Nanoco confident going forward, despite ‘false dawns’

Brian Tenner

Manchester tech firm Nanoco increased revenues and reduced losses during the six months to January 31, 2022, it reported today.

It also revealed that it is relocating all its operations to its Runcorn production site.

The firm, a University of Manchester spin-out which develops materials used in the manufacture of monitors and TV screens, achieved sales of £1.099m, compared with £1.004m the previous year. Pre-tax losses fell from £2.676m in 2021 to £2.347m.

Nanoco managed to reduce its average net monthly cash burn to £0.3m, against £0.4m a year ago.

At the reporting period end it had net cash of £1.8m, which increased to £2.6m in February, with the receipt of tax credit and major customer payments.

It said anticipated commercial production and pipeline conversion could extend cash visibility.

Two more work packages were received for the delivery of an enhanced and scaled up version of Nanoco’s technology with its significant European electronics customer, including one post-period end.

Also, technical and commercial milestones were delivered in full on an important sensing project for an Asian chemicals customer.

The company said it is consolidating activity at its Runcorn plant in anticipation of commercial production while also delivering sustainable cost savings.

On February 14, 2021, Nanoco initiated an IP (intellectual property) infringement lawsuit against South Korean electronics giant Samsung. The company said its case continues in line with expectations and its confidence in a positive outcome has increased.

A decision from the Patent Trial and Appeal Board on the validity of its five patents is due next month, and a trial is expected to start in the second half of 2022.

Chief executive, Brian Tenner, said: “Good progress has continued on a number of fronts throughout the period, with extremely encouraging progress on manufacturing scale-up which has the potential to lead to our first commercial production orders.

“Our operational efforts, therefore, now focus primarily on scale up activities and re-commissioning our Runcorn production facilities. In parallel, we continue to provide an expanding range of materials to a number of customers for multiple potential use cases.”

He added: “Given the progress towards commercialisation, we have taken the decision to consolidate all of our activities on to our Runcorn production site. This will bring our excellent R&D and process scale-up activities alongside commercial production, reflecting the change in emphasis from research to commercial production. This also has the benefit of reducing our cost base by around £0.7m per annum, once the Manchester site is fully vacated.

“The litigation against Samsung for the alleged wilful infringement of Nanoco’s IP and the Inter Partes Reviews (IPRs) of our patents continues to progress well. We look forward to a confirmation of the validity of our patents by the PTAB in May 2022 and expect the Texas trial to be re-scheduled shortly thereafter for a date in the second half of CY22.

“The board is convinced of the significant value that can be generated in the short to medium term by our strengthening commercial prospects and further positive momentum in our IP litigation against Samsung. In co-locating all of our activities into a re-commissioned Runcorn site we are building the strongest possible foundation to support a transformation in shareholder value in the short to medium term.”

Looking ahead, the group said: “Given the history of the company and the false dawns we have faced, we are naturally cautious but increasingly optimistic.

“We continue to make strong and steady progress in developing new nanomaterials for use in a wide range of potential sensing applications. Our major customers have extensive market reach which creates potentially significant ‘pull’ on demand for our materials, once the end users have confirmed adoption of the technology. We continue to engage with a number of other potential customers for sensing, display and lighting applications.”

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