TIDMIKA
RNS Number : 5042L
Ilika plc
12 January 2016
Ilika plc
('Ilika,' the 'Company,' or the 'Group')
Half Yearly Report
Ilika (AIM: IKA), the accelerated materials innovation company,
announces its unaudited half yearly report for the six months ended
31 October 2015. The period has seen continued progress with its
solid-state battery development programme, a strengthening of its
IP portfolio and constructive discussions with its commercial
partners.
Ilika accelerates the discovery of new and patentable materials
using its patented high throughput technologies process for
identified end uses in the energy, electronics, and aerospace
sectors. Its flagship programme is the development of unique
solid-state batteries.
Operational Highlights
-- Data from working prototype batteries shared with potential OEM partners
-- Alignment and agreement of battery capability with OEM
partners, enabling definition of a roadmap of specific battery
architectures
-- Patent granted in China for Ilika's proprietary process to produce solid-state batteries
-- UK Grant Award of GBP470k to take a lead role in GBP2.15m
collaborative programme to develop self-healing alloys for
aerospace applications
-- European Patent Office upheld Ilika's opposition to a fuel
cell catalyst patent from Brookhaven Science Associates (BSA)
-- Mike Inglis, former board member and executive of ARM, appointed as Non-Executive Chairman
Financial Summary
-- Total revenue for the period of GBP0.3m (1H 2014: GBP0.6m)
-- Loss per share of 3p (1H 2014: 2p per share)
-- Net cash outflow in the period of GBP1.5m (1H 2014: inflow GBP0.1m)
-- Net Cash at period end of GBP4.5m (1H 2014: GBP7.2m)
As previously announced, during the first half of the year, the
Group committed an increasing proportion of its operational
resource to the internally funded battery development programme,
intended to drive the growth of the business over the coming years.
As a consequence, the Group has generated lower revenue and profit
from customers than in the prior year.
Commenting on the results Graeme Purdy, CEO of Ilika, said: "Our
team has made good progress and breakthroughs with this complex
technology and has produced working batteries for evaluation by our
target OEM partners. This effort has resulted in interactions which
have led to the definition of a detailed product roadmap. We now
look forward to advancing these designs and stepping up our
commercial interactions with our OEM partners."
Ilika plc
Graeme Purdy, Chief Executive
Steve Boydell, Finance Director +44 (0)23 8011 1400
NUMIS Securities Limited
Oliver Cardigan/ Paul Gillam/
James Black +44 (0) 20 7260 1000
Walbrook PR Ltd +44 (0)20 7933 8780 or ilika@walbrookpr.com
Paul Cornelius Mob: +44 (0)7827 879 460
Lianne Cawthorne Mob: +44 (0)7584 391 303
Joint Chairman's and CEO's Statement
Review of Period
Ilika has continued to pursue its strategy of deploying its high
throughput materials development capabilities in the energy,
electronics and aerospace sectors. Ilika maintains a portfolio of
activities, with its principal focus being its flagship programme
for the development of solid-state batteries.
Solid-state battery technology
Ilika has been active in the development of solid-state battery
technology since 2008, when it commenced a collaboration with
Toyota, principally to develop materials suitable for use in
batteries for hybrid vehicles. In the course of that collaboration
Ilika and Toyota have filed joint patent applications protecting
relevant materials and processes. The key advantages of solid-state
batteries relative to standard lithium-ion batteries are:
-- Non flammable
-- 6 x faster charging
-- 4x longer charge retention
-- 2x increased energy density, making them half the volume for a given charge
Ilika has identified that these benefits also make the batteries
suitable for applications outside of the automotive sector. In
particular, Ilika has defined a commercially-oriented, detailed
product roadmap for its initial target market, which is
micro-batteries for the "Internet of Things" (IoT).
Ilika's battery technology is differentiated from other
solid-state batteries through its choice of materials and its use
of an efficient evaporation process that is capable of higher
deposition rates than other solid-state routes. This results in the
following benefits relative to previous solid-state battery
designs:
-- Ability to stack cells in a continuous process prior to
encapsulation, increasing the energy capacity per footprint of
battery
-- Less encapsulation required
-- High temperature resilience
Within the IoT market, there are a number of segments which are
addressable with Ilika's technology. The largest market for IoT
connected devices is in domestic homes and commercial buildings
(smart buildings). Typical devices in smart buildings measure
light, temperature and humidity, feeding into lighting and Heating
Ventilation and Air Conditioning systems. Currently, most of the
systems deployed in smart buildings are hard-wired, resulting in
significant installation costs. Deploying battery-powered sensors
reduces installation costs, particularly for the retrofit of
existing buildings, but such batteries must be rechargeable to
avoid high maintenance costs associated with regular battery
replacement. In this context, Ilika's battery technology offers the
benefit of being suitable for combination with energy harvesting
devices. The most readily available energy harvesters are
photovoltaic panels, which are becoming increasingly efficient and
cost effective.
