REG - Nanoco Group PLC - Interim Results
27/03/2024 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20240327:nRSa4208Ia&default-theme=true
RNS Number : 4208I Nanoco Group PLC 27 March 2024
27 March 2024
NANOCO GROUP PLC
("Nanoco", the "Company" or the "Group")
Interim Results
Fully funded business with commercial traction investing for a phase of steady
growth
Nanoco Group plc (LSE: NANO), a world leader in the development and
manufacture of cadmium-free quantum dots and other specific nanomaterials
emanating from its technology platform, announces unaudited Interim Results
for the half year ended 31 January 2024 ("the Period" or "H1 FY24").
· Critical milestone of first ever commercial orders achieved
o Shipment in November 2023 of two first-generation materials for use in
infra-red sensing applications in electronic devices (cameras and imagers).
· Continued progress with two global electronics supply chain customers
o Joint Development Agreement signed in January 2024 with
STMicroelectronics, a global semiconductor leader, to optimise the performance
of a second-generation sensing material over a two-year period.
o Joint Development Agreement signed in November 2023 with an important
Asian Chemical supplier of materials to global electronics supply chains over
two years to enhance another high performing sensing material.
· Second tranche of litigation proceeds received
o Return of £33m to shareholders via Tender Offer and Share Buyback now
underway.
o Retained funds to be invested in operational capability, enhancing future
growth prospects, and improving gross margins.
o Nanoco will be debt-free by the end of FY24 and is now fully funded
through to cash breakeven, expected during CY25.
o Financial resources to defend our IP and leverage that same IP for value
· The opportunity ahead
o Successfully transitioned from a speculative R&D first mover to a
financially underpinned, organic growth focused Company, surrounded by a
validated and enforceable IP moat
o Core sensing and display markets are forecast to experience rapid growth
over the next five years - forecast CAGR of over 40% in sensing 1 (cameras
and imagers) and c. 20% in display 2
o Adoption of QD technology in mobile phones for sensors and small screen
micro-LEDs for display should lead to a step change in addressable markets for
Nanoco
Results overview
Operational Summary - investing in new capabilities and supply chain
resilience
· Building and fit out completed post period end for new wafer device
development and testing facility ('Fab') to shorten product research cycles by
up to c.33% and to support engagement with new and existing customers.
· New device team joined post period end, now commissioning newly
arrived equipment.
· Continued early stage engagement with potential new display
customers.
Financial Summary - Trading in line with Board expectations for FY24
· Reported revenue increased to £4.0m (H1 FY23: £1.6m) driven by
recurring IP licence revenue.
o Underlying revenue (excluding Samsung licence revenue) of £1.0m, (H1
FY23: £1.6m). Decrease reflects timing of STMicroelectronics agreement being
signed towards the end of the Period.
· Reported operating profit increased to a profit of £2.4m (H1 FY23:
loss £2.1m) reflecting increased revenue and the FX hedge gain of £2.5m in
relation to the second tranche of litigation proceeds from Samsung, partly
offset by strategic investments.
o Adjusted EBITDA of £0.7m (H1 FY23: LBITDA £1.1m) excludes the one-off
impact of the FX hedge gain and share-based payments.
· Investment in operations has increased gross cash cost base to c.
£0.6m per month (H1 FY23: £0.5m).
· Period end reported cash of £59.3m (£2.5 million FX hedge benefit
received in February 2024).
· The planned return of capital to shareholders (the "Return of Value")
and repayment of outstanding debt of c. £5 million will leave a cash balance
of c. £23 million to support the commercial business.
Outlook
· Expansion of our range of services to include sensing device
development work when Fab is fully commissioned during H2 FY24.
· FY24 performance expected to be in line with market expectations 3
(#_ftn3)
· Continued progress as a full-service production company with the goal
of becoming cash breakeven during CY25, in line with previously set out
timeframe.
Brian Tenner, Chief Executive Officer of Nanoco Group plc, said:
"Delivering our first ever commercial orders was a huge achievement for the
whole Nanoco team. Sales volumes of first generation materials are expected to
grow gradually over time to deliver a cash breakeven position during CY25.
Adoption of the technology in mobile phones would lead to further significant
growth.
"Our current two global customers - both leading suppliers to the electronics
industry - are a testament to Nanoco's leadership in novel nanomaterials. Our
key display and sensing IP was emphatically validated in the recent Samsung
litigation. The new second generation materials under development will deliver
significant performance improvements to open up new applications in automotive
and dynamic image capture. All of our materials form part of our 'platform
technology', being adaptable to a wide range of markets, applications and form
factors.
"We are pleased to be returning £33.0 million of value to shareholders while
retaining funds for the compelling use cases we have previously outlined.
