Sparks - Nanoco Group

Following the decision by Nanoco Group’s lead European partner to discontinue its quantum dot (QD) sensor development, Nanoco’s board has announced the outcomes of its strategic review.

The review has concluded that there are still significant commercial opportunities for the company’s products and intellectual property (IP), providing a foundation for delivering shareholder value. Initial opportunities are seen in multiple niche markets, whereas the company’s partnership with an Asian chemicals company is targeting mass market sensing applications via a leading sensing company. Nanoco’s board also highlights the increasing number of original equipment manufacturers’ offering QD displays and the growing sales volumes. This is to the extent that Nanoco is bringing forward plans to seek licensing revenue from firms deemed to be using the company’s IP.

Nanoco highlights that pursuing these opportunities will require both investment and maintenance of the company’s development and manufacturing capabilities. Recognising that the business is sub-scale, particularly as a listed entity, the board has appointed CDX Advisors (CDX) as its financial adviser to review strategic options. Nanoco has ample resources to execute this review and seek an optimal outcome, with estimated net cash of c £20m at FY24e. Nanoco is, nonetheless, implementing a plan to reduce non-critical costs by £2.6m on an annualised basis, which includes headcount reductions, shrinking the board size and the directors are deferring at least 50% of their fees until the financial year-end (31 July 2025). The board has also committed to return surplus cash to shareholders, with an initial return following publication of the FY24 results report and accounts, with further returns over the course of FY25, depending on working capital requirements and the progress of the cost reduction programme.