Kromek stays on track after a strong first half as revenue surges and profitability returns

Kromek Group plc (AIM: KMK) has delivered a notably stronger first half and says it remains on track to meet full-year expectations. The radiation and bio-detection specialist reported sharply higher revenue, improved margins, and a swing into profit for the six months ended 31 October 2025, supported by growing demand across its two core areas: Advanced Imaging and CBRN Detection (chemical, biological, radiological and nuclear detection).

In plain terms, the company is showing that its strategy is working: a healthier order book, stronger customer engagement, and a clearer pathway to sustained growth. Management expects the momentum built in the first half to continue into the second half, keeping the business aligned with market expectations for the year.

What this news is really about

This update matters for two big reasons. First, it signals a return to financial strength after a period when many technology and specialist manufacturing businesses were dealing with uneven government procurement cycles, cautious customer spending, and tough market conditions. Second, it highlights that Kromek’s mix of products and partnerships—especially in medical imaging—can deliver strong revenue, better profitability, and improved investor confidence when execution is tight.

According to Kromek’s interim results announcement dated 20 January 2026, the company posted:

• Revenue of £15.0m (up from £3.7m in the prior-year first half)
• Gross margin of 71.7% (up from 56.9%)
• Adjusted EBITDA of £6.0m (versus an adjusted EBITDA loss of £2.3m)
• Profit before tax of £3.1m (versus a loss of £5.7m)

That mix—higher revenue, higher margin, and a swing to profitability—typically tells investors that a company is not just selling more, but also selling better (higher-value products, improved pricing, improved cost control, or a stronger business mix).

Financial performance: the headline numbers and what they imply

Revenue growth: from “good” to “eye-catching”

Kromek’s first-half revenue jumped to £15.0m, compared with £3.7m a year earlier. That kind of increase is rarely explained by a single factor, but in Kromek’s case there is a clear driver: major delivery activity under landmark agreements connected to Siemens Healthineers, alongside underlying growth in both divisions.

Breaking it down:

• Advanced Imaging revenue: £10.8m in the half year.
• Advanced Imaging (excluding Siemens contribution): £2.5m, which management says represents a 41% underlying increase versus the prior comparable period.
• CBRN Detection revenue: £4.3m, more than double the £2.0m reported previously for the same period.

The key detail for readers is that even after stripping out Siemens-related contribution, the business still shows meaningful expansion—an important signal that growth isn’t purely “one-off” or dependent on a single customer.

Margin improvement: why gross margin matters

Gross margin improved to 71.7% from 56.9%. Gross margin is a strong indicator of product strength and the quality of revenue. When gross margin rises sharply, it can point to:

• More revenue coming from higher-value products or contracts
• Improved manufacturing efficiency and throughput
• Better pricing and stronger customer demand
• A favorable mix shift toward software, IP, or premium components

For a technology-led manufacturer like Kromek, strong margin performance can also indicate that its engineering edge and IP portfolio are translating into commercial value, not just technical novelty.

Profitability: the swing to profit changes the story

Kromek reported profit before tax of £3.1m for the half year—compared with a loss of £5.7m in the previous first half. It also reported adjusted EBITDA of £6.0m. EBITDA is often used by investors to gauge underlying operational performance, especially in growth companies that may have non-cash charges or one-time items.

In practical terms, profitability gives management more strategic options. When a company is consistently generating profit and cash, it can:

• Invest more confidently in R&D and new product development
• Expand manufacturing capacity and automation
• Pursue partnerships or selective acquisitions
• Build stronger resilience against procurement delays and market cycles

Cash and funding: staying equipped for growth

At 31 October 2025, Kromek reported cash and cash equivalents of £1.2m. It also secured a £6.0m revolving credit facility (with £1.0m drawn at that date), plus a £0.5m asset finance facility. While cash levels alone can look modest, the addition of credit capacity can provide flexibility—especially when a business is scaling production, funding working capital, or supporting long customer delivery cycles.

For investors, the bigger question is not just “how much cash is there today?” but “does the company have enough liquidity to deliver contracts, build inventory when needed, and keep investing in growth?” The facilities described are intended to support that.

Advanced Imaging: medical technology growth powered by CZT

Kromek’s Advanced Imaging division focuses on radiation detection technology used in medical imaging. A central theme in the company’s story is its work with cadmium zinc telluride (CZT) detectors, which are used in high-performance imaging systems such as SPECT (single photon emission computed tomography) and emerging areas like photon-counting CT.