Having spent five years fighting for financial survival, we have now been able
to make some cautious but important strategic investments in new capabilities
and our resilience as a supply chain partner. These will accelerate our
development plans and commercial progress, as well as allowing us to self-fund
IP licensing efforts. The combination of a fully funded business with
commercial traction is a strong foundation on which to build."
= Ends =
Webcast for sell side analysts
A conference call and webcast for sell side analysts will be held at 10:00am
(UK time) this morning (27 March 2024):
For further details please contact Powerscourt at nanoco@powerscourt-group.com
(mailto:nanoco@powerscourt-group.com) .
A recording of the webcast will also be made available on Nanoco's website
later today at www.nanocotechnologies.com
Investor Meet Company presentation for investors
There will be a further presentation for investors via the Investor Meet
Company platform on 2 April 2024 at 10:00am. Questions can be submitted in
advance via the Investor Meet Company Dashboard before 5:00pm on 28 March 2024
or on the day. Investors can sign up to the Investor Meet Company platform for
free and register their interest in events hosted by Nanoco Group Plc via:
https://www.investormeetcompany.com/nanoco-group-plc/register-investor
(https://www.investormeetcompany.com/nanoco-group-plc/register-investor)
Investors who already follow Nanoco Group Plc on the Investor Meet Company
platform will automatically be invited.
For further information, please contact:
Nanoco Group PLC:
Brian Tenner, CEO +44 (0) 1928 761 404
Liam Gray, CFO & Company Secretary
Cavendish Capital Markets Limited (Financial Adviser & Joint Corporate
Broker):
+44 (0) 20 7220 0500
Ed Frisby / George Lawson (Corporate Finance)
Tim Redfern / Charlie Combe (Corporate Broking)
Jasper Berry (Sales)
Turner Pope Investments (Joint Corporate Broker):
Andrew Thacker +44 (0) 20 3657 0050
James Pope
Powerscourt (Public Relations)
Elly Williamson +44 (0)7970 246 725
Ollie Simmonds
Nanoco@powerscourt-group.com (mailto:Nanoco@powerscourt-group.com)
FORWARD LOOKING STATEMENTS
This announcement (including information incorporated by reference in this
announcement) and other information published by Nanoco may contain statements
about Nanoco that are or may be deemed to be forward looking statements.
Such statements are prospective in nature. All statements other than
historical statements of facts may be forward looking statements. Without
limitation, statements containing the words "targets", "plans", "believes",
"expects", "aims", "intends", "will", "may", "anticipates", "estimates",
"projects" or "considers" or other similar words may be forward looking
statements.
Forward looking statements inherently contain risks and uncertainties as they
relate to events or circumstances in the future. Important factors such as
business or economic cycles, the terms and conditions of Nanoco's financing
arrangements, tax rates, or increased competition may cause Nanoco's actual
financial results, performance or achievements to differ materially from any
forward looking statements. Due to such uncertainties and risks, readers are
cautioned not to place undue reliance on such forward looking statements,
which speak only as of the date hereof. Nanoco disclaims any obligation to
update any forward looking or other statements contained herein, except as
required by applicable law.
About Nanoco Group plc
Nanoco (LSE: NANO) is a nanomaterial production and licensing company,
specialising in the production of its patented cadmium free quantum dots
(CFQD®) and other patented nanomaterials for use in the electronics
industries.
Founded in 2001 and headquartered in Runcorn, UK, Nanoco continues to build
out a world-class, patent-protected IP portfolio alongside the scaling of the
production for commercial orders.
Nanomaterials are materials with dimensions typically in the range 1 - 100 nm.
Nanomaterials have a range of useful properties, including optical and
electronic. Quantum dots are a subclass of nanomaterial that have
size-dependent optical and electronic properties. 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 Sensor, Electronics and Display markets.
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 display
applications. Nanoco's HEATWAVE™ quantum dots can be tuned to absorb light
at different wavelengths across the near-infrared spectrum, rendering them
useful for applications including cameras and image sensors.
Nanoco is listed on the Main Market of the London Stock Exchange, holds the
LSE's Green Economy Mark, and trades under the ticker symbol NANO. For further
information please visit: www.nanocotechnologies.com
(http://www.nanocotechnologies.com)
Business Review
Overview - A fully funded business with commercial traction and exciting
growth opportunities
The key highlight of the six months to 31 January 2024 and indeed the last ten
years or more, was the fulfilment of the first ever commercial production
orders for two of our first generation materials for use in infra-red sensing
applications. In addition, both STMicroelectronics and our Asian Chemical
customer signed multi-year development agreements for higher performing second
generation materials, also for use in sensing applications (cameras and
imagers).
