Nanoco Group

LN: NANO

Market Cap£127m

Last Close 39.3p

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

Investment summary

Nanoco has signed an agreement for a fifth work package from its major European customer. This covers the final phase of a scale-up of a longer wavelength material and development of a third material. It has also completed a placing and subscription and oversubscribed broker option collectively raising £5.4m (net) at 37p/share.

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	2.4	(2.6)	(4.4)	(1.24)	N/A	N/A
2023E	2.4	(2.7)	(3.7)	(1.00)	N/A	N/A

Industry outlook

This fifth work package gives a monthly revenue rate similar to that delivered in H122, so we raised our FY22 revenue estimate by £0.2m to £2.4m. Importantly, the fifth work package extends for one year starting May 2022, giving Nanoco a more stable environment for business planning. The fifth work package, together with the recent fundraising, extends Nanoco’s cash runway well into CY25, by which point management expects the organic business to be profitable and cash generative. It means Nanoco has sufficient cash even if the litigation with Samsung for patent infringement is prolonged by appeals.

Last updated on 08/08/2022