Once they receive the initial $25m the debt will be all gone.
The company will make a profit for the first time in it's history for the current year ending April 2025 , EBITDA of £12.3m and adjusted pre-tax profit of £4.9m. |
You will only get more desperate as the price begins to RISE from this level.
Best to cut your losses and close your SHORT , instead of worrying and getting sleepless nights !!!
The price will be above 10p again by the time issue tha next trading update in May or even earlier.
The initial $25m will be paid to the company very soon , so best to close your SHORT before then. |
 Z1CO,
"You can post all you but the fact remains the company is undervalued going by this latest deal.They have only transferred just 15 furnaces to Siemens for $37.5m and still have a further 159 furnaces."
On what basis? It's easy enough to throw out a wild claim but you need to back it up with actual investment figures!
At 6.4p (£41.1m market cap - 641.5m shares in issues):
1. KMK trades at 4.2 x tangible net assets of just £9.9m!
2. KMK trades at 40 x 2027 forward earnings (as per the house broker)
3. It's on a dividend yield of 0% (Kromek has never paid a dividend as it's made a loss every since it was listed)
There's not a single metric that suggests KMK is "cheap", rather it's ridiculously expensive and a stinker of a loss-maker.
The siemens deal represents a last ditch desperate deal to save it from insolvency, otherwise:
* With first half losses of £5.7m, achieved on trivial revenues of a mere £3.7m
* and with net debt of £11.7m at 31 Oct that has since increased materially beyond that
Kromek would have needed a huge placing to save it and to be able to continue to pay the rewards for failure that the current directors enjoy.
Open your eyes, smell the coffee and engage that brain. It's a dog!
JakNife |
You can post all you want but the fact remains the company is undervalued going by this latest deal.They have only transferred just 15 furnaces to Siemens for $37.5m and still have a further 159 furnaces.
Unless you close your SHORT and cut your losses it will only get worse over the coming weeks.
Very soon they will issue an rns saying that the company has received the initial $25m
Share price will only RISE higher over the coming weeks/months. |
^^ apologies the sarcasm may not be 100% crystal clear in the above chart! |
pilkers,
"With the siemens contract now in place valued only slightly below the current market cap this now derisks kmk as a takeover target."
What a load of complete nonsense.
Have you read the background in the posts above?
Kromek did a $58m deal with Siemens back in January 2019:
1. They weren't a takeover target then and weren't taken over in any of the following six years.
2. In 2020, the year immediately after the big deal, Kromek reported its largest net loss out of all of the losses that it's reported in the last six years
Year Loss2019 £0.62020 £16.52021 £5.42022 £4.92023 £6.12024 £3.3
Kromek has reported a loss *EVERY* year that it's been listed which means it reported losses in *EVERY* year following the last deal with Siemens.
3. Get your hands on the Cavendish forecasts. Cavendish are the house broker and yes, they do forecast a profit for the current fiscal year. But can you see what happens in the years after?
Year PBT (forecast) EPS (p)2025 £4.9 0.772026 £2.1 0.342027 £1.0 0.16
Cavendish forecast that a profit is made from the initial sale but that profit then materially tails off. I would bet money that Cavendish have thrown a bit of optimism into their 2026 and 2027 numbers and that actually those years will return to form and be loss-making ones.
Summary
The Siemens deal is described as a "four-year" deal and the house broker, Cavendish, has adjusted its forecasts to predict TOTAL profits (from *ALL* business inc Siemens) over the next three years of £8m, of which a big chunk of those profits are one-off in 2025 and 2026.
Looking at the closing share price of 6.4p, and Cavendish's 2027 EPS forecast of 0.16p, KMK is trading on a forward EPS of 40x!!!!! It's not cheap by a long long way.
Retail punters have got far too excited about Kromek and its deal with Siemens. The reality is that its main importance to Kromek is that it has saved it from insolvency. Without this deal Kromek was running out of cash fast and would have needed a rescue placing.
As it is, Cavendish forecast closing net cash for Kromek of just £1.8m as at April 2025. It's not a big number and it probably won't be long before KMK is back in debt once again!
Now you know why so many have been selling heavily into the recent share price excitement!
JakNife |
This deal has given some potential valuation for the company
The transfer of 15 of its existing 174 furnaces for CZT production to Siemens Healthineers has been valued at $37.5m ( £30m ).
The company still has 159 furnaces.