Having spent five years fighting for financial survival, we have now been able
to make some cautious but important strategic investments in new capabilities
and our resilience as a supply chain partner, while increasing the team to
around 50 staff, just over half the figure from 2018.
First commercial production order in Company's 20 year history fulfilled for
sensing application
Sensing
In November, we fulfilled our first ever commercial production orders for two
different products from our first generation materials. This milestone and the
status of our direct customer is a clear endorsement of our technology. We
expect further orders to be fulfilled during this calendar year, depending on
end user adoption and demand. The wide range of potential end use applications
for our materials reflects a key strength of our materials and the
underpinning IP - they are a 'platform technology' that is applicable to a
wide range of markets, applications and form factors.
During H1 FY24, we signed a two-year joint development agreement with
STMicroelectronics. This is for the optimisation of a second generation of
sensing material that has different performance characteristics which will
allow its use in previously inaccessible applications such as automotive. We
continue to achieve all development milestones and will be expanding our range
of services to include device development work when our new facility is fully
commissioned during H2 FY24.
We also signed a two-year programme with our Asian chemical customer,
following on from the successful delivery of a number of smaller consecutive
projects over a two-year period. This programme is also for the development of
a different second generation sensing material.
During the Period, the Group completed two small but important projects that
were part funded by Innovate UK, the UK's innovation agency. One of those
projects was targeting a third generation sensing material with the potential
for even more advanced performance. The second of these projects concerns the
creation of novel nanomaterials that are potentially applicable in the field
of quantum computing. Discussions are ongoing regarding further investment in
these areas.
Display
We continue to pursue small scale development projects with a number of
customers in display markets, covering film opportunities as well as the
emerging market interest in micro-LED. We are working to leverage our
validated IP portfolio to deliver commercial engagement and contracts for the
supply of R&D services and materials for the display market. As reported
previously, we also work on a reactive basis to opportunities in adjacent
markets such as horticultural and lighting applications.
Operations
During the period, Nanoco has invested in its infrastructure and capabilities.
This includes increasing our Runcorn operational footprint by approximately
50%. This new space will be dedicated to a Fab for the testing and development
of devices incorporating our nanomaterials to accelerate product development
and support engagement with new and existing customers. The extensive
equipment for this facility arrived from overseas locations in early March.
Our new device team has been recruited and will join the business over the
coming months with their initial focus on supporting the commissioning of this
equipment in the new facility.
We are also investing in our quality control and analytical capabilities,
which has the benefit of improving the data we can capture, but also reduces
our reliance on outsourced and costly services.
IP Licensing
As previously stated, our primary goals for Nanoco are the delivery of
development, scale up and commercial production of nanomaterials. Our IP
portfolio is primarily used to support those objectives. However, we will also
continue our efforts to agree appropriate licensing of our technology and IP
where other commercial engagement may not be possible or appropriate. The fact
that Samsung felt the need to agree a licence over Nanoco IP despite having
access to a number of other large quantum dot IP portfolios reinforces this
point.
While the opportunities for licensing in display markets is currently
relatively small due to the dominance of Samsung, we expect this to grow over
time as more devices and market participants adopt quantum dot technology. We
are ring-fencing a significant sum from the retained funds from the Samsung
litigation to support our efforts to generate value in the medium term and to
continue to defend our IP as required.
Board
In December 2023 we were pleased to announce the appointment to the Board of
Dr Jalal Bagherli and Dieter May as new independent non-executive directors,
both bringing significant semi-conductor markets experience. Dieter has now
joined the Board and Jalal will join us in April 2024. In line with good
corporate governance, our Chairman, Dr Christopher Richards, has indicated
that he will stand down from the Board at the next AGM following nine years of
service. A search for a new Chairman will be led by the Senior Independent
Director and the process will start soon.
Outlook - steady growth on a firm foundation
Market forecasts for infra-red sensors 4 (#_ftn4) and quantum dot-based
display 5 (#_ftn5) technologies show strong growth over the next five years.
This will create a positive environment in which Nanoco's unique cadmium free
quantum dots and other novel nanomaterials can leverage their strong
performance characteristics into large mass produced commercial applications.
The continued investment and development of future generations of sensing
materials is a necessary part of managing our product lifecycle to deliver
value over an extended period of time. The environmental benefits of our
cadmium free products should further add to the appeal of Nanoco materials.
We are pleased to be returning £33.0 million of value to shareholders and to
have retained funds for the compelling use cases we set out in our recent
circular. The retained funds will accelerate our development plans and
commercial progress, as well as allowing us to self-fund IP licensing efforts.
