Nanoco sees the light with £6m deal

A MANCHESTER university spin-out, which floated on AIM earlier this year, is ramping up production levels to meet the demands of a lucrative contract.

Nanoco has struck a £6m deal with a Japanese manufacturer of LCD screens to supply its quantum dots – tiny fluorescent particles of semiconductor material which have the ability to emit light.

The dots can be used in products such as LCD TVs, mobile displays and solar panels and are in demand because they reduce power consumption.

Nanoco, which employs 41 staff, said it was gearing up its production facility in Manchester to meet the terms of the contract as well as anticipated demand from four markets: LED lighting, computer and mobile displays, solar cells and bio-imaging.

In the year to July 31 Nanoco saw sales nearly double to £1.9m but pre-tax losses widened to £780,000 from £698,000. Some 80% of revenue came from Asia, mainly through its partnership with the Japanese manufacturer.

Nanoco’s plan is to access its target markets through these partnerships in which it receives revenues during the development phase followed by additional royalties on product sales.

Chairman Dr Peter Rowley said: “The current financial year has started well, with a new joint development agreement with a major Japanese electronics company active in the LCD TV market being signed in September 2009.

“We are making substantial progress in the scale-up of manufacturing and are well on our way to producing our first kilograms of quantum dots. Our strategic relationships are also progressing well, and we anticipate the receipt of further milestone payments during the current half.”

Nanoco was founded in 2001 by Professor Paul O’Brien and Dr Nigel Pickett at the University of Manchester. It floated in May following a reverse takeover.