of changes in equity
For the six months ended 31 October 2021
Equity attributable to equity holders of the
Group
Share
Share Premium Merger Translation Accumulated
Capital Account Reserve Reserve Losses Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Balance at 1 May 2021 4,319 72,943 21,853 - (49,060) 50,055
Loss for the period - - - - (2,349) (2,394)
Other comprehensive
income for the period - - - 1,154 - 1,154
Total comprehensive
loss for the period - - - 1,154 (2,349) (1,195)
Transactions with
shareholders
recorded in equity
Issue of share capital - - - - - -
net of expenses
Premium on shares issued
less expenses - - - - - -
Credit to equity for
equity-settled
share-based
payments - - - - 120 120
Balance at 31 October
2021 4,319 72,943 21,853 1,154 (51,289) 48,980
Balance at 1 May 2020 3,446 61,600 21,853 1,981 (43,813) 45,067
Loss for the period - - - - (3,014) (3,014)
Other comprehensive
loss for the period - - - (640) - (640)
Total comprehensive
loss for the period - - - (640) (3,014) (3,654)
Transactions with
shareholders
recorded in equity
Issue of share capital
net of expenses 3 - - - - 3
Premium on shares issued
less expenses - 3 - - - 3
Credit to equity for
equity-settled
share-based
payments - - - - 120 120
Balance at 31 October
2020 3,449 61,603 21,853 1,341 (46,707) 41,539
Balance at 1 May 2020 3,446 61,600 21,853 1,981 (43,813) 45,067
Loss for the year - - - - (5,353) (5,353)
Other comprehensive
loss for the year - - - (1,981) - (1,981)
Total comprehensive
loss for the year - - - (1,981) (5,353) (7,334)
Transactions with
shareholders
recorded in equity
Issue of share capital
net of expenses 873 - - - - 873
Premium on shares issued
less expenses - 11,343 - - - 11,343
Credit to equity for
equity-settled
share-based
payments - - - - 106 106
Balance at 30 April
2021 4,319 72,943 21,853 - (49,060) 50,055
Consolidated condensed statement of cash flows
For the six months ended 31 October 2021
Six months Six months Year
ended 31 ended 31 ended 30
October October April
2021 2020 2021
Note GBP'000 GBP'000 GBP'000
(Unaudited) (Unaudited) (Audited)
Net cash used in operating activities 11 (2,213) (1,890) (1,309)
Investing activities
Interest received 6 1 2
Purchases of property, plant and
equipment (260) (295) (454)
Purchases of patents and trademarks (96) (114) (156)
Capitalisation of research and
development costs (3,125) (2,667) (5,463)
Net cash used in investing activities (3,475) (3,075) (6,071)
Financing activities
New borrowings 560 2,283 3,215
Net proceeds on issue of shares - 3 12,216
Interest paid (162) (189) (309)
Payment of loan and borrowings (704) (307) (595)
Finance lease repayments (322) (272) (395)
Net cash (used in) / generated
from financing activities (628) 1,518 14,132
Net (decrease) / increase in cash
and cash equivalents (6,316) (3,447) 6,752
Cash and cash equivalents at beginning
of period 15,602 9,444 9,444
Effect of foreign exchange rate
changes 957 (187) (594)
Cash and cash equivalents at end
of period 10,243 5,810 15,602
=========== =========== =========
Notes to the unaudited interim statements
For the six months ended 31 October 2021
1. Basis of preparation
This interim financial report does not constitute statutory
accounts as defined in section 434 of the Companies Act 2006. The
auditors reported on the Kromek Group plc financial statements for
the year ended 30 April 2021, their report was unqualified and did
not contain a statement under section 498(2) or (3) of the
Companies Act 2006. The Group's consolidated annual financial
statements for the year ended 30 April 2021 have been filed with
the Registrar of Companies and are available on the Group's
website: www.kromek.com .
2. Going concern
The Directors have a reasonable expectation that the going
concern basis of accounting remains appropriate and that the Group
has adequate resources and facilities to continue in operation for
the next 12 months based on its cash flow forecasts prepared.