The combination of a fully funded business with commercial traction is a
strong foundation on which to build.
Brian Tenner
Chief Executive
Officer
27 March 2024
Financial review
Revenue
Reported revenue in the Period increased 153% to £4.0m (H1 FY23: £1.6m). The
majority of revenue and its net increase relates to recurring licence revenue,
prepaid as part of the litigation settlement.
Sources of revenue H1 FY24 H1 FY23 FY23
£m £m £m
Services 0.6 / 13.8% 1.1 / 70.5% 1.7 / 30.0%
Material sales 0.3 / 8.6% 0.4 / 26.2% 0.8 / 15.4%
Licences 3.1 / 77.6% 0.1 / 3.3% 3.1 / 54.6%
Total revenue 4.0 /100.0% 1.6 /100.0% 5.6 /100.0%
Excluding the licence revenue, services continue as the major revenue driver,
generated primarily from two new development agreements signed in the period.
The decrease on H1 FY23 was due to a timing difference between the completion
of the previous development agreements and the negotiation and start of the
new contracts. Material sales represents shipments of nanomaterials to supply
chain partners in sensing and display markets, including shipments under the
first commercial production orders.
Operating expenses
Operating expenses comprise R&D and administrative expenses. Gross
investment in R&D to support the ongoing development of our nanomaterials
was £0.8m in the Period (H1 FY23: £0.5m) and administrative expenses were
£3.0m (H1 FY23: £2.7m). Following the Samsung settlement in FY23, we have
invested in both additional staff and facilities to position the Company for
future growth.
Other operating income in the Period was £2.6m (H1 FY23: £0.1m). The
significant increase reflects the recognition of an unrealised gain of £2.5m
on a foreign exchange hedge that was marked-to-market value at the period-end.
During the Period the group took out a one-off hedge at a rate of GBP1:USD1.22
against the second tranche of proceeds from the Samsung agreements totalling
$71.75m. Although the cash was received prior to the end of the Period, the
hedge did not mature until afterwards and hence is reported as unrealised at
the period end.
Operating profit and adjusted EBITDA
The higher revenue in the Period directly impacted adjusted operating profit
in the Period, increasing to £0.2m, an improvement of £1.6m. Adjusted EBITDA
in the Period improved to £0.7m.
H1 FY24 H1 FY23 FY23
£m £m £m
Operating profit/(loss) 2.4 (2.1) 15.0
Settled litigation costs _ 0.1 49.3
Profit on sale of IP _ _ (68.7)
Requisitioned general meeting _ _ 0.5
Fair value gain on derivative financial instrument (2.5) _ _
Foreign exchange (0.2) _ 1.7
Share-based payment charge 0.5 0.5 1.0
Employers NI on SBP 0.0 0.1 (0.2)
Adjusted operating profit/(loss) 0.2 (1.4) (1.4)
Depreciation 0.4 0.2 0.6
Amortisation 0.1 0.1 0.3
Impairment 0.0 0.0 0.1
Adjusted EBITDA/(LBITDA) 0.7 (1.1) (0.4)
Management monitor adjusted EBITDA as an Alternative Performance Measure. The
non-cash charges for share-based payments (including the associated national
insurance charges), depreciation and amortisation are added back to the
operating result to arrive at Adjusted EBTIDA. One off cash litigation costs,
as well as the one off non-cash profit on revaluing the foreign currency hedge
are also excluded from adjusted EBITDA. These items are excluded to provide
users of the accounts with a clearer understanding of underlying business
performance.
Taxation
The Group incurred a one-off tax charge in FY23 as the profits exceeded the
restriction on the use of brought forward losses leaving a tax payable of
£0.8m. A deferred tax asset for brought forward losses expected to be
utilised in future years was recognised in FY23 and remains at the period end.
The Korean withholding tax on the Samsung licence agreement creates a UK tax
asset of £4.6m which can be offset against future tax liabilities (£0.3m of
which has been charged against current period profits).
Net result
The profit after tax for H1 FY24 was £1.8m (H1 FY23: loss of £2.1m).
Earnings per share
The basic earnings per share was 0.54 pence per share (H1 FY23: loss of 0.64
pence). As at 31 January 2024 there were 324,430,950 ordinary shares in issue
(31 July 2023: 322,445,744) including treasury shares.
Cash position and liquidity
Following the receipt of the consideration for the Samsung agreements, the
Group had a cash balance at the end of the Period of £59.3m (2023: £6.0m).
Accounting rules mean that the $US balance is not translated using the hedged
rate but at period end rates. If the hedged rate had been used the period end
balance would have been £61.8 million. The hedge became effective in February
2024 and the £2.5 million gain crystallised as cash during the same month.
