Ilika plc (LON:IKA) is the topic of conversation when Baden Hill Partners’ Clean-Tech Equities Specialist Dr Tom McColm caught up with DirectorsTalk for an exclusive interview.
Q1: Tom, Ilika have announced their results for 2024. What did you make of them?
A1: The numbers were as expected, maybe a little bit more grant revenue than normal that kept the cash burn down a bit, but really the numbers at the moment aren’t the most important thing.
What was very interesting was the progress that’s been delivered in the period and post-period on both the Stereax and particularly the Goliath side of the business.
Q2: So, if we look at the Goliath side then first, what milestones were delivered in and post-period and why were they important?
A2: Goliath is the solid-state battery cells for EVs, as you know, the bigger batteries that Ilika are doing. In the period, they hit what’s called a D4 design freeze, quite an important point where they froze the design, where they reached the level of performance that hit that, and then they turned that into a P1 prototype of that D4 design. So that was quite a landmark on the whole commercialisation journey.
Just shortly after that, at cell level, the pouch cell, they achieved energy density parity with incumbent lithium-ion EV batteries. Now that’s, it’s a bit of a symbolic thing, but that’s only going to get better, as they evolve. It means that their batteries will get more energy into a smaller space and that’s on top of the inherent safety and system advantages that solid-state batteries bring. That’s why everyone chases after them.
Post-period, probably the most important and relevant thing was that the P1 prototypes have been getting shipped to a couple of their tier one automotive customers for testing.
One of those customers, the testing and evaluation is being conducted in-house at Ilika, but the other they’re conducting it themselves. So, they have actually got EV solid-state batteries into customer hands for testing on their own sites, which is quite a landmark.
Q3: What progress was made on the micro format, the Stereax program? Y
A3: Stereax program, it’s probably a little bit ahead in terms of getting to revenue. First batches of Stereax M300 were shipped to customers for evaluation from the UK facility.
In the period, they, I think we covered this interim, but very good news that they agreed and entered into a 10-year licensing and technology transfer agreement with US MedTech partner, Cirtec, because Stereax’s is by far most value-add markets are in these medical device applications, of which Cirtec are a very decently sized player in the US
They also executed the equipment, the production equipment transfer installation, and they’re pretty much through the commissioning phase of that, so that Cirtec can start producing IKA’s batteries in the States at scale and then ramp that up.
So again, to emphasise, I think the key thing in both sides of the business in this period, they have got their battery technology out of their labs and into real customer hands for testing and evaluation, which is a good development.
Q4: With that in mind then, what should investors and potential investors be looking out for from Ilika over the next 12 months?
A4: On the Stereax side, completion of the Cirtec Stereax production commissioning, and then more shipments of Stereax, batches of Stereax to their customers, I think they’ve got 21 customers via Cirtec that they’re engaging with, so more shipments to those customers, potentially more customers coming online via Cirtec, and possibly, mid- where are we now. So if we go into mid-‘25, some early Stereax revenues, both from the bit that Ilika makes in-house and from Cirtec selling the devices themselves.
On the Goliath side, just more of the same, further customer trials and evaluation and more progress, like I said, they hit the D4, P1, the next big step on that journey is, I think, the D8 and the second prototyping stage. They’re going to be moving towards that and hopefully achieve that on their journey towards the minimum viable product in that market.
Once you’re up at those levels then the commercial conversations get very interesting, so that’s what people should be looking out for.
