Nanoco Group

LN: NANO1

Market Cap£60.1m

Last Close 19.65p

Nanoco Group is a global leader in the development and manufacture of cadmium-free quantum dots and other nanomaterials. Its platform includes c 560 patents and specialist manufacturing lines. Focus applications are advanced electronics, displays, bio-imaging and horticulture.

Investment summary

FY21 revenue totalled £2.1m, of which £1.6m was attributable to a major European customer. This was substantially lower than the £3.9m achieved in FY20, which benefited from £2.5m of revenues attributable to the final phase of the joint programme with the major US customer. Nevertheless, EBITDA losses were stable at £2.9m because of the substantial cost savings resulting from the restructuring programme. Free cash outflow totalled £3.7m, which was partly offset by the non-dilutive subscription for loan notes in July raising £3.0m (net).

Y/E Jul	Revenue (£m)	EBITDA (£m)	PBT (£m)	EPS (fd) (p)	P/E (x)	P/CF (x)
2020A	3.9	(2.9)	(4.9)	(1.39)	N/A	N/A
2021A	2.1	(2.9)	(4.7)	(1.30)	N/A	N/A
2022E	2.0	(3.1)	(4.9)	(1.42)	N/A	N/A
2023E	N/A	N/A	N/A	N/A	N/A	N/A

Industry outlook

Since gross monthly cash costs have been cut to c £0.4m, and cash at the end of FY21 was £3.8m, management estimates that the loan notes have extended the cash runway for organic business activities into calendar H222, at which point there should be good visibility of potential production orders. The initial result of the Patent Trial and Appeal Board and the verdict from the re-scheduled trial in the patent litigation against Samsung are both expected during calendar 2022, so the cash runway maintains both potential sources of value for shareholders.

Last updated on 18/01/2022