Ilika plc (LON:IKA) Chief Executive Officer Graeme Purdy caught up with DirectorsTalk for an exclusive interview to discuss achieving a key technology milestone, principal interest in P1 protypes, target for P2 prototypes, progress of Cirtec, and cash position.
Q1: Graeme, the update on trading was published today but on Monday Ilika issued a press release about achieving a key technology milestone. Could you just explain for us what that milestone was?
A1: It is a technology development milestone on our Goliath roadmap. Goliath are our large formats EV batteries and we’ve called that particular development point a D4 milestone, it effectively marks the start of Goliath’s productization journey.
It means that a number of the key data sets including energy density and power density have been met and we now do a design freeze and we start manufacturing batches of what we’ve called our P1 prototype which will be the first prototype cells that we issue to customers for their evaluation on our journey to our minimum viable product in 2025.
Q2: Now, you mentioned sharing P1 prototypes with automotive OEMs, tier one manufacturers, and consumer appliance companies but where’s the principal interest?
A2: The majority of these P1 prototypes will be going to automotive OEMs so the big car companies but we’re also engaging directly with some of the suppliers of batteries to those big car companies so that’s what I mean by tier one manufacturers.
Actually there’s a massive trend in consumer appliances so things like handheld vacuum cleaners and beauty products towards mobile devices that also need improved batteries and solid state batteries have got a lot to offer there so we’re also engaging with companies like that.
Q3: Your P2 prototypes are at high capacity and include significantly more layers, how realistic is that target?
A3: Well it’s an interesting facet of our roadmap going forward from where we are now through to P2 in that actually there is an increasing amount of mechanical and electrical engineering that goes into these cells to make larger batteries. It’s a journey well-travelled by existing lithium-ion development techniques so we’re not trying to invent new chemistries, wholly new approaches, we’re actually just increasing the manufacturing readiness level of our products and making the batteries large enough to be integrated into modules and packs for EVs.
Q4: As mentioned, you’ve issued a positive trading update. is it fair to say that the tech transfer to Cirtec is progressing well?
A4: Yes, that’s right so the tech transfer to Cirtec relates to our other product line our miniature Stereax cells.
People who are following the company will remember that in August we signed a tech transfer licensing and royalty agreement with Cirtec. They’re based in a place called Lowell, close to Boston in Massachusetts.
We’ve now actually completed the dispatch of the key equipment which will allow Cirtec to initiate the manufacturing of the Stereax cells with the exception actually of the cathode manufacturing process which we will retain initially here in the UK.
Cirtec are currently expanding the capacity of their clean room to support the growth in their business including that associated with Stereax manufacturing and as we go into next year, we’ll be working closely with that portfolio of customers to support their development plans.
Q5: Ilika is reporting significantly more revenue than the same period last year and I think more than the market was expecting. Will this improve your cash position at the end of the year?
A5: Yes, actually in the first half of the year, to the end of October, by the time we get to our half year results we expect to be able to announce revenue of about 1.3 million, that compares to £0.2 million for the same period last year. That’s really as a result of increased grant funding through our Faraday Battery Challenge projects where we’re receiving support on our road map development.
What that means actually is that indeed by the time we get to the end of the year, we expect actually to be in a stronger cash position than some analysts were expecting and in a business like ours cash is king.
So, that’s an important indicator that our team is working in a very effective manner in terms of the deployment of cash really fantastically capital efficient organisation that we’ve got here at Ilika.
