Development costs widen Nanoco’s losses

NANOCO Group argued that it had made “excellent progress” during its second year as a stockmarket-listed company despite the fact that pre-tax losses ballooned to £3.2m (2010: £1.4m loss) as sales dropped by £300,000 to £2.6m.

The Manchester University spin-out, which makes tiny quantum dot particles, saw its cost base almost double to £1.1m as it incurred more expense in setting up its scale-up laboratory and manufacturing facility at Runcorn.

It also said that more money needed to be spent on joint venture development programmes and on increasing staff numbers, which increased by a third to 56.
However, the company argued that it had achieved several important milestones during the year to July 31 – not least the commissioning of the Runcorn facility on time and to budget, as well as its shipment of 1kg of quantum dots from the facility to a Japanese customers, which triggered a $2m milestone payment.

Nanoco’s chairman, Dr Peter Rowley, said:  “During the year we made major steps in the development and commercialisation of our technology. We built and commissioned our first manufacturing plant, made significant progress in our commercial contracts and strengthened our balance sheet for the next stage in our development.

“Our momentum has continued in the current year and we look forward to achieving further technical and commercial progress in the months ahead.”

The company also signed a joint development agreement with a lighting manufacturer to produce a new lighting system powered by quantum dots and an agreement with Tokyo Electron to use quantum dots in a new range of solar cells.

It also completed a £15m fundraising exercise in January, which meant that by its year end it had cash reserves of £17.1m compared with £5.7m a year earlier.

Rowley said the firm was progressing with plans to expand production capacity further and was currently finalising the design of a new Kilo Lab plant. He said building work had been timed to reflect an anticipated increase in demand as its commercial production increases.

“If demand ramps up more quickly, we can expand capacity on the existing production line to 40kg a year and add further lines at relatively short notice.

“Our technology has a myriad of potential applications, highlighted by recent approaches we’ve received from companies wishing to incorporate (quantum dots) into their products. Whilst we continue to evaluate new applications, we are focused on getting the first products to market.”