The chief executive of North East tech firm Kromek says the business is in a strong position to bounce back after taking a significant hit from the Covid-19 pandemic.
The Sedgefield based business, which designs and manufactures hi-tech pieces of equipment for the nuclear detection, medical and security markets, said solid progress was made in the early part of the year with Kromek reporting record revenue increases of 43%.
When the coronavirus pandemic struck, however, it led to major disruption in the second part of the year, leading to delays in shipments and projects getting pushed back.
As a result, the firm saw revenues fall from £14.5m to £13.1m in the year ended April 30 2020, while last year’s earnings of £2m were converted to an Ebitda loss of £400,000.
Last year’s pre-tax loss of £1.3m also widened to £5.2m and it also recorded an exceptional loss of £13.1m in respect of the impact of Covid-19.
However, despite taking a significant hit from the pandemic, CEO Arnab Basu said the group made progress during the year in the strengthening of its operations, notably through its multimillion-pound expansion at NETpark in Sedgefield, County Durham, which now employs around 80 people, up from around 60 this time last year.
And now that lockdown restrictions are lifting and business is showing signs of returning to normal trading, Dr Basu said the firm is rebounding.
He said that Kromek had cut around 25 jobs at its site in Pennsylvania, US, while also using the Job Retention Scheme in the 海角视频 to furlough a number of staff – measures which it expects to reduce running costs and cash outflow.
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The Group also secured further loans with HSBC of £1.4m and, in the US, Paycheck Protection loans of around $1m.
In the US, the firm is rehiring staff as work is returning, while in County Durham the firm has brought its furloughed staff back and now has more people working in its newly-expanded CZT production facility.
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Dr Basu said that while Covid-19 has impacted the business, the coronavirus had not hampered its market drivers, including the needs for better security and cancer detection, meaning its products are just as relevant and in demand in a post Covid-19 world.
He said: “We entered 2019/20 in a stronger position than ever before, increasing revenues by 43% in the first half.
“However, the pandemic caused markets to shut down and materially impacted both our global customer base and supply chain resulting in overall revenues for full year 2019 to be lower than the previous year.
“However, the mitigation measures and operational progress we have made during the year means we are well-positioned to rebound strongly.
“We are getting back to full scale and visibility is getting better so the outlook for the business is pretty strong.
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“Covid-19 has had a massive impact but Covid has not cured cancer or taken out terrorists. Those are the fundmental market drivers for us. We have gone through a tough period but we are coming back to normality.”
During the year the group also continued to gain traction for its next-generation SPECT products in medical imaging and its D3S family of products in nuclear detection, which are now being deployed in 22 countries around the world.
Dr Basu added: “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.”