LONDON (ShareCast) - (ShareCast News) - Nanoco Group, maker of cadmium-free quantum dots that enhance colours in TVs and other LCD screens, produced a solid first half result but warned on full year profits as sales in the second half "have not yet materialised".
"Nanoco is engaged with more near term commercial opportunities than at any time in its history, so it is frustrating not to be able to report significant revenues to date and it is essential that sales commence as expected," said chief executive Mike Edelman.

The AIM-listed company was considerably encouraged by positive feedback and significant interest from major manufacturers, customers, partners and the financial community shown in its quantum dots at the all-important CES consumer electronics and consumer technology trade show recently.

While first commercial sales of Nanoco's products are expected in the remainder of the second half of this financial year, while it is in discussions with nine display OEMs working on 14 different programs, none of them can be guaranteed during the current year.

In a worst-case scenario of no new sales materialising then Nanoco's cash resources would run out in the first quarter of calendar year 2018 if no action is taken to reduce costs.

However, management's base-case expectations are for sales of commercial quantities of materials produced in the company's Runcorn facility to begin in May, with monthly quantities sold to more than double by October.

The board expect Dow and Merck to both start shipping commercial sales in July and November respectively, with royalties and milestone payments paid to Nanoco quarterly in arrears.

Within six months each company would be expected to reach a stable level of sales representing a five-fold increase from initial volumes.

At the half year stage there was cash and cash equivalents £8.3m plus an R&D tax credit receivable of £1.9m.

"The board believes this gives the company sufficient headroom under the expected timeframe for commercial sales to commence and has carried out detailed contingency planning in event that sales are further delayed."

Revenues in the six months to 31 January of £0.68m was well up on the £0.14m a year ago and losses before tax were £6.4m, up from £6.26m, both as expected.

 

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