TIDMIKA
RNS Number : 1848N
Ilika plc
19 January 2023
Ilika plc
('Ilika,' the 'Company,' or the 'Group')
Half-year Report
Significant advancements for Stereax & Goliath, positioning
the Group for commercialisation
Ilika (AIM: IKA), a pioneer in solid-state battery technology,
announces its unaudited half-year report for the six months ended
31 October 2022.
Operating Highlights:
Ilika has continued to develop and commercialise its thin-film
Stereax (Ò) miniature solid-state batteries (SSBs) for powering
medical devices and industrial wireless sensors in specialist
environments, as well as progressing its development of
large-format Goliath cells for electric vehicles (EV) and cordless
appliances.
Stereax
-- Programme launch of product qualification and process
optimisation to increase process yield in preparation for
initiating commercial release in Q2 calendar year 2023
-- Commercial demand remains strongest from the miniature medical device sector
-- Secured 21 initial orders from 18 customers of which 11 are
for implanted medical devices, 3 for smart dental applications, 2
for smart lenses, 1 for aerospace and 4 others
Goliath
-- Improved the performance of the large format SSBs for
electric vehicles and cordless consumer appliances
-- Energy density of prototype cells have increased by c.80%
since the start of the financial year
-- Launched a series of scale-up studies including:
Ø Completing a manufacturing equipment design study with
COMAU
Ø An economic feasibility study with the UK Battery
Industrialisation Centre (UK-BIC)
Ø Securing grant funding for the commencement of manufacturing
equipment trials
-- Continued to interact with a portfolio of automotive and
consumer appliance OEMs globally, demonstrating strong interest for
the product
-- Progressing discussions for both grant-supported and commercial projects
Financial Summary:
-- Total revenue for the period GBP0.2m (H1 2022: GBP0.2m)
-- EBITDA loss GBP4.1m (H1 2022: GBP2.7m)
Ø The EBITDA loss for the period, excluding share-based
payments, increased due to the increase in operational costs
associated with the Stereax manufacturing facility and the Goliath
development programme
-- Cash balance at period end GBP18.6m (H1 2022: GBP27.7m)
-- Grant funding of GBP0.2m (H1 2022: GBP0.2m)
Ø In respect of three grant applications during this period.
Post Period End:
-- Signed a memorandum of understanding (MOU) with Cirtec
Medical LLC (Cirtec) to transfer Stereax manufacturing under
license to Cirtec's facility in the US
-- Appointment of new Chief Financial Officer, Jason Stewart
Commenting on the results Graeme Purdy, CEO of Ilika, said: "The
first half of this year has seen our technical teams make
significant progress in developing both Stereax and Goliath product
lines. Our recent MOU with Cirtec is an important milestone on the
journey to implementing our chosen IP licensing model. The Goliath
programme has reached the half-way point in matching lithium-ion
equivalence and we are engaging with partners to assist with
product specification and scale-up. Our Goliath partnering
activities will provide a platform from which we aim to secure both
grant funding and commercial revenue."
Ilika plc
Graeme Purdy, Chief Executive
Jason Stewart, Chief Financial
Officer +44 (0)23 8011 1400
Liberum Capital Limited
Andrew Godber, William Hall, Nikhil
Varghese +44 (0) 20 3100 2000
Joh. Berenberg, Gossler & Co.
KG (Joint Broker)
Matt Armitt, Mark Whitmore, Detlir
Elezi,
Mara Grasso +44 (0) 20 3207 8700
Walbrook PR Ltd +44 (0)20 7933 8780 or ilika@walbrookpr.com
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About Ilika plc
Ilika specializes in the development of solid-state batteries.
Its Stereax product line is designed for miniature medical implants
and specialist internet of Things (IoT) applications. Stereax
enables disruptive product designers looking for an intrinsically
safe, long life (1000s recharges), low leakage (nA) and miniature
power source in a rectangular form factor similar to ICs. For more
information about Ilika, please visit: https://www.ilika.com .
Joint Chairman's and CEO's Statement
Review of Period
Principal Activities
Ilika has continued to pursue its strategy of developing and
commercialising its cutting-edge solid-state batteries (SSBs). The
Company's mission is to rapidly develop leading-edge IP,
manufacture and sell SSBs for markets that cannot be addressed with
conventional batteries due to their safety, charge rates, energy
density and life limits. We will achieve this using ceramic-based
lithium-ion technology that is inherently safe in manufacture and
usage and easier to recycle, which differentiates our products from
existing batteries.
Ilika has two product lines: miniature Stereax(R) SSBs for
powering medical devices and industrial wireless sensors in
specialist environments, and large format Goliath SSBs for electric
vehicles (EV) and cordless appliances.
Stereax SSBs
Ilika's miniature Stereax cells are differentiated from other
solid-state technology through its choice of materials and its use
of an efficient, low temperature evaporation process that is
capable of higher manufacturing rates than other existing miniature
solid-state routes. This results in the following benefits relative
to previous solid-state battery designs:
-- Lower cost of manufacture, avoiding the use of expensive sputtering targets
-- Can be charged and discharged more times through use of a silicon anode
-- Less packaging required
-- High temperature resilience
The unique benefits of Stereax batteries make them particularly
useful for medical implants and industrial applications. Miniature
Stereax batteries can enable medical devices in a way that is
currently not possible with conventional lithium-ion batteries.
Their compact, high energy-density, high power characteristics make
them useful for a range of medical implant applications covering
blood pressure monitoring to neuro-stimulation. Industrial
automation, or Industrial Internet of Things (IIoT) as it is
sometimes referred to, requires low maintenance batteries with a
long lifetime, sometimes in situations that require them to operate
at elevated temperatures above those for which standard lithium-ion
batteries are rated (typically 60 degC).