Siemens Healthineers enablement agreements and SPECT detectors

Kromek has been delivering under landmark agreements signed in the prior financial year with Siemens Medical Solutions USA, Inc. (Siemens Healthineers) to enable production of CZT detectors for SPECT applications. In the first half of FY 2026, these deliveries played a major role in the revenue uplift in Advanced Imaging.

From a business standpoint, strategic agreements like these can do more than deliver revenue. They can also:

• Validate Kromek’s technology at a global, Tier 1 level
• Support longer-term demand visibility
• Strengthen Kromek’s reputation with other OEM customers
• Encourage further adoption of CZT-based systems across the market

Underlying growth beyond Siemens: why it’s important

Management highlighted that Advanced Imaging revenue excluding the Siemens contribution was £2.5m, representing a 41% underlying increase compared with the prior year’s first half. That suggests Kromek is not only executing on a major partnership, but also expanding its broader customer base and securing ongoing work under collaboration contracts and component supply agreements. The company has referenced Tier 1 OEM customers including Analogic Corporation and Spectrum Dynamics.

For investors and industry watchers, underlying growth is often the “proof” that a company’s market position is strengthening, rather than relying on a single exceptional contract.

Photon-counting CT: a fast-moving market with high potential

Kromek also reported progress in its photon-counting computed tomography (PCCT) detector development and said the commercialisation programme remains on track amid accelerating industry-wide adoption of CZT technology. Photon-counting CT is widely viewed as an important step forward in imaging because it can provide richer information from X-ray signals, potentially supporting clearer images and more detailed diagnostics.

This is a meaningful strategic point. If the industry shifts more strongly toward photon-counting CT, companies with deep detector expertise and manufacturing capability—like Kromek aims to be—could benefit from expanding demand over multiple years, not just one product cycle.

Ultra-low dose molecular breast imaging: progress and validation

Kromek also noted strong results achieved in validation trials with a leading medical clinic headquartered in the US for technology developed under an ultra-low dose molecular breast imaging programme funded by Innovate UK. While these programmes can take time to commercialise, they show the company is pushing beyond incremental improvements and into solutions that aim to deliver real-world medical value: better detection with lower dose, which is a major theme in modern imaging innovation.

If these trials translate into commercial opportunities, they could add another long-term growth driver alongside SPECT and photon-counting CT.

CBRN Detection: rising demand in national security and safety

Kromek’s CBRN Detection division focuses on technologies used to detect radiation and other threats for governments and security-related customers. In the interim results, Kromek reported CBRN Detection revenue of £4.3m, more than double the previous first-half figure of £2.0m. Management attributed growth to execution on its strategy to secure key government customers, expand its distributor network, and benefit from a recovering market environment.

Framework wins and orders: the UK Radiological Nuclear Detection Framework

One of the most concrete developments was an initial order worth £1.7m under the UK Government’s Radiological Nuclear Detection Framework for Kromek’s nuclear security products. Framework placement can be strategically valuable because it can simplify future procurement and help create a pipeline for additional orders over time.

Biological threat detection: R&D contracts that strengthen capability

Kromek also announced a contract worth £250k with the Defence Science and Technology Laboratory (Dstl) of the UK Ministry of Defence to develop novel methods of enhancing detection of biological agents and incidents. While this is not a “huge revenue” contract on its own, it signals that Kromek is working on next-generation capabilities and maintaining relevance in evolving threat landscapes.

Global order footprint: not just one geography

The company reported receiving new orders globally, including from the UK, Europe, the US, Japan, Canada and Australasia. That matters because diversified demand can reduce dependence on any single national budget cycle. It also suggests Kromek’s distributor network and product positioning are gaining traction in multiple regions.

Manufacturing and IP: scaling up and protecting the edge

In technology manufacturing, it’s not enough to have smart ideas—you need repeatable production, tight quality control, and defensible IP. Kromek said it continued to execute programmes for expansion of production capacity and process automation, improving manufacturing productivity and cost efficiency.

On the IP front, the company stated it applied for three new patents and had three further patents granted in the period, taking total patents held to in excess of 190. A strong IP portfolio can:

• Protect unique detector designs and production processes
• Strengthen negotiating power in partnerships
• Create barriers to entry for competitors
• Support premium pricing in specialist markets

Management tone: confident, but focused on execution

CEO Dr Arnab Basu described a strong first-half performance with growth across both divisions. He highlighted that CBRN segment sales more than doubled, reflecting increased global focus on national security and rising adoption of Kromek’s technologies.

In Advanced Imaging, he noted that underlying business revenue increased, helped by renewed customer engagement following completion of the Siemens Healthineers deal. He also said customers are preparing for launches of next-generation scanners—an important statement because it suggests Kromek is positioned within future product cycles, not only current deliveries.