The specific benefits of Ilika's battery technology for this
application are a small battery footprint, a long battery life
(expected to be 10 years), the ability to discharge rapidly when a
burst of data transmission is required and finally, the ability to
be trickle charged by the small electrical currents typically
generated my such small harvesting devices.
Another segment of interest is transport applications, including
automotive and aerospace, where using distributed batteries and
energy harvesters can reduce the significant capital and operating
cost of the cabling currently required to connect instrumentation.
The high temperature resilience of Ilika's batteries is one of the
key benefits relevant here.
A further addressable market is the healthcare sector. Ilika's
batteries can enable miniature medical devices in a way that is
currently not possible with conventional lithium-ion batteries.
Also, the use of wireless technology and distributed sensors can
create patient monitoring solutions with substantial cost reduction
and enhanced care benefits.
The product that Ilika will market to its partners will be a
licensing package including the following:
-- Battery architecture design
-- Detailed definition of the materials composition and properties
-- Manufacturing process description
-- Sample battery devices and supporting system
-- IP portfolio
Following the commencement of pilot production of solid-state
batteries in March 2015, Ilika has been optimising the performance
of the equipment and the batteries and has shared performance data
for evaluation by commercial partners.
The first product on Ilika's roadmap is code-named "Pelican",
which is expected to be launched in H1 2016 and is designed to
address multiple opportunities identified in the above discussion
on addressable markets. It will provide a basis for further product
lines going forward.
Commercial Progress
Ilika's intention is to license its technology to OEM partners
using the model that has become familiar in the semiconductor
industry, based on license fees and royalties. Through the use of
its pilot line, Ilika is also able to provide initial quantities of
product to seed the market for OEM's. Licensing may also involve
the use of 3(rd) party foundries working under contract to
OEM's.
Ilika has continued to pursue a three-phase strategy to the
commercialisation of its battery technology:
-- Optimisation of the battery architecture for specific applications
-- Validation and integration of the batteries into application systems
-- Technology transfer and licensing for manufacture
The development of the roadmap is demonstration of the
implementation of the first phase of this strategy. This phase will
continue to run in parallel with second phase, which has now
commenced. The first two phases are creating a pipeline of
commercialisation opportunities underpinning the future revenue
growth of the company.
Intellectual Property Reinforcement
Ilika has continued to support the filing and prosecution of
patents protecting its proprietary intellectual property (IP) in
solid-state batteries. In September 2015, Ilika received a Notice
of Grant in China for its patent application supporting solid-state
batteries jointly filed with Toyota Motor Company on 21 July 2011.
This notice followed the successful British grant in May 2014 and
the European grant in July 2015. This filing resulted from
collaborative work undertaken by Ilika and Toyota, which commenced
in 2008. This patent family is one of the two earliest filings of a
growing portfolio of IP exemplifying Ilika's unique approach to
solid-state battery production using evaporation sources. More
recent applications in the portfolio contain both jointly-owned and
solely-owned IP.
Materials Development Portfolio
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In addition to its flagship product development programme for
solid-state batteries, Ilika has continued to support an active
portfolio of materials development projects. Over the first half of
the current financial year, around 75% of Ilika's resources were
deployed in solid-state battery development, 15% in alloys for
aerospace and 10% in materials for electronics.
The largest aerospace alloy project was the continuation of the
GBP1.3 million grant-funded superalloy development project which
started in April 2014 with the University of Cambridge, Diamond
Light Source and Rolls Royce. In September 2015 Ilika announced
that it had been awarded a further GBP466,000 grant for research
and technology into self-healing alloys, as part of a lead role in
a GBP2.15 million, three-year collaborative project with Reliance
Precision Engineering, University of Sheffield, GKN and BAE
Systems. This latest project has two objectives: the development of
a new generation of self-healing alloys suitable for additive
manufacturing (AM) and secondly the development of manufacturing
processes combining the flexibility of AM with the precision of
subtractive (conventional) machining.
