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Business & Economy

Kromek reports a difficult financial year as COVID hits key markets and supply chain

Sedgefield-based technology firm Kromek Group has detailed the significant effects of the coronavirus pandemic on its revenues through the publication of its full-year results.

The company reported a pre-tax loss of £5.2 million, up from £1.3 million in 2018/19.

Gross revenues were down to £13.1 million from £14.5 million in the previous year, equating to an EBITDA-adjusted earnings loss of £400,000.

It was a year of two halves though, with the company having made a record start in the first six months as revenues increased by 43 per cent.

In the second half of the financial year however, COVID-19 caused key markets to shut down, materially impacting both the company’s global customer base and its supply chain.

Overall, 2019/20 saw Kromek significantly expand its CZT manufacturing capacity and D3S production, with sales of the latter being made in 22 different countries.

The company also commenced delivery on a $58.1 million contract to provide an OEM customer with CZT detectors.

Kromek boss Dr Arnab Basu said that despite the pandemic continuing to cause problems in the first months of the new financial year, the operation progress and mitigation measures being put in place meant the company was well-positioned to rebound strongly.

He said: “We have significantly expanded our production capacity and increased sales of our popular D3S platform that is being deployed in 22 countries, including new contracts with the US Government and European Commission.

“We have also deepened our relationship with DARPA to build a bio-surveillance system for detecting airborne pathogens.

“In medical, we expect product cycles to continue to refresh as early and better diagnostics is increasingly recognised as critical to more effectively managing diseases like cancer and cardiac conditions.

“These are substantial addressable markets underpinned by fundamental long-term growth drivers.

“I am immensely proud of the resilience and attitude of our staff as we have all adapted to new ways of working.

“It is greatly encouraging that we are now starting to see a return to normal business patterns, and this is feeding through into increased activity from our customers around the world.

“As a result, the board is cautiously optimistic for the year ahead and will provide updates to the market as the outlook becomes clearer moving forward.”