Kromek Group plc's (LON:KMK) Shift From Loss To Profit

Kromek Group plc (LON:KMK) is possibly approaching a major achievement in its business, so we would like to shine some light on the company. Kromek Group plc, together with its subsidiaries, develops, manufactures, and sells radiation detection components and devices for the advanced imaging, CBRN detection, and biological threat detection markets. The company’s loss has recently broadened since it announced a UK£3.3m loss in the full financial year, compared to the latest trailing-twelve-month loss of UK£5.9m, moving it further away from breakeven. Many investors are wondering about the rate at which Kromek Group will turn a profit, with the big question being “when will the company breakeven?” We've put together a brief outline of industry analyst expectations for the company, its year of breakeven and its implied growth rate.

This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality.

According to some industry analysts covering Kromek Group, breakeven is near. They expect the company to post a final loss in 2025, before turning a profit of UK£1.8m in 2026. Therefore, the company is expected to breakeven just over a year from now. How fast will the company have to grow each year in order to reach the breakeven point by 2026? Working backwards from analyst estimates, it turns out that they expect the company to grow 75% year-on-year, on average, which is extremely buoyant. If this rate turns out to be too aggressive, the company may become profitable much later than analysts predict.

We're not going to go through company-specific developments for Kromek Group given that this is a high-level summary, but, keep in mind that by and large a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.

Check out our latest analysis for Kromek Group

One thing we’d like to point out is that The company has managed its capital prudently, with debt making up 29% of equity. This means that it has predominantly funded its operations from equity capital, and its low debt obligation reduces the risk around investing in the loss-making company.

Next Steps:

This article is not intended to be a comprehensive analysis on Kromek Group, so if you are interested in understanding the company at a deeper level, take a look at Kromek Group's company page on Simply Wall St. We've also put together a list of relevant aspects you should further examine:

1. Valuation: What is Kromek Group worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Kromek Group is currently mispriced by the market.
2. Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Kromek Group’s board and the CEO’s background.
3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.