City round-up: Nanoco; Moneysupermarket; Grafenia

Runcorn tech company, Nanoco, has declared a pre-tax profit for the year to July 31, 2023, and said it has moved from “an R&D first mover to a commercial producer”.

Its unaudited results show a 128% increase in revenues, of £5.6m, and a £9.573m pre-tax profit, compared with a pre-tax loss of £5.221m the previous year.

Earlier this year the University of Manchester spin-out, which develops materials used in the manufacture of monitors and TV screens and technologies for medical imaging and the early diagnosis of cancer, won a long-running intellectual property case against electronics giant, Samsung.

It will receive $150m from the case, of which $90m will be used to fund future growth and much of the rest as a return to shareholders.

And in August, the board successfully repelled a bid to oust senior managers in a move by a disgruntled shareholder, winning the seal of approval from major stakeholders for its growth strategy, which it illustrated further today.

Nanoco said it is now closer to commercial production than at any time in its 20-year history and is in the strongest financial position since its inception. It said sensing and display markets are forecast to experience rapid growth, and it is on a new non-executive director recruitment drive.

It has achieved all its development, scale up and production readiness milestones, and two sensing materials are in final production validation with the customer. Deeper and longer development contracts are under discussion with two long-standing customers and there is increasing customer engagements for CFQD materials including micro-LED displays.

The company also indicated it is not shying away from further potential intellectual property actions. It said the Patent Trial and Appeal Board (PTAB) has validated all patents and 47 associated litigation claims. Contact has been made with potential infringers based on heat map, product analysis, and market attractiveness.

At year end the business had £8.2m in cash reserves, an increase of £2.2m since January 31, 2023.

Nanoco is discussing contract terms of its first ever commercial production order, expected to be received before the end of calendar year 2023, while expanding its commercial R&D contracts with a number of customers with the goal of adding a further global electronics supply chain customer in fiscal year 2024.

It expects its order book to rise to deliver similar services and material revenue to that seen in FY23, licence income will reflect a full year of the litigation settlement, it said.

Chief executive, Brian Tenner, Nanoco’s CEO, said: “We have driven Nanoco steadily towards its current inflection point. We have delivered all development and scale-up milestones for our sensing customers. We have also significantly enhanced our robustness as an important partner in global electronics supply chains. We are now discussing the contract terms of our first ever commercial production order, expected to be received before the end of CY23.

“In parallel with the transition to production, we are also expanding our commercial R&D contracts with a number of customers with the goal of adding a further global electronics supply chain customer in FY24.

“Our transition from an R&D first mover to a commercial producer is underpinned by the proceeds from the settlement which are enabling us to invest carefully to expand the range and reach of our materials, whilst at the same time self-funding the monetisation of our IP.”

He added: “We started the litigation process in February 2020: a long legal road lay ahead, we had limited prospects for commercial production, there were no anchor customers in place, the Formal Sale Process was stalling in the face of COVID-19, and we had a recurring need to raise new funding every year.

“Fast forward: we exit FY23 with a successful outcome to the litigation, the expectation of a commercial production order before the end of CY23, two active global long term customers, an expanding range of materials and device capability, a financially underpinned business and the ability to execute on our firm commitment to return significant capital to shareholders in Q1 CY24.

“The whole Nanoco team has worked hard to deliver these outcomes. A lot has been done. Our team will keep working hard as there is still a lot to do to capture the opportunities in front of us. The board is, therefore, rightly confident in the strength of the investment proposition and value inherent in the business.”

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Dame Judi Dench

Price comparison website, Moneysupermarket.com, saw double-digit returns in its insurance and travel sectors, it revealed in a third quarter trading update today.

The business, based in Ewloe, near Chester, achieved a 14% overall increase in revenues of £115.6m during the three months to September 30, 2023.

The insurance sector experienced a 38% uplift in revenues, while travel saw a 31% improvement.

It said high levels of switching in car and home insurance have continued, supported by ongoing premium inflation and rebounding volumes post the FCA General Insurance Pricing regulations introduced last year.

In Money, a robust banking performance was assisted by several promotions in current accounts, although the group said it was lapping a period of very strong savings and current account deals last year. The high interest rate environment continues to impact conversion for borrowing products.

Home Services saw continued softness in broadband switching, partially but not fully offset by strong growth in mobile switching. The group continues to see no material switching in energy.

Travel continued to grow as the wider market recovers, with strength in package holidays.

However, cashback has continued to face headwinds in retail and telecoms in the period.

Looking ahead, Moneysupermarket, which features Dame Judi Dench in its current promotional campaign, said its resilient business model, combined with ongoing strategic progress, gives the board continued confidence that the group will deliver in line with market expectations for the full year.

Chief executive, Peter Duffy, said: “We help millions of people save money on their bills. While headwinds in some of our markets persist, we’re making progress on our strategy – expanding our offering while attracting and retaining customers more efficiently.

“We’re particularly excited to have launched a rewards and loyalty programme under the MoneySuperMarket brand, the SuperSaveClub. It’s very simple – if we help customers save more, we will drive profitable growth for the group.”

Moneysupermarket shares rose 6.69% in early trading to 261.40p per share.

Russ Mould, investment director at Manchester investment platform, AJ Bell, said: “Moneysupermarket continues to enjoy tailwinds from consumers looking to get a better deal on insurance products.

“With drivers getting punishing price hikes in their annual renewal letters, it’s no wonder they are looking elsewhere for cheaper deals. A similar trend is seen among home insurance policies.

“Moneysupermarket is one of the best known comparison sites in the UK and it is raking it in from product sales commissions, hence the positive share price reaction to the latest trading update.”

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Manchester-based software services group, Grafenia, confirmed its change of name to Software Circle plc, from tomorrow (October 18).

It announced the move following last month’s annual general meeting.

The name reflects the business’s updated strategy, to transition from a print services to a software group.

The AIM-listed business is now home to five software business units across multiple sectors.

In August it announced plans to raise £28m to fund future acquisitions in the software sector.