Tech firm achieves best financial performance in its history

Dr Michael Edelman

Nanoco Group said today that it has achieved its best financial results, for the year to July 31.

Revenues doubled from £3.315m to £7.123m, while a pre-tax loss of £5.5m compared with a pre-tax loss of £7.4m a year ago.

Billings showed a significant increase to £9.6m, up from £6.5m in 2018.

The firm – a spin-out from Manchester University which develops materials used in the manufacture of monitors and TV screens – said its board remains confident in its future.

In June this year Nanoco revealed that a contract with a major US customer was ending prematurely, in December, when it announced that the customer had decided not to continue its project beyond the current contract, “for reasons wholly unconnected to the performance of our materials and our service delivery”.

However, the company, which has a production facility in Runcorn, said today that it expects to have around £6m cash on hand in December when the contract ends, while there is further headroom to reduce costs and preserve cash if commercial revenue streams are delayed.

During the year Nanoco achieved significant improvements in dot performance, and focused commercial efforts on the two attractive, high growth markets, of Nano materials for use in the electronics industry, and the display sector.

Chief executive Dr Michael Edelman said: “The group has made strong progress this year in a number of different areas, delivering our best ever financial results.

“We have delivered rapid developments in our platform technology, building on our solar expertise to develop materials for use in new end markets for infra-red sensing materials, while at the same time significantly upgrading the performance of our CFQD quantum dots for use in display applications.

“We also increased our IP portfolio of patents granted and pending to 745, an increase of just over 90 during the period.”

He added: “We had £7m in cash at the end of the financial year and expect to have around £6m at the end of December 2019 when the current contract with the US customer expires.

“We maintain close control of our cost base and reluctantly had to reduce our headcount by 20% in Q4 of the financial year.

“The restructuring has already been paid back and ongoing benefits are coming through in our monthly trading figures.

“The combination of our financial resources and trading performance gives us headroom to deliver on the current pipeline of commercial opportunities to create meaningful organic cash flows. Our medium-term goal remains to achieve a self-sustaining level of annual cash flows.”

Looking ahead, he said: “Our challenge now is to re-build momentum in the business through the conversion of our commercial pipeline.

“To that end, we are using our newly-developed materials and know-how in the field of infra-red sensing to engage with other potential customers and applications in this sector.

“We have also re-doubled our efforts to develop new relationships in the display sector with other potential partners.

“We remain closely focused on the potential funding needs of the business in this context and the importance of continuing to ensure the maximisation of shareholder value.”

He added: “Having been close to achieving our long term goal of transitioning from an R&D services business to a fully-fledged production company, it is a source of great strength that we retain the know-how, IP portfolio, production capability and highly capable technical resource in our staff to still achieve that long term goal.

“In so doing, I am confident that we can deliver value for all of our stakeholders.”

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