TIDMNANO
RNS Number : 9556O
Nanoco Group PLC
25 August 2017
NANOCO GROUP PLC
("Nanoco" or the "Group" or "Company")
Full Year Trading Update and Outlook
Nanoco Group plc (LSE: NANO), the leading developer and
manufacturer of cadmium-free quantum dots ("CFQD") and other
nanomaterials, provides the following trading update ahead of its
preliminary results for the year ended 31 July 2017.
It has been a significant year for the Group with solid advances
towards the commercialisation of its technology. Unaudited revenues
in the year and net cash at the year end were in line with the
Board's expectations.
Highlights in the year included:
-- -- The Group's first commercial orders - to supply CFQD resin to global manufacturer Wah Hong
-- -- New routes to market established for CFQDs in Display
-- -- TVs using Nanoco CFQD(R) Fine Color Film(TM) exhibited at CES in January 2017
-- -- Runcorn manufacturing facility became commercially viable
-- -- A growing pipeline of potential Display business
-- -- Progress in Life Sciences and Lighting markets
Display Market
The market in Display for CFQDs continues to grow, driven by the
increasing appetite for enhanced colour and brightness and the
penetration of Ultra High Definition ("UHD") TVs. According to IHS
forecasts, 26 million displays will be QD equipped by 2021, with
more than 90% of the market cadmium-free. Samsung, with its
recently launched QLED brand, is leading the field and sold more
than three million QD displays in 2016.
While other Display OEMs are embracing CFQD technology, adoption
continues to be slow and protracted regulatory change to restrict
the use of Cadmium has been unhelpful. However, the recently
announced legislation in Europe, banning the use of Cadmium in
Displays from October 2019, may be expected to accelerate the move
to CFQDs. Several major Taiwanese and Chinese display and TV
manufacturers are now actively seeking CFQD solutions, where Nanoco
continues to have a competitive lead.
Commercialisation
Nanoco's Runcorn manufacturing facility has been extensively
enhanced - with costs substantially reduced - to enable the Group
to supply commercial quantities of its product to fulfil the
anticipated volume of future orders. It now has capacity to produce
enough CFQDs to supply approximately one million large TVs,
operating on a 24/7 shift pattern. Further capacity can be achieved
with limited capital expenditure and will be brought online as
demand increases.
The Group's relationship with Wah Hong Industrial Corporation,
its optical film partner, has progressed well. Product from Nanoco
/ Wah Hong was used by three manufacturers, Hisense, TCL and TPV
Philips at CES in January 2017, to demonstrate prototype large
screen, UHD, wide colour gamut LCD TVs. Feedback and lead
generation from CES was encouraging and further validated the
market opportunity. As a result, Wah Hong brought forward its
investment in a new coating line which is now commissioned and
capable of producing films to fit up to 100 inch TVs. These
developments resulted in Wah Hong placing the first commercial
order for CFQDs from Nanoco in June 2017.
Nanoco's sales pipeline remains full with the same number of
OEMs and programmes as stated on 30 June 2017. The Group's key
short-term focus is on 10 TV and monitor projects with five
companies, however Nanoco will continue to develop further
opportunities in the future.
Nanoco's other channels to market are via its two licensees, The
Dow Chemical Company ("Dow") and Merck KGaA ("Merck"). Dow sells
product under the Trevista(TM) brand, manufactured in its facility
in South Korea. Dow commented that it sees growing interest in
cadmium-free quantum dots and has been engaged with several display
customers considering adopting quantum dot technology.
Nanoco has completed the transfer of our technology to Merck who
have successfully produced pilot plant scale quantities of CFQD's
at their Darmstadt Germany facility. Merck is carefully watching
the development of the cadmium free quantum dot market and will
continue to purchase CFQD products from Nanoco until they decide to
build their own manufacturing facility. Merck is actively engaged
with their potential customers on various CFQD application projects
and sells under the LiviluxR brand.