Board
In July 2015, Ilika announced the appointment of Mike Inglis as
a Non-Executive Director, who subsequently took over from Jack
Boyer OBE as Non-Executive Chairman following Mike's successful
election at the AGM in September 2015. Mike is also a Non-Executive
Director of BT and an Independent Director of US-based Advanced
Micro Devices Inc (AMD). He was formerly Chief Commercial Officer
at ARM Holdings plc until March 2013, having previously been EVP of
ARM's Processor Division and EVP Sales and Marketing. Mike's
appointment is particularly pertinent to Ilika's ambition to
commercialise its know-how through licensing models successfully
deployed by ARM in the semiconductor sector.
Outlook
Sustained technical progress in 2015 has resulted in Ilika being
in a strong position to intensify its interactions with OEM
partners going forward. In 2016, the Company expects to make
further progress with the implementation of its roadmap, including
entering into a series of technology integration projects designed
to bring IoT solutions to the market.
Graeme Purdy, CEO
Mike Inglis, Chairman
Ilika plc
Consolidated statement of comprehensive income for the six
months ended 31 October 2015
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Oct 2015 31 Oct 2014 30 Apr 2015
Notes GBP GBP GBP
------------------------------------- ------ -------------- -------------- --------------
Revenue 253,693 606,328 1,093,978
Cost of sales (166,881) (339,458) (591,044)
-------------- -------------- --------------
Gross profit 86,812 266,870 502,934
Administrative expenses (1,980,137) (1,866,561) (3,588,837)
-------------- -------------- --------------
Operating loss (1,893,325) (1,599,691) (3,085,903)
Financial income 18,162 27,080 50,557
Loss before tax (1,875,163) (1,572,611) (3,035,346)
Taxation 203,423 167,500 333,647
Loss for period/total comprehensive
income attributable to owners
of parent (1,671,740) (1,405,111) (2,701,699)
Loss per share 2
Basic and diluted (0.03) (0.02) (0.04)
-------------- -------------- --------------
The results from the periods shown above are derived entirely
from continuing operations.
Consolidated balance sheet as at 31 October 2015
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Oct 2015 31 Oct 2014 30 Apr
2015
Notes GBP GBP GBP
------------------------------------ ------- ------------- -------------- -------------
ASSETS
Non current assets
Intangible assets 22,102 35,192 30,119
Property, plant and equipment 486,540 553,246 560,698
------------- -------------- -------------
Total non current assets 508,642 588,438 590,817
------------- -------------- -------------
Current assets
Trade and other receivables 525,374 636,454 496,985
Current tax receivable 175,000 137,975 304,122
Other financial assets - bank
deposits 536,461 6,052,336 528,349
Cash and cash equivalents 4,005,500 1,202,433 5,479,035
------------- -------------- -------------
Total current assets 5,242,335 8,029,198 6,808,491
------------- -------------- -------------
Total assets 5,750,977 8,617,636 7,399,308
------------- -------------- -------------
Issued capital and reserves attributable
to owners of parent
Issued share capital 663,779 658,836 663,748
Share premium 17,467,077 17,391,768 17,465,442
Capital restructuring reserve 6,486,077 6,486,077 6,486,077
Retained earnings (19,673,197) (16,831,890) (18,094,830)
------------- -------------- -------------
Total equity 4,943,736 7,704,791 6,520,437
------------- -------------- -------------
LIABILITIES
Current liabilities
Trade and other payables 657,241 762,845 728,871
Provisions 150,000 150,000 150,000
------------- -------------- -------------
Total liabilities 807,241 912,845 878,871
------------- -------------- -------------
Total equity and liabilities 5,750,977 8,617,636 7,399,308
------------- -------------- -------------
Consolidated cash flow statement for the six months ended 31
October 2015
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Oct 2015 31 Oct 2014 30 Apr 2015
GBP GBP GBP
------------------------------------------- ------------- ------------- -------------
Cash flows from operating activities
Loss before taxation (1,875,163) (1,572,611) (3,035,346)
Adjustments for:
Amortisation 8,017 4,644 12,736
Depreciation 143,154 190,999 324,556
Equity settled share based payments 93,373 - 33,648
Net financial income (18,162) (27,080) (50,557)
------------- ------------- -------------
Operating cash flow before changes
in working capital, interest and
taxes (1,648,781) (1,404,048) (2,714,963)
Decrease/(increase) in trade and
other
receivables (28,389) (64,150) 79,918
Increase /(decrease) in trade and
other payables (71,630) 152,098 118,124
------------- ------------- -------------
Cash utilised by operations (1,748,800) (1,316,100) (2,516,921)
Tax received 332,545 277,716 277,716
------------- ------------- -------------
Net cash flow from operating activities (1,416,255) (1,038,384) (2,239,205)
Cash flows from investing activities
Interest received 18,162 27,080 45,958
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