Accordingly, the Group's unaudited interim statements for the six
months ended 31 October 2021 have been prepared on a going concern
basis which contemplates the realisation of assets and the
settlement of liabilities and commitments in the normal course of
operations.
3. Interim report
This interim financial report will be available from the Group's
website at www.kromek.com .
4. Business and geographical segments
Products and services from which reportable segments derive
their revenues
For management purposes, the Group is organised into two
business units (UK and USA) and it is on these operating segments
that the Group is providing disclosure.
The chief operating decision maker is the Board of Directors who
assess performance of the segments using the following key
performance indicators; revenue, gross profit, operating profit and
EBITDA. The amounts provided to the Board with respect to assets
and liabilities are measured in a way consistent with the Financial
Statements.
The turnover, profit on ordinary activities and net assets of
the Group are attributable to one business segment, i.e. the
development of digital colour x-ray imaging enabling direct
materials identification, as well as developing a number of
detection products in the industrial market. Whilst results are not
measured by end market, the Group currently categorises its
customers as belonging to the advanced imaging and CBRN detection
markets.
Analysis by geographical area
A geographical analysis of the Group's revenue by destination is
as follows:
Six months Six months Year
ended 31 ended 31 ended
October October 30 April
2021 2020 2021
GBP'000 GBP'000 GBP'000
(Unaudited) (Unaudited) (Audited)
United Kingdom 928 683 1,627
North America 1,916 3,055 5,693
Asia 125 197 610
Europe 1,695 630 2,387
Australasia 43 11 3
Africa - - 32
Total revenue 4,707 4,576 10,352
4. Business and geographical segments (continued)
A geographical analysis of the Group's revenue by origin is as
follows:
Six months ended 31 October 2021
UK Operations USA Operations Total for
GBP'000 GBP'000 Group
GBP'000
Revenue from sales
Revenue by segment:
-Sale of goods and services 3,487 3,813 7,300
-Revenue from grants 409 - 409
-Revenue from contract customers 374 142 516
Total sales by segment 4,270 3,955 8,225
Removal of inter-segment sales (2,459) (1,059) (3,518)
-------------- --------------- ----------
Total external sales 1,811 2,896 4,707
============== =============== ==========
Segment result - operating loss (2,382) (398) (2,780)
Net interest (162) (114) (276)
Loss before tax (2,544) (512) (3,056)
Tax credit 707 - 707
-------------- --------------- ----------
Loss for the period (1,837) (512) (2,349)
============== =============== ==========
Other information
Property, plant and equipment additions 65 195 260
Depreciation of property, plant
and equipment 506 348 854
Intangible asset additions 2,627 594 3,221
Amortisation of intangible assets 751 514 1,265
-------------- --------------- ----------
Balance Sheet
Total assets 41,942 25,508 67,450
-------------- --------------- ----------
Total liabilities (11,911) (6,559) (18,470)
-------------- --------------- ----------
Inter-segment sales are charged at prevailing market prices.
No impairment losses were recognised in respect of property,
plant and equipment and goodwill.
4. Business and geographical segments (continued)
Six months ended 31 October 2020
Total for
UK Operations USA Operations Group
GBP'000 GBP'000 GBP'000
Revenue from sales
Revenue by segment:
-Sale of goods and services 2,255 1,615 3,870
-Revenue from grants 8 - 8
-Revenue from contract customers 2,266 320 2,586
Total sales by segment 4,529 1,935 6,464
Removal of inter-segment sales (1,317) (571) (1,888)
-------------- --------------- ----------
Total external sales 3,212 1,364 4,576
============== =============== ==========
Segment result - operating loss (537) (2,556) (3,093)
Net interest (179) (127) (306)
Loss before tax (716) (2,683) (3,399)
Tax credit 385 - 385
-------------- --------------- ----------
Loss for the period (331) (2,683) (3,014)
============== =============== ==========
Other information
Property, plant and equipment additions 229 66 295
Depreciation of property, plant
and equipment 483 338 821
Intangible asset additions 2,172 609 2,781
Amortisation of intangible assets 777 502 1,279
-------------- --------------- ----------
Balance Sheet
Total assets 35,203 24,855 60,058
-------------- --------------- ----------
Total liabilities (11,887) (6,632) (18,519)
-------------- --------------- ----------
The accounting policies of the reportable segments are the same
as the Group's accounting policies. Segment profit or loss
represents the profit or loss earned by each segment without
allocation of the share of profits or losses of associates, central
administration costs including Directors' salaries, investment
revenue and finance costs, and income tax expense. This is the
measure reported to the Group's Chief Executive for the purpose of
resource allocation and assessment of segment performance.
