Nanoco ramps up production, signs deal

Manchester-based Nanoco, which announced results from its first full year as a listed company in November, said it had achieved key milestone payments in all its joint development agreements and was readying itself for mass production of quantum dots, buying a new plant in Runcorn, Cheshire, and employing more staff.

Quantum dots are florescent nano-sized particles of semiconductor material which emit light. They are energy-efficient but their use in products such as televisions, computer and mobile displays has been hindered by price and legislation on the use of heavy metals.

“You should be able to start seeing products with our technology in the shops by the back end of next calendar year,” said Chief Executive Michael Edelman in an interview.

The company has developed a method of producing quantum dots without using heavy metals, banned from products in Europe, and that improves display colours. It is hoping to piggyback on the move towards more energy efficient LCD TVs, with TV makers using their quantum dots in LED backlighting.

The world’s number eight economy California has introduced new energy standards that require TVs to halve power consumption by 2013 after discovering that plasma TVs accounted for 10 percent of power bills, with more US states and countries expected to follow suit.

“It’s a big ask, but we expect our technology to be part of that solution,” Edelman said, with the company targeting a slice of a market expected to be worth about $1 billion by 2012.

Nanoco currently has two LED-related development deals with big Japanese electronics corporations, is in talks with Korean companies, and also has some contracts for use in LED general lighting, where its technology will help make its harsh bluish light warmer.

“Nanoco’s largest ($10m) joint development agreement is progressing as planned … Nanoco needs to deliver 1kg of red dots and 1kg of green to receive the final $4m payment under the contract. We expect the company to deliver those materials during the first half of calendar 2011,” said house broker Bank of America Merrill Lynch.

The company has also sealed a deal with Tokyo Electron which will see it developing a way of producing cheaper solar cells, helping solar power reach grid parity, where it is profitable without government subsidies.

Nanoco, which reported revenues of £2.94m ($4.7m) in the year to July 31, up from £1.99m, while its pretax loss was up to £1.37m from £0.78m as it ramped up spending. Edelman said he expected Nanoco to be profitable by the end of its 2012 financial year.

Analysts polled by Thomson Reuters I/B/E/S/ expected an average pretax loss of £1.26m, compared with a loss of £0.78m last year, with net cash of £6.6m. Revenue was seen at about £3.35m.