Nanoco Group plc: Full Year Trading Update
OREANDA-NEWS. Nanoco Group plc (LSE: NANO), a world leader in the development and manufacture of cadmium-free quantum dots and other nanomaterials, provides the following trading update ahead of its preliminary results for the year ended 31 July 2016.
During the year, the Company made substantial progress and achieved a significant number of commercial, technological and organisational milestones.
Commercially, the Company took a major strategic step by moving from an exclusive to a non-exclusive model in the display market as announced on 31 March 2016, when it was also announced that Nanoco's licence agreement with The Dow Chemical Company ("Dow") had become non-exclusive. The Company continues to work closely with Dow on the commercialisation of its TREVISTA™ cadmium-free quantum dots based on Nanoco's technology and supplied from Dow's production facility in Cheonan, South Korea. Nanoco is in the process of transferring its improved manufacturing processes to Dow.
The Company has received notification of its royalty payment from Dow for the quarter ended 30 June 2016 and, although modest, it is higher than the first royalty received earlier this year.
The new non-exclusive commercialisation strategy has allowed the Company to open up additional routes into the display market facilitated by a substantial improvement in Nanoco's production processes.
In July, the Company signed a supply and licence agreement with Wah Hong Industrial Corporation, a leading Taiwanese supplier of optical films to the display industry, under which Nanoco will supply resins containing cadmium-free quantum dots from Runcorn. Wah Hong has already received positive interest based on initial samples sent to its customers. The Company recently announced a major licensing agreement with Merck KGaA, the leading German science and technology company focused on healthcare, life sciences and performance materials and the manufacturer of approximately 60 per cent of the world's liquid crystals used in LCDs. Under the agreement, Merck will build its own large scale manufacturing plant to supply Nanoco cadmium-free quantum dots to the display market. Ahead of Merck's own capacity coming on line it will initiate sales with product purchased and supplied from Nanoco's Runcorn plant.
The Company continues to evaluate other potential commercial opportunities in the display sector.
Whilst the display sector was the primary focus of the Company during the year, the Company continued to progress its other target markets: lighting, life sciences and solar. Highlights in these markets during the year included the signing of a further joint development agreement with Osram in general lighting and the formation of a life sciences division at Nanoco to pursue opportunities in the medical devices and diagnostics markets.
This substantial progress in commercialisation and production has been accompanied by significant changes in the organisation of the business, including redeployment of staff to production, strengthening of the supply chain and some critical new hires. Board changes during the year included the appointment of Dr Christopher Richards as Chairman and Brendan Cummins as Senior Independent Director following the resignations of Tony Clinch and Dr Peter Rowley.
Unaudited revenues in the year were ?1.9 million (FY 2015: ?2.0 million). The balance sheet had unaudited net cash of ?14.4 million at 31 July 2016 compared with ?18.3 million at 31 January 2016 (31 July 2015: ?24.3 million). The aforementioned unaudited revenue and cash figures were in line with the Board's expectations.
The Board remains confident of achieving further progress in the commercialisation of the Company's technologies during the current financial year and beyond.
Nanoco expects to announce its preliminary results for the year ended 31 July 2016 in mid-October 2016.