For-sale Runcorn nano-material firm Nanoco Group plc said on Wednesday its revenue increased 40% to £7.9 million in the year ended July 31, 2024, with adjusted EBITDA improving to £1.2 million.
Nanoco said its revenue increase was driven by licence income from Samsung. Excluding Samsung licence income, revenue declined by 29% “due primarily to timing differences in the start and end of a number of development projects.”
The firm made a net loss of £1.3 million.
Nanoco recently appointed Dmitry Shashkov as chief executive officer and put its trading business and intellectual property up for sale after the loss of a major customer prompted a strategic review.
The company, which develops and makes cadmium-free quantum dots used in sensors, said in October it appointed CDX Advisors LLC to “review the options for the company’s business and assets, including the potential for a sale of the trading business,” including its intellectual property.
On Wednesday, Nanoco chairman Christopher Richards wrote: “Ahead of the Annual General Meeting to be held in January 2025, the company has received a requisition from The Milkwood Fund to appoint two of their representatives to the Nanoco Board of Directors.
“This general meeting is to be held at 11.30 am on 13 December 2024, and further details are included on the Nanoco website. The Nanoco Board do not believe this is in the interest of all shareholders, and firmly believe shareholders should vote against both resolutions.
“It is a point of deep frustration that we find ourselves once again having to defend shareholders’ cash against an activist acting in their own interests.”
In his outlook, Richards wrote: “A balance needs to be struck, in the interests of all of its shareholders, between supporting this growth and prudence with regard to risk, to preserve cash and to take a highly disciplined approach to investment.
“We concluded that it is in the group’s best interests to appoint CDX Advisors to review the options for the group’s trading business, IP and other assets, including the potential for a sale of these assets.
“While this process will be undertaken at pace, the group’s considerable financial resources mean that the trading business will continue to be supported to grow and not compromise its potential.”
On Wednesday, Nanoco said Richards will retire as non-executive chairman at the AGM in January and will be succeeded by Jalal Bagherli “bringing his commercial expertise and track record to the leadership of the board.”
The firm said: “Cash will be progressively returned to shareholders as the CDX process progresses and the board gains more certainty on the execution of a potential sale process and clarity in the group’s working capital requirements and the surplus nature of the group’s cash balance.”
CEO Shashkov said: “I joined Nanoco because I saw an organisation with unique IP and inherent value to be realised. Having only been here a short time, my confidence in the value in this business has only been reinforced.
“We have a clear strategy to address our two core markets of Display and Sensing, along with working to define the opportunities outside of these.
“We have restructured the organisation to minimise cash burn and focus on commercial growth, reducing our gross annual cost base to around £6 million. In tandem, we are engaged with CDX to identify and pursue external investors for our operating business.
“Taken together, there is a clear opportunity to maximise value in the trading business and deliver returns to shareholders.”
Chairman Richards added: “Nanoco is strongly positioned to take advantage of developing markets. We have delivered all development milestones for our sensing customers, and whilst the cancellation of the JDA with the European customer post year end was disappointing, we continue to engage with a variety of customers in a number of different markets.
“The board is determined to deliver shareholder value as rapidly as possible. In light of the plans set out to shareholders, the board has committed to a return of surplus cash to shareholders during the course of FY25.
“Cash will be progressively returned to shareholders as the CDX process progresses and the board gains more certainty on the execution of a potential sale process and clarity in the group’s working capital requirements and the surplus nature of the group’s cash balance.
“We returned £30m to shareholders through the tender process, and post year end completed the additional £3m share buyback program.
“We have increased the industry expertise of the board, with two non-executive appointments during the year, and post year end we have appointed Dmitry Shashkov as CEO.
“As a board we are committed to achieving the best value for shareholders, and the whole team is committed to making Nanoco a highly successful nanomaterials group.”