Expenditure on fixed assets has been increased as the Group invests in new
analytical and device capabilities.
Working capital
The Group is maintaining its investment in working capital. This is to ensure
that the Group is seen as a robust part of the supply chain by its major
customers. Our contracts with customers also include mechanisms to give Nanoco
advance notice of significant changes in demand that should be adequate to
ensure that Nanoco has appropriate raw materials on hand when production needs
to be ramped up.
Principal risks
The Directors have considered the principal risks which may have a material
impact on the Group's performance. The majority of applicable risks throughout
the Period remained materially unchanged as disclosed on pages 34 to 35 of the
2023 Annual Report and Accounts.
Going concern
The interim condensed consolidated financial statements have been prepared on
a going concern basis. In determining the appropriate basis of preparation of
the financial statements, the Directors are required to consider whether the
Group can continue in operational existence for the foreseeable future.
For the purposes of assessing whether 'going concern' is an appropriate basis
for preparing the interim condensed consolidated financial statements, the
Directors have used their detailed forecasts for the period to 31 July 2027
(the "Forecast Period"). These reflect current and expected business
activities as well as the matters set out in the section above on Principal
risks.
A sensitivity analysis has been performed to reflect a possible downside
scenario that only includes already contracted revenues for the Forecast
Period.
On the basis of the information above and having made appropriate enquiries,
at the time of approving the interim condensed consolidated financial
statements, the Directors have a reasonable expectation that the Company has
access to adequate resources to continue in operational existence for the
foreseeable future, at least 12 months from the date of the issue of these
interim condensed consolidated financial statements.
Accordingly, they continue to adopt the going concern basis in preparing the
interim condensed consolidated financial statements. The financial statements
do not reflect any adjustments that would be required to be made if they were
prepared on a basis other than the going concern basis.
Liam Gray
Chief Financial Officer
27 March 2024
Responsibility statement
The Directors of Nanoco Group plc, as listed on pages 46 and 47 of the 2023
Annual Report and Accounts, and Dieter May as notified via RNS on 21 December
2023, confirm to the best of their knowledge:
a) the interim condensed consolidated financial statements have been
prepared in accordance with International Accounting Standard 34 Interim
Financial Reporting, as required by paragraph 4.2.4 of the Disclosure Guidance
and Transparency Rules ("DTR");
b) the interim condensed consolidated financial statements, which have
been prepared in accordance with the applicable set of accounting standards,
give a true and fair view of the assets, liabilities, financial position and
profit or loss of the issuer, or the undertakings included in the
consolidation as a whole as required by DTR 4.2.10;
c) the interim management report includes a fair review of the
information required by DTR 4.2.7 - an indication of important events which
have occurred during the first six months of the year and a description of the
principal risks and uncertainties for the remaining six months of the year;
and
d) the interim management report includes a fair review of the
information required by DTR 4.2.8 - the disclosure of related party
transactions occurring during the first six months of the year and any changes
in related party transactions disclosed in the 2023 Annual Report and
Accounts.
By order of the Board
Liam Gray
Chief Financial Officer
27 March 2024
Condensed consolidated statement of comprehensive income
For the six months ended 31 January 2024
H1 FY24 H1 FY23 FY23
(Unaudited) (Unaudited, Restated) (Audited)
Notes £'000 £'000 £'000
Revenue 3 3,956 1,562 5,618
Cost of sales 6 (#_ftn6) (429) (495) (847)
Gross profit 3,527 1,067 4,771
Other operating income
Government grants 131 78 230
Profit on sale of IP - - 68,687
Fair value gain on derivative financial instrument 2,476 - -
Operating expenses
Research and development expenses (755) (520) (1,295)
Administrative expenses (3,009) (2,715) (57,401)
Operating profit/(loss) 2,370 (2,090) 14,992
- Before share-based payments and non-recurring items 368 (1,613) (2,915)
- Share-based payments (474) (477) (953)
- Profit on sale of IP - - 68,687
- Fair value gain on derivative financial instrument 2,476
- Litigation costs - - (49,337)
- EGM requisition - - (490)
Net finance (expense) (279) (244) (5,419)
Profit/(loss) before taxation 2,091 (2,334) 9,573
Taxation (332) 255 1,512
Profit/(loss) after tax 1,759 (2,079) 11,085
Other comprehensive income
(Loss)/profit on exchange rate translations - - -
Total comprehensive profit/(loss) for the year 1,759 (2,079) 11,085
Profit/(loss) per share:
Basic earnings / (loss) 4 0.54p (0.64)p 3.44p
Diluted earnings / (loss) 0.51p - 3.32p
The profit for the current and preceding year, and the loss for H1 FY23, arise
from the Group's continuing operations and is attributable to the equity
holders of the Parent Company.
