Shares of Manchester-based novel nanomaterials firm Nanoco Group plc rose about 4% on Monday after it announced it signed a “major work package” with its “important European electronics customer” that more than doubles the group’s order book year-on-year.
As a result, Nanoco said it now expects to exceed its recently increased revenue expectations for FY22.
Nanoco is a developer and manufacturer of “cadmium-free quantum dots and other specific nanomaterials” emanating from its technology platform.
Nanoco also announced a positive trading update and a sale of shares via a placing and subscription to raise £2.25 million before expenses.
“The contract delivers a monthly revenue run rate equivalent to that delivered in H1 FY22 and further underpins our cash runway to H1 CY23,” said Nanoco.
“Additionally, the working capital arrangements in the contract support Nanoco establishing a more robust supply chain of raw materials.
“As a result, the board now expects to exceed its recently increased revenue expectations for FY22.”
Nanoco shares are up about 55% for the past 12 months to around 40p to give the Manchester firm a current stock market value of about £123 million.
In its trading update, Nanoco reported that “significant trading progress has been made in terms of order book growth, new contract momentum and cost management.”
It said it remains very confident in the strength of its case in its patent litigation against Samsung “and in an outcome that is transformational for Nanoco’s prospects and shareholder value.”
Nanoco Group CEO Brian Tenner said: “This fundraise will enable Nanoco to plan confidently for the future of the organic business and to position us in the strongest possible way for the next stages of the litigation.
“It creates a cash runway that extends comfortably past both of the expected H2 value inflection points noted above and potentially through to the point when the organic business may become self-financing.
“We are at a very exciting moment in Nanoco’s evolution.
“This calendar year was set up for four major value inflection points; two in our organic business development and two more in our litigation against Samsung; two have now been successfully delivered, with the next two anticipated in our second half.
“The first of those organic value inflection points has now been delivered in the new contract with our important European electronics customer.
“It creates a significantly more stable financial environment for Nanoco’s operations and business planning and allows us to prepare better for potential commercial production orders in the short term.
“The first of the two significant hurdles in our litigation against Samsung was also recently successfully delivered.
“On 16 May 2022, the PTAB ruled emphatically in favour of Nanoco on all 47 claims in the five patents in the lawsuit.
“We will now be pressing for a lifting of the stay in the trial and are hopeful of a rescheduled trial date in Q4 CY22.
“We look forward to the second half of CY22 when we aim to deliver the other two significant value inflection points: production order visibility in the organic business and a successful outcome to the litigation trial.
“In particular, commercial production orders will be the first in our history and would quickly establish Nanoco as a fully-fledged and self-financing operating business with significant upside value to be earned in the many large and growing international markets that our materials can serve.“