Market minnows: Kromek to break-even for the first time since its float

A biological attack may feel like something that only happens in sci-fi films but trying telling that to anyone living in Salisbury.

The town was exposed to the deadly nerve agent Novichok, which was allegedly used by two Russian nationals Alexander Petrov and Ruslan Boshirov in an attempt to kill former spy Sergei Skripal and daughter Yulia.

In total, 48 people were assessed in hospital in relation to the incident and 500 members of the public were told to decontaminate their possessions to prevent possible long-term exposure.

Could the attack have been prevented and the nerve agent detected in advance? Perhaps AIM-listed Kromek’s equipment could have. The firm was spun out of Durham University and listed in 2013, selling equipment which can detect nuclear radiation. Since floating, it has won plenty of work with the US Department of Defense and last week it was awarded a £1.6 million contract to develop a vehicle capable of quickly identifying the pathogens used in any biological attack.

Previously Kromek made 10,000 pocket-sized radiation detectors, costing $1000 each for the US police force. Chief executive Arnab Basu says Kromek’s pocket detectors could become a routine part of police and army surveillance around the world, helping to identify nuclear threats.

The medical sector also uses Kromek. Its probes can evaluate whether cancer is spreading and highlight conditions ranging from osteoporosis to heart disease.

Kromek is working with top medical suppliers to make its products available in hospitals.

Though the firm’s tech is impressive, a major criticism is that orders tend to be lumpy in nature, and therefore difficult to forecast.

Nevertheless, the firm is on course to break even this year, which analysts believe will be a pivotal moment for the company’s share price.

Robin Byde, analyst at Cantor Fitzgerald, says: “The group is well capitalised and extensive R&D is now being converted into strong sales with blue-chip customers.

“Kromek is on track to achieve break-even this financial year, the first time since [it floated] in 2013. We forecast strong growth thereafter reflecting a well-invested manufacturing platform, a healthy contract pipeline and high operational gearing.”