The basic and diluted loss per share reported in H1 FY23 are the same, as the
effect of share options is anti-dilutive.
Condensed consolidated statement of changes in equity
For the six months ended 31 January 2024
Share-based
Reverse Shares
Share Share acquisition payment Merger held Accumulated
capital premium reserve reserve reserve by EBT loss Total
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
At 31 July 2022 (audited) 32,244 121,145 (77,868) 4,916 (1,242) - (74,715) 4,480
Loss for the six months to 31 January 2023 - - - - - - (2,079) (2,079)
Share-based payments - - - 477 - - - 477
At 31 January 2023 (unaudited) 32,244 121,145 (77,868) 5,393 (1,242) - (76,794) 2,878
Profit for the six months to 31 July 2023 - - - - - - 13,164 13,164
Capital reduction - (121,145) - - - - 121,145 -
Issue of capital to EBT on option exercise 199 - - (259) - (105) 60 (105)
Share-based payments - - - 476 - - - 476
At 31 July 2023 (audited) 32,443 - (77,868) 5,610 (1,242) (105) 57,575 16,413
Profit for the six months to 31 January 2024 - - - - - - 1,759 1,759
Issue of shares on option exercise - - - - - 105 - 105
Share-based payments - - - 474 - - - 474
At 31 January 2024 (unaudited) 32,443 - (77,868) 6,084 (1,242) - 59,334 18,751
Condensed consolidated statement of financial position
As at 31 January 2024
31 January 31 January 31 July
2024 2023 2023
(Unaudited) (Unaudited) (Audited)
Notes £'000 £'000 £'000
Assets
Non-current assets
Property, plant and equipment 1,302 232 304
Right of use assets 2,442 2,018 2,075
Intangible assets 903 1,470 966
Deferred tax asset 2,573 - 2,573
Foreign withholding tax receivable 4,003 - 1,756
11,223 3,720 7,674
Current assets
Inventories 451 104 308
Trade and other receivables 3,660 734 33,986
Foreign withholding tax receivable 593 - 592
Income tax asset - 254 -
Cash and cash equivalents 59,343 5,978 8,207
64,047 7,070 43,093
Total assets 75,270 10,790 50,767
Liabilities
Current liabilities
Trade and other payables (1,619) (1,625) (2,783)
Loans (4,257) - (4,004)
Lease liabilities 6 (675) (429) (456)
Income tax liability (800) - (770)
Deferred revenue 5 (5,934) (105) (6,123)
(13,285) (2,159) (14,136)
Non-current liabilities
Lease liabilities 6 (1,418) (1,617) (1,415)
Provisions (659) - (445)
Deferred revenue 5 (40,582) - (17,801)
Loans (575) (4,136) (557)
(43,234) (5,753) (20,218)
Total liabilities (56,519) (7,912) (34,354)
Net assets 18,751 2,878 16,413
Capital and reserves
Share capital 32,443 32,244 32,443
Share premium - 121,145 -
Reverse Acquisition Reserve (77,868) (77,868) (77,868)
Share-based payment reserve 6,084 5,393 5,610
Merger reserve (1,242) (1,242) (1,242)
Shares held by EBT - - (105)
Accumulated profit/(loss) 59,334 (76,794) 57,575
Total equity 18,751 2,878 16,413
Approved by the Board and authorised for issue on 27 March 2024.
