Ilika plc (LON:IKA) Chief Executive Officer Graeme Purdy caught up with DirectorsTalk for an exclusive interview to discuss the proposed placing, trading update, key operational highlights, and recent Goliath milestones.
Q1: First off, Graeme, on the 10th of May, you announced a proposed placing an to support the Goliath and Stereax programs. Could you just describe the use of the proceeds in a little bit more detail and remind us of when the offer closes?
A1: So, we’re raising gross proceeds of up to £3.4 million. We’ve announced a conditional placing of half of that amount and the open offer for the remainder closes next week at 11:00 on May the 28th.
In terms of what we’re doing with the money, £750,000 million will be used to support the ongoing development of Goliath, £0.75 million will be deployed to increase battery testing capacity and to upgrade existing dry room facilities. Any proceeds over £1.5 million net will be used to further support Goliath and also Stereax from a working capital perspective.
Q2: Now, your trading update last week had a positive set of numbers. Could you just recap them for us?
A2: We expect to announce revenues of about £2.1 million, that compares with about £0.7 million last year, and an EBITDA loss, excluding share-based payments, of around £4.5 million, comparing to a loss of £7 million in the previous year.
Cash and cash equivalents at the end of the financial year, so 30th of April, were £11.9 million, so just short of £12 million.
Q3: What have been the key operational highlights over the last year?
A3: Well, I think one of the most significant operational highlights that we announced was really the 10-year licensing deal that we did with Cirtec Medical, about transferring manufacturing of Stereax across to their facilities under license, and the subsequent manufacturing of our Stereax solid-state batteries for medical devices and industrial wireless sensors.
At the end of 2023, so the end of last year, we achieved significant operational milestones on the Goliath program. So, Goliath, of course, is all about our large format cells for electric vehicles and cordless appliances and those milestones were really around, first of all, our D4 development milestone, which was a prototype design freeze, rapidly followed then by lithium-ion energy density parity.
Recently, following the end of the financial year, we announced that Agratas, which is the Tata Group company, the Tata Group battery business, has joined our SiSTEM grant-funded scale-up activity, as well as entering into a 12-month agreement that will really facilitate interactions between the companies to support Ilika’s journey through to the D8 development milestone, which is a second design freeze, a chemistry freeze.
It’ll underpin discussions around licensing opportunities and exploring wider collaboration between the two parties.
Q4: Yesterday, you confirmed another key Goliath milestone relating to customer validation of the technology. Could you just explain for us what that was?
A4: So this time last year, actually perhaps a bit later in the year when we last posted our annual results, Ilika said that it was going to manufacture and test our P1 prototypes based on that D4 development milestone that we were just talking about.
We confirmed that we successfully manufactured and tested batches of the P1s, and that we’ve now commenced a customer-sponsored and customer-designed test program, so not our own in-house test protocol, but a test protocol that’s used by one of our customers.
That’s the first of a series of commercial engagements with automotive Tier 1s and OEM so really that demonstrates that we’ve got to the end of that initial batch of manufacturing, and we’re now starting to share those cells in test programs with customers.
So, a really important step forward in our Goliath roadmap.
Q5: I guess you’ll be confirming those highlights in your annual results statements, when will that be released?
A5: We’ve confirmed that our annual results will be coming out on the 11th of July, which happens to be a week after the general election that’s forthcoming, so something to look forward to.
Planning for those annual results is now well advanced.
Q6: Are you planning a Q&A session with investors?
A6: Yes, as usual, on the day of our results, actually, it’ll be at 4.30pm UK time, we’ll be hosting a presentation and a Q&A session on the digital platform Investor Meet Company, or IMC, and anyone can sign up for free on that platform.
There’s actually a link in our recent RNS about our trading update and annual results so that should be pretty straightforward for anybody who wishes to interact with us and ask whatever questions they have.
