Year End Trading Update

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 provides the following trading update for the financial year ending 31 July 2024 ('FY24').

Operational overview

• The Group continues to deliver all milestones in its two-year Joint Development Agreements (JDAs) for second generation sensing materials with ST Microelectronics and the Asian chemical company.
• The new Device Fab is now fully operational and sample devices have been shipped.
• Following customer dialogue, the Group no longer expects to receive a further production order for its validated first generation sensing products during FY24.
• The Group is working with its customer to understand the range of possible outcomes and any potential impact on Nanoco beyond the end of the financial year. The Group expects to issue a further update with the full year results in October.
• The Group continues with some small-scale commercial engagements for customers interested in display materials, although no new anchor customer has been signed at this time.
• The Group continues to commit retained funds to expand our business development activities as set out in our planned use of retained funds.

Financial overview

• As a result of the delayed receipt of the second production orders noted above, full year revenue is expected to be marginally below consensus forecasts.1
• The impact of the reduction in revenue alongside some small one-off increases in overheads means Adjusted EBITDA is likely to be towards the lower end of the range of market forecasts2, subject to the results of the year-end audit.
• The impact of the delayed demand noted above on the Group's aim of becoming cash breakeven during CY25 will depend on the duration of that delay and subsequent speed of ramp up in demand for our technology.
• The Group still expects its cash reserves to be approximately £20.0m on 31 July 2024.
• The Group remains committed to completing the return of capital through its £3.0m broker managed share buy back programme with £1.3m having been returned to date.

1The consensus revenue forecast is £8.35m, being the average of forecasts from Cavendish and Edison.

2Adjusted EBITDA analyst forecasts range from £0.5m to £1.5m.The Group expects to announce its full year results on 22 October 2024.

Brian Tenner, Chief Executive Officer of Nanoco, said:

"We continue to work hard across a range of products, customers and market sectors to deliver the adoption of quantum dot technology. The number of potential applications continues to grow strongly. The majority of our income generating staff remain engaged in paid for development work on new products in sensing and display applications. By investing across a broad range of business development opportunities, we aim to further reduce any dependency on a single customer and to deliver increases in shareholder value in the medium term."