Brian
Tenner
Liam Gray
Chief Executive
Officer
Chief Financial Officer
Condensed consolidated cash flow statement
For the six months ended 31 January 2024
Six months to Six months to Year to
31 January 31 January 31 July
2024 2023 2023
( )
(Unaudited) (Unaudited) Audited
£'000 £'000 £'000
Profit/(loss) before tax 2,091 (2,334) 9,573
Adjustments for:
Net finance expense 279 218 5,419
Fair value gain on derivative financial instrument (2,476) - -
(Profit) / loss on exchange rate translations (183) 4 1,747
Depreciation of tangible fixed assets 38 35 76
Depreciation of right of use asset 328 157 555
Amortisation of intangible assets 97 155 279
Profit on disposal of intangible assets - - (68,687)
Impairment of intangible assets 20 15 92
Share-based payments 474 477 953
(Profit) / loss on disposal of tangible fixed assets - - 8
Changes in working capital:
(Increase)/decrease in inventories (143) 70 (134)
Decrease in trade and other receivables 32,802 930 282
(Decrease)/increase in trade and other payables (1,060) 115 970
(Decrease)/increase in provisions - (212) (176)
Increase/(Decrease) in deferred revenue 22,592 (499) 23,320
Cash inflow/(outflow) from operating activities 54,859 (869) (25,723)
Foreign withholding tax paid (2,550) - (2,641)
Research and development tax credit received - 524 524
Net cash inflow/(outflow) from operating activities 52,309 (345) (27,840)
Cash flows from investing activities
Purchases of tangible fixed assets (1,036) (169) (305)
Purchases of intangible fixed assets (54) (24) (76)
Proceeds from sale of tangible fixed assets - - 15
Proceeds from sale of intangible fixed assets - - 34,509
Interest received 45 - 38
Net cash outflow from investing activities (1,045) (193) 34,181
Cash flows from financing activities
Proceeds from placing of ordinary share capital - - 199
Payment of lease liabilities (capital) (259) (216) (463)
Payment of lease liabilities (interest) (51) (26) (86)
Interest paid (2) (1) (4,728)
Net cash outflow from financing activities (312) (243) (5,078)
Increase / (Decrease) in cash and cash equivalents 50,952 (781) 1,263
Cash and cash equivalents at the start of the period 8,207 6,762 6,762
Effects of exchange rate changes 184 (3) 182
Cash and cash equivalents at the end of the period 59,343 5,978 8,207
Notes to the interim condensed consolidated financial statements
For the six months ended 31 January 2024
1. Corporate information
Nanoco Group plc (the "Company") has a premium listing on the Main Market of
the London Stock Exchange and is incorporated and domiciled in the UK. The
Group Interim Report and Accounts for the six months ended 31 January 2024 was
authorised for issue in accordance with a resolution by the Directors on 27
March 2024.
These interim condensed consolidated financial statements include the
financial statements of Nanoco Group plc and the entities it controls (its
subsidiaries).
These interim condensed consolidated financial statements are unaudited and do
not constitute statutory accounts of the Group as defined in section 434 of
the Companies Act 2006.
2. Accounting policies
a. Basis of preparation
These interim condensed consolidated financial statements have been prepared
in accordance with the Disclosure and Transparency Rules of the Financial
Conduct Authority, UK-adopted IAS 34 Interim Financial Reporting, using the
recognition and measurement principles of UK-adopted IFRS and have been
prepared under the historical cost convention. As required by the Disclosure
Guidance and Transparency Rules of the Financial Conduct Authority the
accounting policies adopted in these condensed consolidated financial
statements are consistent with those followed in the preparation of the
Group's Annual Report and Accounts for the year to 31 July 2023.
These interim condensed consolidated financial statements include audited
comparatives for the year to 31 July 2023. The 2023 Annual Report and
Accounts, which was prepared in accordance with UK-adopted International
Financial Reporting Standards ("IFRS"), received an unqualified audit opinion
and have been filed with the Registrar of Companies. The financial statements
of the Group for the year ended 31 July 2023 are available from the Company's
registered office, or from the website www.nanocotechnologies.com.
b. Presentation of figures
Certain figures contained in this announcement, including financial
information, have been subject to rounding adjustments. Accordingly, in some
cases, the sum or percentage change of the numbers contained in this
announcement may not conform exactly to the total figure given.
In order to more fairly represent the cost of sales of the group, we have
reclassified certain employee costs from administrative expenses to cost of
sales for the comparative period. The total impact of the reclassification is
an increase in the cost of sales of £200,000 with an equal and opposite
reduction in administrative expenses. There is no impact on the reported loss
or net assets of this reclassification.
c. Going concern
The interim condensed consolidated financial statements have been prepared on
a going concern basis as set out in the Financial Review section.
d. Use of estimates and judgements
Preparation of the interim condensed consolidated financial statements
requires management to make judgements, estimates and assumptions affecting
the application of accounting policies and the reporting of assets,
liabilities, income and expenses. Actual results may differ from these
estimates. The significant judgements made by management in applying the
Group's accounting policies and key sources of estimated uncertainty were the
same as those applied to the consolidated financial statements for the year
ended 31 July 2023. These are summarised below:
Estimates Judgements
Period over which to amortise Samsung licence Revenue recognition
Equity-settled share-based payments Impairment of intellectual property
Deferred tax Capitalisation (or not) of research and development expenditure
Going concern
3. Segmental information
Operating segments
At 31 January 2024 and 2023, the Group operated as one segment, being the
research, development and manufacture of products and services based on high
performance nanoparticles. This is the level at which operating results are
reviewed by the chief operating decision maker (i.e. the Board) to make
decisions about resources, and for which financial information is available.
All revenues have been generated from continuing operations and are from
external customers.
