Ilika plc (LON:IKA) is the topic of conversation when Baden Hill’s Partner and Clean Tech Equity Specialist Dr Tom McColm caught up with DirectorsTalk for an exclusive interview.
Q1: Ilika announced their year-end results today, Tom what did you make of them?
A1: No surprises, they were in line with our forecast and pretty much what was expected.
We’re seeing their small battery format Stereax traction is starting to happen in the medical tech sectors and the Industrial Internet of Things. They’ve successfully completed a significant equity raise to fund production scale up and they’re basically, currently, for the next year, getting their ducks in a row for full commercialisation and profitability.
So, all pretty much as expected.
Q2: What do you see as the main challenge for the company over the next 12 months and where should be the main focus?
A2: The company, in the last 6 months, have specced and ordered a big, quite expensive, bit of production hardware that is scheduled to be delivered in calendar Q4 of this year. What they’re real key challenge and focus is getting this done, the successful delivery, installations, set up, commissioning, and bringing this thing online which will increase their Stereax production by about an order of 70 or more.
If the company executes this programme and this programme on time and budget, it will be in a very good place.
Q3: Where does the larger format Goliath program for EV applications fit in?
A3: It’s important, it’s probably the highest profile battery space and the biggest potential market so it’s important that they’re in it but it’s probably secondary for the company right now as we just talked about Stereax should be the primary focus.
Solid state lithium batteries for EV application are still quite far off, not just for Ilika but for everyone working on them. It’s fantastic that they’ve got this grant funding that covers the majority of the costs of the Goliath programme, I think about 70% of the costs.
If that changes though and the grants run out and they have to start funding it off their own balance sheet then I would think there’d be some important strategic decisions to be made at that point.
Q4: Do you think the Covid-19 pandemic has affected the business in any way?
A4: I think specifically to IKA, the affect has been pretty minimal. They kept most of their operations going, certainly Goliath kept going, I think the pilot line was actually off for a month of so but there were no big hits.
On a big picture, at sector level, COVID has definitely created a massive tailwind, the global impact of the pandemic highlighted that we’re altogether on this planet and it’s highlighted an even bigger global impact on the horizon of climate change. People are noticing that the pollution was down etc. and it’s brought that massively into focus and activity and investment right across the whole sector is reflecting that.
Q5: Just talking about the horizon, where would you like to see Ilika at this time next year?
A5: I’m hoping that they do execute that programme that we just discussed. Next year we’ve got increased Stereax production, hardware up and running at full capacity, revenues up to reflect that and first full licensing deals for Stereax getting very close or even done.
So, execute the scale up and get some deals.
