Non-recurring milestone payments and shipment delays at partner Dow Chemical ripped into sales at Nanoco (NANO) in the first half, widening its adjusted operating loss by more than half to £6.3m. More positively, the producer of cadmium-free quantum dots and other nanomaterials revealed a revised game plan, following the recent conversion of its licensing agreement with Dow to non-exclusive. Management hopes to compensate for a lower royalty rate and no performance-based income by recruiting additional partners and selling directly to the display market.
Nanoco prepared for its new strategy by boosting manufacturing capacity at its Runcorn facility in Cheshire. It also made progress in the lighting market, launching four product lines and penning another joint-development deal with Osram. Moreover, it formed a life sciences division to tap into the healthcare imaging market. And technological advances mean its solar ink can now convert 17 per cent of light into electricity.
Broker Stifel expects a pre-tax loss of £10.4m in the year to July, giving a loss per share of 4p (from losses of £10.3m and 4.1p in FY2015).
NANOCO (NANO) | ||||
---|---|---|---|---|
ORD PRICE: | 43.3p | MARKET VALUE: | £103m | |
TOUCH: | 43-43.5p | 12-MONTH HIGH: | 116p | LOW: 35p |
DIVIDEND YIELD: | nil | PE RATIO: | na | |
NET ASSET VALUE: | 10p | NET CASH: | £18.3m* |
Half-year to 31 Jan | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
---|---|---|---|---|
2015 | 1.6 | -4.1 | -1.5 | nil |
2016 | 0.3 | -6.3 | -2.2 | nil |
% change | -82 | - | - | - |
*Excludes £1.9m in R&D tax credit expected in April 2016 |