Six months to Six months to Year to
31 January 31 January 31 July
2024 2023 2023
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Analysis of revenue - by type
Products sold 341 409 867
Rendering of services 544 1,101 1,685
Licences 3,071 52 3,066
3,956 1,562 5,618
There was a material customer who generated product and service revenue of
£575,000 (2023: one material customer amounting to £1,215,000). £3,028,000
of the licence revenue related to the Samsung licence (2023: nil)
The Group operates in a number of countries across the world, although all are
managed in the UK. The Group's revenue per country based on the customer's
location is as follows:
Six months to Six months to Year to
31 January 31 January 31 July
2024 2023 2023
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Analysis of revenue - by geography
South Korea 3,028 - 2,963
Netherlands 307 954 1,423
Japan 292 286 447
France 267 114 385
Taiwan 43 165 323
USA 17 34 59
Belgium 2 - -
Canada - 9 9
Poland - - 8
UK - - 1
3,956 1,562 5,618
All the Group's assets are held in the UK and all of its capital expenditure
arises in the UK. The profit before taxation and attributable to the single
segment was £2,091,000 (2023: £2,334,000 loss).
4. Earnings per share
Six months to Six months to Year to
31 January 31 January 31 July
2024 2023 2023
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Profit/(loss) for the period attributable to equity shareholders 1,759 (2,079) 11,085
Share-based payments 474 477 953
Profit/(loss) for the period before share-based payments (1,602) 12,038
2,233
Weighted average number of shares No. No. No.
Ordinary shares in issue 324,430,950 322,445,744 322,472,939
Options exercisable at the reporting date 1,134,244 - 195,000
Options not yet exercisable at the reporting date 19,727,115 - 11,720,600
Diluted weighted average number of shares 345,292,309 - 334,388,539
Adjusted profit/(loss) per share before share-based payments (pence) 0.69 (0.50) 3.73
Basic profit/(loss) per share (pence) 0.54 (0.64) 3.44
Diluted adjusted profit/(loss) per share before share-based payments (pence) 0.65 - 3.60
Diluted profit/(loss) per share (pence) 0.51 - 3.32
Diluted loss per share is not presented for the 6 months to January 2023 as
the effect of share options issued is anti-dilutive. The adjusted loss is
presented as the Board measures underlying business performance which excludes
non-cash IFRS2 charges.
5. Deferred revenue
31 January 31 January 31 July
2024 2023 2023
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Current
Upfront licence fees 5,931 95 6,123
Milestone Payments 3 10 -
Total current 5,934 105 6,123
Non-current
Upfront licence fees 40,582 - 17,801
Total non-current 40,582 - 17,801
Total deferred revenue 46,516 105 23,924
Deferred revenue arises under IFRS where upfront licence fees are accounted
for on a straight-line basis over the initial term of the contract or where
performance criteria have not been satisfied in the accounting period.
6. Lease liabilities
Six months to Six months to Year to
31 January 31 January 31 July
2024 2023 2023
(Unaudited) (Unaudited) (Audited)
£'000 £'000 £'000
Current
Property Leases 662 429 448
Equipment leases 13 - 8
Non-current
Property Leases 1,407 1,617 1,399
Equipment leases 11 - 16
Total lease liabilities 2,093 2,046 1,871
7. Post Balance Sheet Event
In February 2024, Nanoco fully utilised its open forward currency hedge to
retranslate the USD receipts from Samsung into GBP.
Nanoco also announced the mechanism for its return of capital, in which up to
£30.0 million will be returned to shareholders through a tender offer, and
this will be voted on at a general meeting of the Company on 28 March 2024. In
addition, up to £3.0 million will be used for an on-market buyback.
In addition, post period end, Nanoco repaid the loan notes outstanding to the
University of Manchester (£0.6m).
- Ends -
1 Yole
2 IBI
3 Consensus Revenue £8.5 million, consensus Adj EBITDA £1.4 million,
consensus Adj PBT £0.4 million (Cavendish and Edison).
4 Yole
5 IBI
6 The comparative balances for cost of sales and research and development
expenses have been restated for the six months ended 31 January 2023. Refer to
note 2b of the accounting policies for more information. The restatement has
no impact on the reported loss or net assets.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR UNSARSNUOUURRecent news on Nanoco
See all newsREG - Nanoco Group PLC - Transaction in Own Shares and Total Voting Rights
AnnouncementREG - Nanoco Group PLC - Transaction in Own Shares and Total Voting Rights
AnnouncementREG - Nanoco Group PLC - Transaction in Own Shares and Total Voting Rights
AnnouncementREG - Nanoco Group PLC - Transaction in Own Shares and Total Voting Rights
AnnouncementREG - Nanoco Group PLC - TR-1: Notification of Major Holdings
Announcement