Nanoco Group turns a profit as it gains first commercial orders

British technology pioneer Nanoco Group posted an operating profit in the first half of the year after receiving its very first commercial production orders.

The University of Manchester spin-off made an operating profit of £2.4 million in the six months ended January, compared with a loss of £2.1 million in the same period last year.

In November, the Runcorn-based company fulfilled orders for two first-generation materials for use in infrared sensing applications in electronic devices such as cameras and image sensors.

Nanoco also signed agreements with STMicroelectronics and an Asian chemical company for work on “higher-performing” second-generation materials.

As a result, licensing revenue rose from just £52,000 to £3.1 million, offsetting a decline in underlying revenue caused by the timing between the completion of previous development deals and the start of new contracts.

The group further benefited from a £2.5 million foreign exchange gain related to an intellectual property settlement with Samsung.

Nanoco began filing a lawsuit against the South Korean conglomerate in 2020, claiming its quantum dot technology was used without permission in the company’s LED televisions.

The case was resolved in February last year when Samsung agreed to pay the company $150m (£123m) in two tranches.

After receiving a second tranche worth $71.75 million, the company has decided to hand over £33 million to shareholders through an offer and share buyback arrangement.

The rest will be used to invest in “operational capacity, improving future growth prospects and improving gross margins.”

Brian Tenner, CEO of Nanoco, said: “After five years of fighting for financial survival, we have now been able to make some prudent but important strategic investments in new capabilities and our resilience as a supply chain partner.

“These will accelerate our development plans and commercial progress, and allow us to self-fund our IP licensing efforts.”

Tenner and the rest of Nanoco’s board survived an attempted ouster last summer by a small group of investors unhappy with the way they handled the dispute with Samsung.

After proxy advisors Glass Lewis and Institutional Shareholder Services said they supported the board, more than 80 percent of Nanoco investors voted against all 12 resolutions tabled at a general meeting.

Nanoco Group shares were down 0.45 percent as of 10:1 p.m. Wednesday morning, but have grown about 28 percent over the past six months.