5. Other Operating Income
In the period to 31 October 2021, other operating income
comprised the forgiveness of PPP loans granted by the US Government
and grants received from the Coronavirus Job Retention Scheme
provided by the UK Government in response to COVID-19's economic
impact on businesses. In the prior year period, the GBP0.3m of
other operating income comprised UK Government grants in response
to COVID-19.
6. Exceptional Items
The Group has reversed GBP89k in relation to an item impaired in
the full year 2020 financial statements.
7. Tax
The Group has recognised R&D tax credits of GBP707k for the
six months ended 31 October 2021 (six months ended 31 October 2020:
GBP385k).
8. Dividends
The Directors do not recommend the payment of a dividend (six
months ended 31 October 2020: GBPnil).
9. Losses per share
The calculation of the basic and diluted loss per share is based
on the following data:
Losses
Six months Six months Year
ended 31 ended 31 ended
October October 30 April
2021 2020 2021
GBP'000 GBP'000 GBP'000
(Unaudited) (Unaudited) (Audited)
Losses for the purposes of basic loss
per share being net loss attributable
to owners of the Group (2,349) (3,014) (5,353)
Six months Six months Year
ended 31 ended 31 ended
October October 30 April
2021 2020 2021
'000 '000 '000
(Unaudited) (Unaudited) (Audited)
Number of shares
Weighted average number of ordinary
shares for the purposes of basic loss
per share 431,852 344,751 358,912
Effect of dilutive potential ordinary
shares:
Share options and warrants 618 340 373
Weighted average number of ordinary
shares for the purposes of diluted loss
per share 432,470 345,745 359,285
Basic (p) (0.5) (0.9) (1.5)
Diluted (p) (0.5) (0.9) (1.5)
Due to the Group having losses in each of the periods, the fully
diluted loss per share for disclosure purposes, as shown in the
income statement, is the same as for the basic loss per share.
10. Property, plant and equipment
During the six months ended 31 October 2021, the Group acquired
property, plant and equipment with a cost of GBP260k (six months
ended 31 October 2020: GBP295k).
11. Notes to the cash flow statement
Six months Six months Year
ended 31 ended 31 ended
October October 30 April
2021 2020 2021
GBP'000 GBP'000 GBP'000
(Unaudited) (Unaudited) (Audited)
Loss for the period (2,349) (3,014) (5,353)
Adjustments for:
Finance income (6) (1) (2)
Finance costs 282 307 548
Income tax credit (707) (385) (978)
Depreciation of property, plant and
equipment 854 821 1,685
Amortisation of intangible assets 1,265 1,279 2,359
Share-based payment expense 120 120 106
PPP loan forgiveness (1,253) - -
Impairment of intangible asset - - 30
Loss on disposal - - 82
Operating cash flows before movements
in working capital (1,794) (873) (1,523)
(Increase) / decrease in inventories (1,134) (163) 214
(Increase) / decrease in receivables (524) 1,928 1,566
(Decrease) in payables (61) (2,782) (2,571)
Cash used in operations (3,513) (1,890) (2,314)
Income taxes received 1,300 - 1,005
Net cash used in operating activities (2,213) (1,890) (1,309)
12. Share capital
During the period, no ordinary shares (six months ended 31
October 2020: 250,000) were issued to satisfy the exercise of
employee share options.
13. Events after the balance sheet date
There are no significant or disclosable post-balance sheet
events.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
IR BKOBPFBKDPDD
(END) Dow Jones Newswires
January 18, 2022 02:00 ET (07:00 GMT)
Kromek (LSE:KMK)
Graphique Historique de l'Action
De Mar 2024 à Avr 2024
Kromek (LSE:KMK)
Graphique Historique de l'Action
De Avr 2023 à Avr 2024
