Nanoco cuts forecasts after losing key European customer

Small-cap technology pioneer Nanoco has cut its revenue forecast for the year after losing a key European client.

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

As a result, it expects sales for the 12 months to 31 July 2025 to be around 25 per cent below the current market consensus of £9.5m.

Nanoco shares fell more than 30 percent to 9.34 pence in early trading, meaning they have lost roughly 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 and instead reflected the client’s “own strategic priorities.”

He added: ‘The group will negotiate the final terms of the project with the European client.

‘Among other things, Nanoco will seek to remove any obstacles to its direct pursuit of already identified small-scale market opportunities.

‘These opportunities include sectors such as industry, defence, agriculture, security and surveillance, healthcare and the automotive industry.’

Runcorn-based Nanoco makes cadmium-free quantum dot (QD) technology. QDs are tiny particles, roughly 10-50 atoms in diameter (about 1/1000 the width of a human hair), that are capable of absorbing or emitting light of a specific, predetermined wavelength.

Nanotechnology is complex, but it is an essential component of the modern world and is used in the manufacture of high-tech household appliances such as televisions and smartphones, as well as in medicine and industry.

The QD and QD display market is forecast to be worth $13.1 billion by 2030.

Last year, Nanoco received a $150 million settlement after a long-running legal dispute with tech giant Samsung, which it accused of stealing its patented techniques for creating the tiny, specialized semiconductors. Samsung denies the allegations.

Outgoing chief executive Brian Tenner told This is Money earlier this year that the group had taken a step forward following the deal and was in its strongest commercial and financial position ever.

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

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

Tenner, who last month announced his intention to leave once a replacement is found, had been the target of an attempted shareholder rebellion calling for his removal after the size of the Samsung deal disappointed some investors.

Nanoco non-executive chairman Christopher Richards said that while the loss of the European customer was “obviously disappointing”, it “reflects the nature of high-tech supply chains for consumer electronics”.

He added: ‘There are smaller-scale opportunities for this technology in the short to medium term and our aim is to address those niche markets directly and in partnership with other companies.

‘We are also continuing to work with our Asian customer on the development of our second-generation detection 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.”