Technology group reports bigger losses but sees cash runway extended

Manchester technology business, Nanoco, has seen annual turnover tumble and losses widen, it revealed today.

In the year to July 31, revenues fell from £7.123m to £3.856m, while pre-tax losses deepened from £5.509m to £5.960m.

The business, a University of Manchester spin-out developing materials used in the manufacture of monitors and TV screens, has slimmed its board and several staff have left during the year to reduce costs.

In July it raised £3.4m to, in part, support a patent infringement lawsuit against Samsung. It also secured substantial litigation funding with a third party.

During the year it said new contracts were signed with ST Microelectronics to develop novel materials for infra-red sensing and other customers for display applications.

The business was restructured to focus resources and reduce monthly cash costs by 50%.

It said its cash runway has been extended to December 2022, providing opportunity to re-build organic value.

Dr Christopher Richards, Nanoco’s chairman, said: “This has been a year of substantial change for Nanoco.

“We finished the year with new leadership and a more focused team, poised to win new business in our core target sectors.

“This new focus was strongly endorsed by our shareholders, who supported the raising of £3.4m in new equity.

“As we closed the year, a number of small but significant commercial wins were added to our existing agreements with ST Microelectronics, including new applications in the sensing and display sectors, to give £1m of contracted revenues for FY21.

“The launch of litigation proceedings against Samsung was an important step to protect our IP.

“The funding we subsequently achieved for that litigation is both critical to facilitating a successful outcome while also being a strong third party endorsement of the strength of our case.

“We have taken decisive action to reduce our cost base, starting by reducing the cost of the board, while retaining our key operational capabilities.

“In combination with the equity fundraise, the actions we have taken have significantly extended the cash runway for the group to December 2022.

“This creates significant optionality for shareholders, whether in re-building the organic value of the business or in the Samsung lawsuit.”