North East technology company Kromek has announced a £30m deal with a global health corporation which it says will be “transformational” for its fortunes.
The County Durham firm has for a number of years been a high profile leader for the region’s technology sector, being named as one of the Ƶ’s most innovative firms and attracting a visit from then Prince Charles in 2022. But it has struggled to turn its technology into a profit, announcing another loss today in interim results for the six months ended 31 October 2024.
But Kromek has also announced a deal with Siemens Medical Solutions to provide knowledge, intellectual property and equipment that will bring in $37.5m (£30.1m), including $25m (£20.1m) in the current year. The deal will make Kromek profitable in 2025, it said.
Kromek, which was spun out of research at Durham University, is the largest employer at the NETPark science park in Sedgefield. It makes radiation and bio-detection equipment and has made headlines for the use of its products at high profile diplomatic events, as well as on the battlefield in Ukraine.
Its deal with Siemens Healthineers will see it supply CZT-based detector tiles and transfer 15 of its 174 furnaces to Siemens. The deal has been agreed on a non-exclusive basis and will allow Kromek to continue to make deals with other manufacturers.
Kromek said the deal meant “the group expects to report revenue growth for the current financial year and profit significantly ahead of market expectations, with a much strengthened balance sheet".
Chief executive officer Arnab Basu said: “We are delighted to have entered into these agreements with Siemens Healthineers, a move that underscores Kromek’s position as the largest independent producer of CZT and CZT-based detectors.
"We both have an ongoing commitment to innovation that is critical for developing superior detector solutions that play a vital role in the early detection of serious illnesses. Both Siemens Healthineers and Kromek are aligned in our vision to enhance healthcare through technological advancements, and we eagerly anticipate collaborating to bring this vision to fruition.
“The initial $25m payment will be used to support the delivery of various milestones under the agreements, significantly reduce our debt and strengthen our balance sheet, ultimately enhancing our operational capabilities. These significant agreements enable Kromek to report FY 2025 profit ahead of market expectations and lay the groundwork for further growth in revenues and sustainable profitability beyond that period. These agreements also enable Kromek to continue its leadership in CZT production for SPECT and CT markets, as we maintain the flexibility to explore further collaborations with other OEMs in advanced imaging.”
The deal has been announced alongside interim six-month results in which revenue fell from £7.1m in the first half of the year to £3.7m. That resulted in the company’s loss before tax increasing from £3.5m in the first half of the year to £5.7m. The results period contained a £2m contract with the Ministry of Defence and progress on a breast cancer detection project funded by Innovate Ƶ.
Dr Basu said: “Looking beyond FY 2025, we expect to deliver growth in revenues for the fifth year in a row in FY 2026 and remain profitable as we continue to deliver on our agreement with Siemens Healthineers and our other OEM customers as well as the CBRN contracts won with governmental agencies in Ƶ and abroad. Consequently, the board looks to the future with confidence. “
