Kromek seals one of the biggest deals in firm’s history worth £44 million

Kromek (AIM: KMK), a worldwide supplier of detection technology focusing on the medical, security screening and nuclear markets, announced that it has been awarded a new contract, by an existing OEM customer, expected to be worth a minimum of $58.1m over a seven-year period.

Under the terms of the contract, Kromek will supply Cadmium Zinc Telluride (CZT) detectors and associated advanced electronics to be used in state-of-the-art medical imaging systems. The company’s technology provides higher resolution detection capabilities enabling better patient outcomes.

Kromek will deliver the contract over a seven-year period, commencing immediately, and will begin recognising revenue from the 2019/2020 fiscal year.

Arnab Basu, CEO of Kromek, commented: “We are delighted to have been awarded this multi-year contract from an existing OEM customer, which is one of the most significant that we have secured both from a strategic and monetary perspective. It is also the first major contract that will be delivered from our new facility in the US that has been purpose built as a world-class production site for medical imaging products. Building on the $80m of contracts won over the last three fiscal years, this award strengthens and solidifies our revenue visibility and demonstrates the increasing commercial traction of our CZT detectors in our key target markets of medical imaging and nuclear detection.”

The firm has also recently announced a conditional Firm Placing and Open Offer to raise up to £21 million before expenses. The Firm Placing has been undertaken with new and existing institutional investors in the Company and was over-subscribed.

Sir Peter Williams, Chairman of Kromek, said: “Over the last three fiscal years we have won contracts totalling $138 million across all of our core sectors – reflecting the conversion of our expanding order pipeline and customers increasingly launching next-generation CZT-based products. With the growing demand for our flagship products in all our market segments, this fundraise will strengthen our ability to capitalise on these substantial opportunities. As such, the Board recommends all shareholders to vote in favour of the proposals, which will enable us to deliver increased value to our shareholders.”