Nanoco, a technology firm based in Runcorn, has announced a 25% reduction in its revenue forecast for the financial year ending July 31, 2025, following the termination of a crucial commercial partnership by a European customer.
The consensus revenue forecast for the period was initially projected at £9.5 million, based on forecasts from Cavendish and Edison. Nanoco, which specialises in developing materials for monitors, TV screens, and medical imaging technologies, stated that the customer’s decision was rooted in their strategic priorities rather than a reflection on Nanoco’s performance.
The European partner had been collaborating with Nanoco, a Manchester University spin-out, on infrared sensing applications for electronic devices. However, in July, Nanoco announced that it no longer expected further production orders for its validated first-generation sensing products for the financial year ending July 31, 2024. Subsequent discussions confirmed that no additional orders would be forthcoming, and the two-year Joint Development Agreement for second-generation sensing materials, initiated in January 2024, would also be terminated.
Nanoco affirmed that all development milestones had been met, receiving positive feedback on the performance of the new materials. The termination, they emphasised, was due to the customer’s strategic priorities. The company is now negotiating the end-of-project terms, seeking to remove any obstacles to directly pursuing identified small-scale market opportunities in sectors such as industrial, defence, agriculture, security, surveillance, healthcare, and automotive.
Following this announcement, Nanoco revised its revenue expectations for the 2025 fiscal year to approximately 25% below the consensus forecast. Despite this setback, the company continues to collaborate with an Asian customer on a Joint Development Agreement for second-generation sensing materials, with potential production orders in the medium term contingent on end-user adoption of the technology. Additionally, Nanoco is engaged in smaller-scale commercial projects and new business development activities.
Non-executive chairman Christopher Richards commented on the situation, stating, “This is obviously disappointing news and reflects the nature of high technology supply chains for consumer electronics. It is noteworthy that our customer has taken these decisions based on its own strategic priorities and not on a lack of belief in, or the performance of, Nanoco’s technology.” He added, “Smaller scale opportunities are available for this technology in the short to medium term and we aim to address those niche markets directly and in partnership with other companies. We also continue to work with our Asian customer in developing our second-generation sensing materials, with commercial potential over the medium term.” Richards also highlighted the group’s strong balance sheet, which provides financial stability to sustain development work and new business activities.
In conclusion, Nanoco’s reduction in revenue forecast underscores the challenges and volatility inherent in high technology supply chains. The company’s ongoing efforts to explore niche markets and collaborate with other partners demonstrate its resilience and adaptive strategies in a competitive sector.
