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Ilika plc

Ilika Plc in line to meet 100% growth in materials development revenue + Zeus Comments

Ilika Plc (LON:IKA), a pioneer in materials innovation and solid-state battery technology, announced today a trading update for the six months ended 31 October 2016.

The Company remains focused on developing and licensing its solid state battery Intellectual Property in line with its roadmap. Commercialisation activity increased in the period and Ilika has continued to deploy the majority of its operational resource on its battery development programme, whilst the materials development programmes in its portfolio have also progressed to plan. The major materials development programmes in the period have been plasmonic lenses with Seagate and aerospace alloys, in collaboration with partners including Rolls Royce, GKN and BAE Systems.

The financial results are expected to show total revenue for the period of £330k (H1 2015: £254k) and an operating loss for the period, excluding share based payment charge, of around £1.9m (H1 2015: £1.8m). As a result of the placing in October, cash and cash equivalents at the period end were £7.1m (H1 2015: £4.5m).

The Company will announce half-year results for the six months ended 31 October 2016 on 9 January 2017.

Post period end events

The Company has received notifications of intent to award three new grants, two of which involve solid state battery integration programmes, amounting to an aggregate revenue value to the Company of £1.4m over two years. All three programmes are expected to start in this current financial year and will be carried out in partnership with globally-recognised OEMs. In addition, Ilika has received a notification of intent to award a commercially-funded materials development programme from an existing customer to a value of around $1m over 12 months. This is also expected to start in this current financial year. Further announcements regarding these programmes will be made in due course.

Patent update

The Company has received Notices of Allowance in the US in respect of two patent applications covering its vapour deposition process for solid state battery materials and also, metal oxide supports for fuel cell catalysts.

Graeme Purdy, CEO of Ilika Plc, commented: “The intensive commercial discussions we have had with partners in the first half of the year are maturing and we are making progress with the implementation of our licensing model. We are seeing the expected upturn in development revenues and commencing these new programmes within the timelines expected, will ensure the Company meets analyst expectations for the 100% growth in materials development revenue relative to last year.”

Zeus Capital thoughts:

Positive trading update including £1.4m of post-period solid-state battery grants

Ilika released a positive trading statement this morning for the period to October 2016 ahead of its FY17 interim results, scheduled to be announced on January 7th 2017. Excellent post-period events include the intent to award Ilika 3 solid-state battery development grants aggregating £1.4m, and a likely $1m materials development contract from an existing blue-chip OEM customer. The OEM development contract is in a non-battery application area, and demonstrates that as well as its focus on solid-state battery commercialization, Ilika’s core commercial materials development engine across a number of high-tech sub-sectors continues to function well. Ilika expects all these programs to begin before the full year end in April, and we leave our forecasts unchanged.

  • Solid-state battery commercialisation is on track. Over the first half of the year, Ilika management has been engaged in intensive discussions with a number of potential OEM partners for commercialisation of its state-of-the-art solid-sate battery technology. These negotiations are maturing, and the company is confident of implementing its solid-sate battery technology licensing model.

Fundraise provides balance sheet strength ahead of commercial negotiations with existing and potential OEM partners. The £6.3m equity fundraise completed in October by Ilika provides the necessary balance sheet strength at a key stage of the company’s commercialisation journey. It allows management to optimise value for the company and its shareholders as it continues important negotiations of full commercial terms with its OEM customers and partners