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Nanoco Group PLC

Nanoco achieve best ever financial results

Nanoco Group (LON:NANO), a world leader in the development and manufacture of cadmium-free quantum dots and other specific nanomaterials emanating from its technology platform, announced its Preliminary Results for the year ended 31 July 2019.

Dr Christopher Richards, Nanoco’s Chairman, commented on the results:

“Nanoco has delivered a strong performance this year, achieving our best ever financial results in the Company’s history. We pushed our innovative platform technology into a range of potentially lucrative commercial applications including IR sensing, while significantly enhancing the performance of our nano-materials and actively engaging in development work in all three display technology generations.

“It was clearly disappointing, for reasons wholly unconnected to Nanoco’s performance or our materials, that the US Customer decided not to continue the current project contract when it expires in December 2019. However, we remain confident in the Group’s assets, team and capabilities. Our expected positive cash position of £6.0m following completion of the current contract deliverables for the US Customer provides us with reasonable headroom to deliver on new sources of commercial income.

“Our commercial focus going forward will primarily be in the electronics and display markets. We are already actively engaged with an encouraging pipeline of potentially attractive opportunities, all of which can be delivered by our current asset and cost base. As ever, the Executive team is alert to the impact of further delays in the realisation of these opportunities and contingency plans are in place to manage any such delays to our commercial development.

“There are still challenges and uncertainties to be managed and the Board remains focused on maximizing shareholder value. Our expanded platform technology continues to be relevant across a wide range of market applications and has created a number of commercial opportunities to pursue. The Board therefore remains confident in the value inherent in the business.”

Operational highlights

·      Platform technology strategy implemented – focus on capabilities in design, development and scale-up of cadmium-free quantum dots (CFQD® quantum dots) and novel nano-materials

·      Significant improvements in dot performance

·      Continued investment in IP portfolio with 745 granted and pending patents (2018: 654)

·      Core R&D, IP and production capabilities retained following display resource pivot

·    Commercial efforts focussed on two attractive, high growth markets which are summarised below:

Nano-materials (for use in the electronics industry)1

o  Achieved US Customer milestones, with £7.8 million contract delivering through to December 2019

o  Completed new Runcorn manufacturing facility, funded by US Customer, now in final product validation

o  Patented nano-material technology now proven in devices

o  Actively engaging with other potential customers in Infrared (IR) sensing market

Display

o  Further deepening of R&D activity into QD-OLED and micro-LED (Gen 2) and electro-luminescent (Gen 3) displays while enhancing performance of dots for film based application as it moves into the mass market (Gen1)

o  Significant improvements in key performance characteristics in Green and Red dots

o  Engaged in commercial opportunities in all three generations of display technology as noted above

Financial highlights

·      Significant increase in billings to £9.6 million (2018: £6.5 million)

·    Revenue more than doubled to £7.1 million (2018: £3.3 million)

·      Loss after tax reduced to £4.4 million (2018: £6.0 million, 2017: £9.1 million)

·      Q4 reorganisation following display resource pivot in Q2, now delivering £0.6m of savings in FY20

·      Waiver of £4.2m contract liability by US Customer offsets non-cash costs triggered by completion of current project

·      Cash of £7.0 million as at 31 July 2019 (31 January 2019: £6.2 million; 31 July 2018: £10.7 million)

o  Expect to have c.£6.0m cash on hand in December 2019 when US Customer contract ends

o  Further headroom to reduce costs and preserve cash if commercial revenue streams are delayed

[1] The Group’s platform technology is built on nano-materials. Nano-materials for use in the electronics industry are one subset of that platform. CFQD® quantum dots are another subset.

Analyst meeting and webcast details

To listen to a webcast of the analyst briefing, please log on to the following web address approximately five minutes before 8.30am on 16 October 2019: https://webcasting.brrmedia.co.uk/broadcast/5d8de042cbe3ca44a572df2c

A recording of the webcast will also be made available on Nanoco’s website, www.nanocogroup.com, later today.

A meeting for analysts will be held at 8.30am this morning, 16 October 2019 at the offices of Peel Hunt LLP, Moor House, 120 London Wall, EC2Y 5ET. For further details please contact Peel Hunt on +44 (0)20 7418 8909

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Disclaimer: Statements in this article should not be considered investment advice, which is best sought directly from a qualified professional.