Nanoco transformed by Dow tie-up

The fact that results were ahead of market expectations (gross profits were up by 170 per cent to £1.96m) was due to a $1m (£0.63m) upfront payment made by Dow. But at this early stage of Nanoco's commercial development, financial returns are of secondary importance. What matters is that the deal secures a major global marketing channel, while providing Nanoco with the ability to rapidly scale-up production in response to burgeoning demand from the electronics industry. Nanoco's existing production capacity will increase by 140 per cent to 60kg within the next few months, but the involvement of Dow will ramp-up output to around 1,000 kg by the second half of next year.

Nanoco and Dow are now in discussions over bulk purchase agreements with major players in the sector such as Samsung and LG Electronics, while one of the world's biggest lighting manufacturers - Osram - has taken the decision to formally confirm its commercial ties with Nanoco, 18 months after completion of a previously confidential joint development agreement - another validation of the quantum dot technology.

Liberum Capital anticipates compound annual revenue growth of 126 per cent through 2013-17, with EPS of 6.4p in 2015 followed by 26.4p the year after and 39.4p the year after that.