Nanoco Group Plc (LON:NANO), a pioneering figure in the world of nanotechnology, has announced impressive results for its year ending 31 July 2023. Reporting robust revenue growth and a notably reduced adj. LBITDA, the company seems to be at a pivotal juncture in its journey. Moving from its initial role as an R&D innovator, Nanoco is swiftly transitioning into a dominant producer of QD (Quantum Dot) materials.
The company’s recent financial performance illustrates a promising trajectory. For instance, revenue surged, more than doubling to £5.6m from £2.5m the previous year. This growth is further substantiated by a sharp 83% reduction in adjusted LBITDA loss, standing at £0.4m compared to the £2.3m LBITDA in FY22. With year-end cash reserves of £8.2m, marking an increase of £2.2m since January 2023, Nanoco’s financial health is at its peak since its inception.
A significant factor bolstering Nanoco Group Plc’s strong financial position was the litigation settlement with Samsung. As part of this settlement, the group sold non-core IP, generating a substantial profit of £68.7m, and also secured a licensing deal for its technology at £53.0m, spread over 8.8 years.
Nanoco’s current trading insights reveal promising prospects, with the anticipation of the Group’s first-ever production order before the close of CY2023. This milestone, indicates the growing acceptance and potential scalability of their products in the tech ecosystem. The initial demand may be for lower volumes, but with broader adoption, there’s potential for significant expansion, especially in mobile applications.
The display market, which uses Nanoco’s CFQD® quantum dots, presents a substantial growth opportunity. The company’s dual approach of licensing and supplying materials from its manufacturing capability has garnered increased interest, particularly after the successful resolution of its patent trials and litigation. The market’s shift towards cadmium-free solutions, coupled with projections of quantum dots expanding their market share significantly by 2030, places Nanoco in an advantageous position.
Furthermore, the sensing electronics sector is another avenue where Nanoco is making significant strides. Targeting opportunities within the CMOS Image Sensor market, the company is poised to benefit from the forecasted rapid growth in this domain. With advancements in QD CMOS sensing technology and collaborations with major global markets, the future looks promising for Nanoco.
Investing the proceeds from the litigation, the Board has outlined plans to fund the Group’s commercial activities, accelerate the development of new-generation sensing materials, and improve production efficiency. There’s also a strategic focus on expanding their footprint, self-financing the IP licensing program, and becoming debt-free.
The method for the proposed return of capital to shareholders is yet to be decided, but there’s anticipation of either a special dividend or a share buy-back program.
In preparation for commercial production, Nanoco has achieved all development, scale-up, and production readiness milestones. Their positioning in the display market, with CFQD® quantum dots, showcases their potential to leverage the intellectual property they hold. Their recent settlements have also emphasized the value and need for their technology in the market.
Nanoco’s journey in the sensing electronics domain has seen them achieve all development, scale-up, and readiness milestones. The company’s focus on camera and imager opportunities within the CMOS Image Sensor market is backed by forecasts predicting substantial market growth in the coming years.
Nanoco Group Plc stands at an exciting crossroads. Their robust financial performance, combined with strategic investments and a clear vision for the future, positions them as a leader in the nanomaterials industry. The Board’s confidence in becoming self-financing by 2025 further underscores the company’s potential. With an equity that’s undervalued given its vast opportunities and proven IP, Nanoco Group Plc is undoubtedly a name to watch in the nanotechnology realm.
