The key performance indicators that we use to monitor our business are as follows.
Year-end cash and burn rate
Measurement
Reconciled bank balances including committed but not yet cleared receipts and payments.
Why it is important
Historically the business operated on a cash consuming basis and this KPI indicates the duration of funding visibility.
Strategy link
1. Growth
2. Investment
What it means
In combination with the Group’s operating plans and budgets, the current balance underpins the Directors’ going concern and viability statements.
Revenue
Measurement
The value of goods and services recognised as income in accordance with IFRS 15 Revenue Recognition.
Why it is important
Revenue (and its change year on year) shows the speed with which the business is growing.
Strategy link
1. Growth
What it means
In combination with gross margins and reducing overheads it shows that the Group moved closer to a breakeven position in FY21.
Loss after tax
Measurement
The statutory result after deducting all costs and tax from our revenue.
Why it is important
Achieving a profit after tax is a critical medium-term goal as it would significantly reduce the key risk of running out of cash before realising the Group’s full potential.
Strategy link
1. Growth
What it means
The Group’s loss after tax narrowed significantly in the year.
Billings
Measurement
The value of invoices raised during the year for goods and services delivered or to be delivered to customers (excluding VAT).
Why it is important
If billings exceed revenue, it indicates a business that is growing. Billings are also a better indicator of cash flow than revenue which can be influenced by non-cash accounting estimates and judgements.
Strategy link
1. Growth
What it means
Billings are largely following the revenue profile.
Investment in R&D
Measurement
The sum of all costs incurred in research and development activities. This includes salary costs and other direct R&D costs.
Why it is important
Nanoco prides itself on the scale and quality of our R&D efforts – which feed our IP portfolio and also commercial opportunity pipeline as we develop new materials for potential new markets and applications.
Strategy link
2. Investment
3. Licensing
What it means
We continue to invest in our core R&D activities. Indeed during the year, we pivoted some resource away from downstream application work back to enhancing the quality of our materials.
Portfolio of patents and patents pending
Measurement
The Group’s IP lawyers report monthly on patents granted or filed in the respective patent offices in various countries.
Why it is important
Our IP portfolio is a key strength of the Group and a strong reason to invest in Nanoco.
Strategy link
2. Investment
3. Licencing
What it means
Our IP portfolio is being closely monitored to ensure we are focussing on short to medium term commercial opportunities.
