REG - Nanoco Group PLC - Contract Liability Waived

NanocoAnnouncement

31/07/2019 07:05

RNS Number : 2836H
Nanoco Group PLC
31 July 2019
 


31 July 2019
NANOCO GROUP PLC
("Nanoco", the "Company" or the "Group")
 
Contract Liability Waived
Nanoco Group plc (LSE: NANO), a world leader in the development and manufacture of cadmium-free quantum dots and other specific nanomaterials emanating from our technology platform, today announces an update to the current contract with the US Customer.
The US Customer has formally released Nanoco from its obligation to repay £4.25m of capital funding provided for the new Runcorn production facility due to the uncertainty over the timing or use of the facility to manufacture the new nanomaterials. The facility was completed in December 2018 and is currently undergoing commissioning as part of the current contract of work that is due to expire on 31 December 2019.
While still subject to external audit, the lack of contracted production orders on the new Runcorn facility, means that an accounting impairment charge is likely to be made in the year end accounts. Immediately prior to any such impairment, the net book value of the new facility is forecast to be approximately £3.7m. The difference in the two values above reflects depreciation already charged in the year. In addition to both items above, approximately £0.5m of other contract specific raw materials and minor contractual liabilities are also likely to require provisioning at the end of the current financial year. None of the above accounting items have any impact on cash.
For the avoidance of doubt, the operational capability and capacity of the plant has in no way been impaired. Commissioning work continues in line with the current contract with the US Customer. Once that contract is complete in December 2019, the full production capacity will remain available for use by Nanoco to service any future demand from the US Customer or any other potential new customers with whom the Group is in early stage discussions.
As previously announced, the Group still expects to deliver a cash breakeven positon for the twelve months ending December 2019 and to have £6.0m of cash on hand at that time.
Michael Edelman, Chief Executive of Nanoco, said:
"The waiver of the contract liability and the impairment of the Runcorn plant creates a balanced outcome for Nanoco. While the impairment of the plant reflects the lack of current commercial contracts - the plant remains at our disposal and fully capable of producing high quality nanomaterials for use in a number of electronics applications.
With the validation of production material nearing completion, the time to market will be significantly reduced when new commercial customers are identified and we continue our efforts in this area to identify new potential opportunities and to provide excellent service to the US Customer."
This announcement contains inside information as defined in EU Regulation No. 596/2014 and is in accordance with the Group's obligations under Article 17 of that Regulation.
 
The person responsible for arranging for the release of this announcement on behalf of the Group is Brian Tenner, Chief Operating Officer and Chief Financial Officer.
 
For further information, please contact:



Nanoco Group PLC


Tel: +44 (0) 161 603 7900




Michael Edelman, Chief Executive Officer








Brian Tenner, Chief Financial Officer








Caroline Watson, Investor Relations Manager


Tel: + 44 (0) 7799 897357




cwatson@nanocotechnologies.com
 








MHP Communications


Tel: +44 (0) 20 3128 8570




Reg Hoare / Giles Robinson / Pete Lambie
nanoco@mhpc.com







 
Notes for editors:
 
About Nanoco Group plc
Nanoco (LSE: NANO) harnesses the power of nano-materials. Nano-materials are materials with dimensions typically in the range 1 - 100 nm. Nano-materials have a range of useful properties, including optical and electronic. Quantum dots are a subclass of nano-material that have size-dependent optical and electronic properties. The Group produces quantum dots. Within the sphere of quantum dots, the Group exploits different characteristics of the quantum dots to target different performance criteria that are attractive to specific markets or end-user applications such as the Display and Electronics markets. One of the interesting properties of quantum dots is photoluminescence: the emission of longer wavelength light upon excitation by light of a shorter wavelength. The colour of light emitted depends on the particle size. Nanoco's CFQD® quantum dots are free of cadmium and other toxic heavy metals, and can be tuned to emit light at different wavelengths across the visible and infrared spectrum, rendering them useful for a wide range of applications including displays, lighting and biological imaging.
Nanoco has non-exclusive manufacturing and marketing licensing agreements in display with The Dow Chemical Company, Merck KGaA of Germany and Wah Hong Industrial Corporation of Taiwan.
Nanoco was founded in 2001 and is headquartered in Manchester, UK, with a US subsidiary, Nanoco Inc., in Concord, MA. Nanoco continues to build out a world-class, patent-protected IP portfolio generated both by its own innovation engine, as well as through acquisition.
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.




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