Nanotechnology designer Nanoco (NANO:AIM) has put itself up for sale, a move that will ultimately end a sad decade on the stock market in which the University of Manchester spin-out consistently failed to make its cadmium-free quantum dot technology profitable.
The company said today that it had entered ‘preliminary discussions with certain parties about a potential sale of the company’, and has appointed financial advisor Evercore to help with a sale of the business.
The upbeat rhetoric remains, Nanoco talking today about ‘active discussions with existing and other potential new customers’ for its materials and services with a ‘particular focus on the display and infra-red sensing markets,’ the company said.
‘In addition to these potentially lucrative commercial opportunities for continued funding of the company's operations, the board is also reviewing other sources of funding.’
Shares in the £46m company rallied more than 7% on the news to 16.1p, yet this will be scant consolation for loyal investors that have seen hopes of potentially huge profits fade away.
The shares had traded as high as 189p in December 2013, valuing the business then at nearly £550m.
GROWTH AND PROFIT STUBBORNLY ABSENT
Three years ago analysts at broker Peel Hunt had forecast adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) and pre-tax profit of £17.1m and £15.9m respectively in 2019, on £43m of revenue.
At the start of 2019 the same broker had slashed revenues estimates to just £7m, and EBITDA losses of £4.5m. Yet its analysts still remains bullish, forecasting £2m EBITDA on £21.5m revenue by 2021.
‘The company's current resources give reasonable headroom for the sale process and commercial opportunities to come to successful conclusions, with contingency plans in place if needed’, said the company.
Nanoco said it currently expected indicative proposals for the company to be submitted in mid-December.
