Listed Manchester spinout company Nanoco is to cut jobs in an attempt to preserve cash as it explores a sale.
Nanoco Group plc, headquartered in Runcorn, develops and manufactures cadmium-free quantum dots and other nanomaterials. These are used in monitors, TVs and infra-red sensors.
Its board initiated a strategic review following the decision of a major European customer to change its strategic focus away from QD-enabled infra-red sensors.
The firm, which won $150 million in a legal dispute with Samsung last year, said recently that its CEO Brian Tenner (pictured) is to leave the company.
Its strategic review concluded “that it is in the company’s best interests to appoint advisers to review the options for the company’s business and assets, including the potential for a sale of the trading business (including IP)”.
Nanoco has appointed CDX Advisors as its financial adviser but said its considerable financial resources mean that growth within the trading business will continue to be supported.
It added that it is now prudent to consider if this growth and investment “would be best-led in a different ownership setting than allowed for as the sole business of a listed company”.
“The board is highly confident in the potential of the business. 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,” a notice to the London Stock Exchange continued.
“Steps are already being taken to rationalise the company’s cost base. This includes reducing headcount, reducing the size of the board during FY25 without compromising appropriate corporate governance standards, and by reducing non-critical operating costs across the group.
“Furthermore, immediately following the release of the company’s FY24 preliminary results, each of the non-executive directors will enter into agreements with the company under which they will agree to defer payment of at least 50% of their director fees until the earlier of the end of the financial year (31st July 2025) or a potential sale of the trading business.”
Once complete, these measures will reduce the group’s annualised cash cost base by £2.6m – equivalent to 34% – with a cash restructuring cost of just over £100,000, it said.
Nanoco said its board of directors continues to believe that there are significant organic commercial applications for its technology across a range of markets that will generate value for the business over time.
“Nanoco is confident that a growing number of third parties are using the company’s IP,” it stated. “As a business actually using its IP in its own operations, Nanoco is much more strongly placed to both successfully enforce that IP and also to achieve a better outcome than other non-practising entities.
“With our financial resources and experience in protecting our IP, the company is now in a stronger position to take advantage of the growing market for QD displays.”
Chris Richards, non-executive chairman of Nanoco, added: “The board is determined to deliver shareholder value as rapidly as possible.
“The board is therefore committed to a return of surplus cash to shareholders over the current financial year as and when it is prudent and advisable to do so.”
Mancunian founders win funding to take mobile commerce to TheNextLevel