Taking in to account of other assets including:
Medical Imaging
Security & Industrial Screening
Nuclear Security
Civil Nuclear
Biological-Threat Detection
A realistic take out valuation of the company is in excess of £300m , over 50p |
With the siemens contract now in place valued only slightly below the current market cap this now derisks kmk as a takeover target. |
The key next step now are the potential nuclear detection contracts from a potential share of the 84 million pound pot. We know that 2025 is now a guaranteed profit. If they can convert one of more deals from the framework 2026 will also be smashed out the park. To me they come across as quietly confident on getting some of these contracts as they are in a very small pool of approved providers. Also there is the takeover possibility. Rival Redlen was acquired for 290 million dollars by Canon (yes you read that right) back in 2021. A report by equity development in 2023 valued kmk at 26p a share based on the Redlen deal. https://www.equitydevelopment.co.uk/hubfs/Research/Kromek/Kromek%20Group%20%20%20%20%20%2019%20April%202023.pdf |
SMALL CAP MOVERS: Kromek eyes profitability after £30m Siemens Healthineers deal
By JOSH LAMB OF PROACTIVE INVESTORS FOR THIS IS MONEY
UPDATED: 11:28, 31 January 2025
Kromek Group left investors cheering this week as it unmasked a road to profitability via a deal with Siemens Healthineers.
Shares in the radiation and bio-detection specialist rocketed almost 38 per cent, fuelled by Thursday's news of the $37.5million (£30.2million) cash deal with the German medical technology giant.
Equipment to produce cadmium zinc telluride detector tiles, used for medical imaging, would be transferred to Siemens, alongside training and related services.
Payments would be made in return over the coming four years, including $25million initially, covering a string of agreements.
'These significant agreements enable us to deliver profitability in 2025, significantly ahead of market expectations,' chief executive Arnab Basu flagged.
He added they laid 'the groundwork for further growth in revenues and sustainable profitability beyond that' and left scope to 'significantly' reduce debt.
Kromek would also remain the largest independent maker of such detector tiles, despite Siemens taking 15 of its 174 production furnaces, the company said.
Transformational: Kromek Group shares rocketed after the firm agreed a £30.2million cash deal with the German medical technology giant Siemens Healthineers |
Outlook for the foreseeable future is very bullish:
As Kromek stated at the time of the full year results in October last year, it was actively engaged with OEMs to drive delivery of products and monetisation of the valuable intellectual property the Group has developed in the advanced imaging area. The Group was confident that these initiatives would benefit it and drive a significant increase in both revenue and cash generation in the second half of FY 2025. Today's announcement is an exciting moment as both Siemens Healthineers and Kromek are aligned in their vision to enhance healthcare through technological advancements.
The initial $25.0m payment from Siemens Healthineers will enable the Group to report significant revenue growth for the current financial year, profit significantly ahead of market expectations and positive cash flow.
Looking further ahead, the Siemens Healthineers agreements, progress with other customer contracts in advanced imaging as well as delivery of products and services with the contracts won in CBRN detection last year with the UK Government and other government agencies lay the groundwork for further growth in revenues and sustainable profitability. The Group expects to deliver further revenue growth in FY 2026 and remain profitable. As a result, the Board is confident in the Group's future prospects. |
This is a transformational deal for the company:
1) The Group will be paid a total of $37.5m in cash in four installments over a four-year period, with the first installment of $25.0m to be received in the current financial year, a material amount of which will be recognised as revenue.
2) This multi-year agreement is projected to significantly contribute to revenue, complementing the $37.5m to be received under the enablement agreement for the advanced imaging division, throughout the agreement period.
3) 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.
4) The Group also expects to achieve further revenue growth beyond FY 2025 while delivering sustainable profits.
5) And very importantly there will be no more placings.
6) Cavendish called it a “step-change in both the breadth of agreements that it is capable of securing, and in terms of its future financial profile and revenue-generating capacity.”
The broker forecasts £24.1 million revenue for the full year, adjusted EBITDA of £12.3 million and adjusted pre-tax profit of £4.9 million. |
It is worrying times for shorters like JakNife. Kept his position that just a bit too long, got greedy, and got caught badly. With the share price set for a steady rise as the financials improve, things will only get worse for him. Now desperately trying every trick in the book to talk down a company on the way up. Close your position and move on to another target. You can only repeat the same poison so much. Give up, the games up |
Reabank,
Siemens is an existing customer, they've been involved with KMK for ages. There was much speculation that this contract, for example, was Siemens:
And given the CEO's previous involvement it always made sense. It would also make sense that that deal is getting to the end of its terms and needs to be replaced by a new one.