In May 2017 Nanoco signed a collaboration and JDA with Kyulux
Inc to future proof the Group and ensure it remains at the
forefront of next generation products. Under the agreement,
Nanoco's CFQDs will be combined with Kyulux's technology to create
future generation hybrid OLED / QLED display technology with
superior qualities to existing products in the display market.
Nanoco has also strengthened its patent portfolio in
Electroluminescence with the acquisition of a patent portfolio from
Kodak Eastman. Today the Group benefits from c.600 patents and
patent applications.
Other Markets
While Display was the Group's primary focus during the year,
Nanoco continued to develop its other target markets of Life
Sciences and Lighting. Nanoco's Life Sciences division made further
progress in in-vivo optical imaging, diagnosis and targeted therapy
of cancer, being awarded an Innovate UK Grant for a VIVODOTS TM
programme in conjunction with University College London targeting
pancreatic cancer.
Lighting continues to make headway, in line with management's
expectations, within specialty niche markets including horticulture
and photodynamic therapy products.
The Board has decided that the Solar business is non-core and
has commenced the process to divest that business.
People
Due to the changes in commercialisation strategy and continued
prudent cash management, staff numbers have been reduced to c.80.
However, there were also important new hires during the period,
including the appointment of David Yao as Senior Vice President of
Global Sales, based in Asia.
Financial
Unaudited revenues and other operating income in the year were
in line with the Board's expectations. The balance sheet had
unaudited net cash of GBP5.7 million at 31 July 2017 compared with
GBP8.3 million at 31 January 2017 (31 July 2016: GBP14.5 million)
and was in line with the Board's expectations. Costs continue to be
tightly controlled to maximise the cash runway and operating costs
are currently c.GBP750k/month.
Outlook
The Group continues to make solid progress in commercialisation
of CFQDs and expects to announce further orders from its healthy
pipeline of projects. With the market continuing to develop more
slowly than originally anticipated, we remain focused on careful
management of costs ahead of the anticipated sales ramp-up. The
Board remains confident that the opportunity for CFQDs, both in
Display and in other sectors, remains exciting and, moreover, that
the Company has a competitive lead in this technology.
Nanoco expects to announce its preliminary results for the year
ended 31 July 2017 in October 2017.
This announcement contains inside information.
For further information, please contact:
Nanoco Tel: +44 (0) 161 603 7900
Michael Edelman, Chief Executive Officer
David Blain, Chief Financial Officer
Caroline Watson, Investor Relations Manager Tel: + 44 (0) 7799
897357
cwatson@nanocotechnologies.com
Peel Hunt
Tel: +44 (0) 20 7418 8900
Adrian Trimmings
George Sellar
MHP Communications Tel: +44 (0) 20 3128 8570
Reg Hoare / Andrew Leach / Giles Robinson / Peter Lambie
nanoco@mhpc.com
Notes for editors:
About Nanoco Group plc
Nanoco is a world leader in the development and production of
cadmium-free quantum dots and other nanomaterials for use in
multiple applications including LCD displays, lighting, solar cells
and bio-imaging. In the display market, Nanoco has non-exclusive
manufacturing and marketing licensing agreements with The Dow
Chemical Company, Merck KGaA and Taiwan's Wah Hong Industrial
Corporation. Nanoco also has a strategy of direct sales in display
and in its other target markets, including lighting.
Nanoco was founded in 2001 and is headquartered in Manchester,
UK. It has production facilities in Runcorn, UK, and a US
subsidiary, Nanoco Inc, based in Concord, MA. Nanoco also has
business development executives in Japan, Korea and Taiwan. Its
technology is protected worldwide by a large and growing patent
estate.
Nanoco is listed on the main market of the London Stock Exchange
and trades under the ticker symbol NANO. For further information
please visit: www.nanocogroup.com.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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August 25, 2017 02:00 ET (06:00 GMT)
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