Looking ahead, management expects the first-half momentum to continue into the second half, supported by a strong order book and customer engagement. The key message: Kromek remains on track to deliver a full-year performance in line with market expectations.

Why investors are paying attention to this update

When a company like Kromek reports a strong first half and says it is on track for the year, markets often react because it reduces uncertainty. Investors typically focus on a few themes:

1) Visibility: is the order book strong enough?

Management’s reference to “robust customer engagement” and a “good order book” implies improved visibility into second-half performance. In contract-led businesses, visibility is a major driver of investor confidence.

2) Quality of earnings: is profitability sustainable?

Profitability supported by better margins and diversified demand tends to be viewed as more durable. Investors will watch whether margins remain strong as volumes grow and whether the product mix stays favorable.

3) Customer concentration: what happens beyond Siemens?

The Siemens relationship is a major strength, but markets also want to see continued expansion of underlying revenue beyond that partnership. Kromek’s stated underlying growth in Advanced Imaging helps here, but investors will likely keep tracking it closely.

4) Long-term tech drivers: CZT, SPECT, and photon-counting CT

Medical imaging cycles can be long, but when adoption accelerates, it can create multi-year tailwinds. Progress in photon-counting CT and validation results in breast imaging signal potential future catalysts.

5) Government procurement cycles: can CBRN demand stay strong?

CBRN procurement can be lumpy due to elections, budget timing, and strategic shifts. Kromek’s expanding geographic footprint and framework wins may help smooth volatility, but investors will still watch procurement conditions.

Risks and watch-outs (balanced view)

Even with strong momentum, it’s smart to keep a grounded view. Potential risks include:

• Timing risk: contract deliveries can shift between periods, impacting half-year results.
• Customer concentration risk: large partners boost revenue but can also create dependency if terms change.
• Procurement risk: government budgets and frameworks can move slowly or change priorities.
• Execution risk: scaling manufacturing and automation must maintain quality and yield.
• Technology transition risk: emerging imaging markets (like photon-counting CT) require sustained R&D and customer adoption.

That said, Kromek’s strong interim performance suggests management is currently navigating these challenges effectively.

What to watch next: the practical checklist

If you’re following Kromek closely, here are the next signals that could matter:

1. Second-half delivery cadence in Advanced Imaging under major agreements.
2. Underlying growth rate in Advanced Imaging excluding major partner contributions.
3. New framework orders and international traction in CBRN Detection.
4. Margin stability as production scales.
5. Updates on photon-counting CT commercialisation and customer programmes.
6. Any additional validation or commercial steps related to ultra-low dose breast imaging technology.

Learn more (source link)

For the company’s official interim results announcement, you can view the update here:Kromek announces Interim Results (official release)

FAQs

1) What period do Kromek’s interim results cover?

The interim results cover the six months ended 31 October 2025, published on 20 January 2026.

2) How much revenue did Kromek report for the first half?

Kromek reported first-half revenue of £15.0m, up from £3.7m in the prior-year first half.

3) Did Kromek make a profit in the first half?

Yes. The company reported profit before tax of £3.1m, compared with a loss before tax of £5.7m in the prior comparable period.

4) What is driving growth in Advanced Imaging?

Growth was driven by deliveries under agreements linked to Siemens Healthineers to enable production of CZT detectors for SPECT applications, plus underlying growth in the broader Advanced Imaging customer base.

5) What is CBRN Detection and why does it matter?

CBRN stands for chemical, biological, radiological and nuclear detection. It matters because governments and security customers rely on these tools to detect threats and protect public safety, and demand can rise as national security priorities increase.

6) What does “on track for the year” mean in this context?

It means Kromek’s board believes the company’s performance is aligned with market expectations for the full financial year, supported by strong first-half results, a healthy order book, and continued customer engagement.

7) What should investors watch in the second half?

Investors often watch for continued delivery momentum, margin stability, additional orders (especially under government frameworks), and progress in long-term imaging programmes like photon-counting CT.

Conclusion: a strong first-half, a clearer runway

Kromek’s latest performance update paints a picture of a company gaining traction at the right time. With revenue up sharply, margins improving, and profitability returning, management’s statement that it remains on track for the year carries more weight than a routine confidence message. Advanced Imaging is benefiting from high-profile commercial progress in CZT-based systems, while CBRN Detection is showing renewed strength through frameworks, contracts, and global customer demand.

If the second half sustains the momentum—especially in underlying revenue growth and order flow—Kromek could strengthen its position as a specialist technology provider operating at the intersection of medical innovation and security needs.

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