Notice how that deal was announced with a fan-fare "expected to be worth a minimum of $58.1m over a seven-year period"? Management are always quick to announce contract wins but:
A. Those contracts have NEVER been profitable (KMK has been loss-making since it first listed in Oct 2013), and
B. Management are quick to announce contract wins but NEVER announce the contract losses.
Total revenue over the last 5.5 years has been £76m (c. $95m). Assuming uniformity of the original contract then Siemens have been 50% of KMK's business for those 5.5 years. If Siemens are basically buying everything that they need to replace KMK and make CZT detectors themselves then the business that's left is half the size of what it was.
KMK has been hopelessly loss-making ever since it listed, so a "50% of KMK" business is going to be even more hopelessly loss-making!
JakNife |
 Hello Jaknife. I'm currently not invested in Kromek but certainly closer to investing after yesterday's announcement. In terms of what I don't understand about your statement I'd say your point 4 where you get to an adjusted loss after cash R&D of £7.9m. But isn't that ignoring the fact that the £5.7m loss for the period already includes £2.3m of amortised R&D costs paid for in prior years and spread forward. I think you can either quote the £5.7m loss or a £2.7m cash outflow before new borrowing but don't think you can hop between the P&L and cash flow statement. But you are right both P&L and cash flow for first half were terrible.
Also didn't follow your point 6 "The IP sale is a last ditch sell out of everything so that Siemens can run the same business as Kromek." In the accounts Kromek repeatedly say that although IP is transferred to Siemens it's on a non - exclusive basis and of the 174 "furnaces for CZT production" 15 are going to Siemens. To me that seems to mean Kromek will have free use of the IP plus 159 furnaces (whatever they are) for the CZT business? And if I was making a bull case for Kromek I'd say the Siemens deal implies a market value of $2m for 1 furnace? Not that I understand the science involved. |
Will that Siemens deal be matched or bettered by Phillips ?Can't forget the military contracts too with gov framework making them preferred supplier KMK |
It's going forward what drives the share price.
Latest forecast:
Cavendish called it a “step-change in both the breadth of agreements that it is capable of securing, and in terms of its future financial profile and revenue-generating capacity.”
The broker forecasts £24.1 million revenue for the full year, adjusted EBITDA of £12.3 million and adjusted pre-tax profit of £4.9 million. |
Simon Thompson of IC tipped these back in October 2023 , will be interesting to know what he makes of this transformational deal. |
I'm unsure what peoples disagree with, let me number the points individually so that it's easier to isolate the disagreement.
1. In H1, Kromek's revenues were trivial - just £3.7m
see the P&L statement from from the interims:
2. Revenue was *down* 48.2% compared to the same period last year
Again, straight from the interim statement, revenues were £7,095k in H1 2023 whereas they are a mere £3,676k in H2 2024 - 48.2% lower.
3. Total losses were £5.7m.
See the number -£5,692k next to "Loss from continuing operations" in the P&L statement
4. And a further £2.2m of costs were hidden in the cash flow statements. So the real losses were £7.9m!
See -£2,177k in the cash flow statement against "Capitalisation of research and development costs"
5. The IP sale is a last ditch sell out of everything so that Siemens can run the same business as Kromek but do it professionally and competently - the two qualities that Kromek completely lack!
6. Going forward Kromek is dead.
Please highlight which statement precisely that you don't understand.
JakNife |
Jaknife , also known as JakAss does get more wrong than right.
With KMK after this transformational deal , he will smell his own fat burning.
Two large buys just gone through
377,155 @ 6.625p and 374,330 @ 6.675p
Have added more this morning |
A JakNife by definition is short. Ignore the poison on his rusty, worn out blade. |
As are we all |
"Kromek in simple terms, they are the only global commercial producer of “cadmium zinc telluride”, with this they’ve cornered 2 markets:"
But nobody wants it!
In H1 revenues were trivial - just £3.7m
That was *down* 48.2% compared to the same period last year
Total losses were £5.7m, and a further £2.2m of costs were hidden in the cash flow statements. So the real losses were £7.9m!
The IP sale is a last ditch sell out of everything so that Siemens can run the same business as Kromek but do it professionally and competently - the two qualities that Kromek completely lack!
Going forward Kromek is dead.
JakNife |
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