First phase of £30m deal guarantees profitability for detection tech group

Detection technology business, Kromek, says it has received the first $25m/£19.8m payment under its Enablement Agreement with Siemens Medical Solutions USA, Inc. (Siemens Healthineers)

It follows news released late last month that Huddersfield-based Kromek had signed deals with Siemens Healthineers to allow for production of cadmium zinc telluride (CZT) detectors.

Under the terms of this deal, Kromek will be paid a total of $37.5m/£30.2m in cash in four instalments over a four-year period, including this first instalment of $25m/£19.8m, of which a material amount will be recognised as revenue.

As a result, the group confirms that it will become profitable in the current financial year.

It says the additional aggregate payments of $12.5m/£9.9m, payable over the next four years, provide a robust foundation for delivering significant revenue growth.

Arnab Basu, chief executive officer of Kromek, said: “We are pleased to have received the first payment under our significant multi-year agreement with Siemens Healthineers.

“These funds will be used to support the delivery of various milestones under the agreement, significantly reduce our debt and strengthen our balance sheet, ultimately enhancing our operational capabilities.

“It also enables us to become profitable in the current financial year – which is a significant milestone.”