Nanoco Group plc (LON: NANO), a world leader in the development and manufacture of cadmium-free quantum dots and other specific nanomaterials emanating from our technology platform, will hold its Annual General Meeting today at its headquarters in Manchester.
Dr Christopher Richards, Nanoco’s Chairman, will make the following statement in respect of the Formal Sale Process and the Group’s trading performance in the first four months of the financial year ending 31st July 2020.
Formal Sale Process as part of the Strategic Review
On the 5th November 2019, the Group announced that it was undertaking a review of all the strategic options for the Company, including, but not limited to, a potential sale of the Company through an FSP, as referred to in Note 2 on Rule 6 of the City Code on Takeovers and Mergers.
The Group is currently in discussions with certain interested parties who have been invited to submit indicative proposals in mid-December for an acquisition of the Group. At this stage, there can be no certainty that an offer will be made, nor as to the terms on which any offer will be made. Further announcements about the FSP will be made as appropriate.
Operational and trading performance
We continue to supply material and other services to the US Customer and other companies in its supply chain in line with the current contract that expires at the end of December 2019. We expect to earn all associated contract revenues in full. The Runcorn plant is now fully commissioned and able to operate at its designed capacity.
We have also received confirmation of the demand by a key participant in the US Customer’s supply chain for further test volumes of our IRQD materials throughout H1 of calendar year 2020 as they seek to identify other application opportunities while completing their own production facilities. Nanoco Group plc and its sensor customers are working hard to identify and secure further infrared sensor opportunities for our technology.
We have also continued to enhance the performance characteristics of our display materials, in particular, their efficiency in absorbing blue light for use in second generation QD-OLED displays. We are in discussion with several potential customers who have shown interest in these materials.
Financial performance in the Period has been in line with expectations for revenue, adjusted EBITDA loss and cash. We started FY20 with approximately £3.5m of contracted orders for delivery in FY20. The majority of this contracted revenue will be delivered in H1 of FY20. We remain in active discussions with existing and other potential new customers. However, progress on new commercial opportunities in Sensing and Display has been slower than expected as a result of the ongoing FSP, with only modest increases in new orders in the Period.
The Company’s expectations for cash on hand in December 2019 are in line with prior communications. The Board continues to review possible sources of additional funding for the Company as part of the Group’s strategic review, with contingency plans in place if needed.