Nanoco lowers guidance after loss of key European customer

Nanoco, a pioneer in small-cap technology, has cut its revenue forecast for this year after losing a key European customer.

The University of Manchester spin-off told investors on Friday it does not expect further orders for its first-generation technology from an unnamed European customer, which has also filed a notification for a two-year joint development agreement for second-generation products.

As a result, the company expects revenue for the 12 months to July 31, 2025 to be approximately 25 percent lower than the current market consensus of £9.5 million.

Nanoco shares were down more than 30 per cent in early trading to 9.34p, meaning they have lost around half their value since the start of the year.

Nanoco said the decision was “not a result of concerns about the performance” of its products, but rather reflected the customer’s “own strategic priorities.”

It added: ‘The group will negotiate with the European client the terms for the end of the project.

Nanoco will focus, among other things, on removing all obstacles that stand in the way of the direct capture of already identified small-scale market opportunities.

‘These opportunities lie in sectors such as industry, defense, agriculture, safety and surveillance, healthcare and the automotive industry.’

Nanoco, headquartered in Runcorn, makes cadmium-free quantum dot (QD) technology. QDs are tiny particles, around 10 to 50 atoms in diameter – about 1/1000th the width of a human hair – that are able to absorb or emit light of a specific predetermined wavelength.

Nanotechnology is complex, but it is an essential part of the modern world. It is used in the production of high-tech consumer devices such as televisions and smartphones, but also in medicine and industry.

The QD and QD displays market is predicted to reach $13.1 billion by 2030.

Nanoco last year received a $150 million settlement after a protracted legal dispute with tech giant Samsung, which it alleged stole its unique patented techniques to create the tiny specialty semiconductors. Samsung denies the claims.

Outgoing CEO Brian Tenner told This is Money earlier this year that the group had taken a new direction following the settlement and that the group was in the strongest commercial and financial position in its history.

It followed Nanoco’s first major commercial production order for two first-generation materials for use in infrared sensing applications in electronic devices.

Nanoco had also entered into development partnerships with STMicro, a leading supplier of sensors for the smartphone market, and a “major Asian chemical customer.”

Tenner, who announced last month that he would leave once a replacement was found, was the target of an attempted shareholder revolt calling for his resignation after the size of the settlement with Samsung disappointed some investors.

Christopher Richards, non-executive chairman of Nanoco, said the loss of the European customer was “obviously disappointing” but “reflects the nature of the supply chains for advanced technology consumer electronics”.

He added: ‘In the short to medium term there are smaller scale opportunities for this technology and we aim to approach these niche markets directly and in partnership with other companies.

‘We also continue to collaborate with our Asian customer on the development of our second generation sensor materials, with commercial potential in the medium term.

“The Group’s strong balance sheet provides us with the financial stability to continue this development work and our new business development activities.”