Nanoco in best position in its 20-year history, despite shareholder unrest

Nanoco has reported better interim revenues and reduced pre-tax losses for the six month period to January 31, 2023, today.

The University of Manchester spin-out, which has relocated to Runcorn, develops materials used in the manufacture of monitors and TV screens and technologies for medical imaging and the early diagnosis of cancer.

Revenues of £1.562m, were up from £1.099m the previous year, while pre-tax losses reduced slightly, from £2.347m a year ago, to £2.334m.

The business benefited from its successful IP litigation case against South Korean electronics giant Samsung in February which will pay Nanoco $150m.

Directors said Nanoco is a fully underpinned organic business with significant growth opportunities. It announced final validation is under way for two nano-materials for a European electronics customer, with orders anticipated by the end of 2023.

It added it has significant forecast growth in core markets, with increasing end user applications in sensing and increasing QD market share in display.

Facility and staffing levels are being prepared for potential production orders, while the business delivered development milestones for an Asian chemical company, with new agreements being discussed, and there are other early-stage engagements with customers in display with materials on test.

Nanoco said its second half results will benefit from the first tranche of litigation proceeds.

At the period end the business had net cash of £6m with a monthly net cash burn of circa £100,000 prior to receipt of the proceeds from the sale of IP and license agreement post period end.

Chief executive, Brian Tenner, said: “We are closer to commercial production than at any time in our 20 year history, with orders anticipated by the end of 2023.

“Our organic growth runway is now underpinned by a firm financial footing following the monetisation of the group’s IP portfolio as a result of the outcome of the lawsuit.

“The litigation process also allowed us to successfully validate Nanoco’s IP and, combined with the work we have done to right-size the group’s cost base over the last few years, Nanoco is now positioned as an agile player with validated IP operating in attractive and growing core end markets of sensing and display.

“It also allows us to proactively pursue new licensing opportunities with other companies employing certain quantum dot technologies, accompanied by the financial wherewithal not to be bullied by other potentially infringing parties, no matter what size.”

He added: “Overall Nanoco is in a strong position, has an encouraging outlook and looks to the future with confidence.”

Yesterday, (March 27) Nanoco’s senior management rejected shareholder calls to step down.

The shareholder group, led by Tariq Hamoodi, claims the company gave misleading information relating to settlement prospects in its intellectual property litigation with Samsung.

The company achieved a $150m payout from Samsung, which was criticised in some quarters as below forecasts. Nanoco will retain around $90m after litigation costs.

The shareholder group wants chief executive Brian Tenner and chief financial officer Liam Gray to step down, according to a letter dated March 10.

A statement issued to the stock exchange by Nanoco said: “Nanoco notes the contents of a letter sent to its board, that had been acknowledged by the company, that has been made public today by a group of shareholders led by Tariq Hamoodi.

“Nanoco’s board emphatically rejects the shareholder group’s speculative concerns about certain actions and activities involving Nanoco.

“The directors of Nanoco have no intention of stepping down from the board and are confident that the board’s actions and statements over the period of the Samsung litigation were in line with its corporate governance duties, obligations and standards.”