Stereax Manufacturing Scale-up and Commercialisation
Ilika successfully commissioned its UK Stereax factory, or fab,
at the end of calendar year 2021. The first product to be released
to customers will be the M300. As mentioned in Ilika's trading
update of 17 November 2022, initial release of this product is
expected to commence in Q2 calendar year 2023. In the medical
device sector, commercial ramp up usually takes five years, in line
with regulatory approval timelines. Demand from applications such
as smart orthopaedics, neurostimulation and smart contact lenses
has created opportunities for technology transfer and licensing.
Over the past year, Ilika has experienced significant inflation in
energy and consumable costs relative to its budget expectations,
but also relative to other countries such as the USA. This makes
IIoT markets difficult to address from our UK facility and by the
same token it is making an early technology transfer to a larger
manufacturing partner overseas more attractive.
Ilika has intensified its partnering discussions, in particular
with Cirtec Medical LLC, with whom Ilika has recently entered into
an MOU to transfer production under license to Cirtec's Lowell,
Massachusetts, US facility. Ilika will focus on advanced technology
development and IP licensing in support of Cirtec's manufacturing
and commercialisation activities.
Large Format Goliath SSBs
Ilika's Goliath cells are differentiated from other solid-state
prototype cells through Ilika's choice of materials, cell
architecture and manufacturing process. The key materials choices
to be made by SSB developers relate to the selection of cathode,
electrolyte and anodes. Different developers have selected
differentiated combinations of these materials to achieve an
outcome suitable for their target markets. Ilika has chosen
materials that have the potential to enable longer range vehicles
with battery packs that last longer and can be recycled more
easily.
Ilika's initial target market for Goliath in automotive is the
luxury performance market, which is less cost-sensitive than higher
volume segments and is willing to pay a premium for the enhanced
vehicle range. In order to address that market, Ilika is driving
forward its Goliath development programme, in which it has improved
the energy density of its prototype cells by c.80% since the start
of the financial year. Ilika is now halfway to its target of
matching lithium-ion energy density by the end of calendar year
2023, which is an important milestone on the way to the initial
release of prototype cells to automotive partners for evaluation in
2024.
Ilika is currently implementing a plan to increase the capacity
of its existing pre-pilot production facility using automation and
larger scale items of equipment, such as a roll-to-roll coater.
Ilika has increased the target capacity of this equipment from 0.5
to 1.5 MWh/a to allow it to scale production volumes and mature its
technology to the level required to respond to automotive requests
for quotation (RFQ) by the end of 2025. Ilika's experience working
with automotive partners in the first half of this year has shown
that the industry expects suppliers to have reached what it defines
as A-Sample readiness to respond to RFQs. Beyond 1.5 MWh/a, at B-
and C-Sample readiness and volumes, Ilika intends to work with
manufacturing partners such as the UK Battery Industrialisation
Centre (UK-BIC) to scale to higher levels of production capacity on
production-intent equipment i.e., equipment that could be used for
mass production.
Ilika has financed its Goliath technology development programme
with grant funding from the Faraday Battery Challenge and equity
funding. In addition, Ilika has received grants to support market
strategy analysis and scale-up studies managed by the Advanced
Propulsion Centre (APC). The APC-supported SOLSTICE project between
Ilika and Comau, part of Stellantis and a world leader in the
industrial automation field, concluded that there were no cost or
technical barriers to scaling-up Ilika's Goliath solid-state
battery technology for electric vehicles and delivered a plant
design for a mega-scale manufacturing facility. The recently
completed BUS100 project was a collaboration between Ilika and
UK-BIC which analysed the economic feasibility of placing a 100MWh
SSB line at UK-BIC to enable Ilika's Goliath electric vehicle
batteries to be manufactured at scale. The findings of that study
were that the UK-BIC's electrode coating lines could be used for
Goliath, which would significantly reduce future capital
requirements for Ilika as it scales-up. Ilika continues to work
with equipment suppliers in the STEP project to de-risk the move to
pilot line production levels.
Furthermore, Ilika continues to interact with a portfolio of
automotive and consumer appliance OEMs globally, with a view to
intensifying interactions through both grant-supported and
commercially-funded collaborations as the Goliath technology
matures.
Board appointment
Post period end, the Company appointed Jason Stewart as Chief
Financial Officer, effective as of 3 January 2023. Jason has a
significant commercial experience in the manufacturing sector and
was most recently interim CFO at Sunseeker International ltd where
he successfully managed the company through the COVID-19 crisis,
managing costs and re-establishing production following the
lockdown.
Outlook
Ilika will continue to deploy its resources to maximise
shareholder return while it delivers its programmes. Regarding
Stereax, Ilika will broaden and deepen its relationship with
Cirtec, following up on the recently-signed MOU with an expected
fully-developed contractual relationship. Goliath is well-aligned
with the electrification transformation of the transport sector and
Ilika expects that both government grant support and commercial
interest will intensify as the product matures. Ilika will continue
to monitor competitor developments to ensure Goliath remains a
differentiated and compelling proposition.
Graeme Purdy, CEO
Keith Jackson, Chairman
Ilika plc
Consolidated statement of comprehensive income for the six
months ended 31 October 2022
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Oct 2022 31 Oct 2021 30 Apr
2022
Notes GBP GBP GBP
------------------------------------- ------ -------------- -------------- --------------
Turnover 203,723 195,418 496,103
------------------------------------- ------ -------------- -------------- --------------
Revenue - 15,932 30,878
UK grants 203,723 179,486 465,225
------------------------------------- ------ -------------- -------------- --------------
Cost of sales (120,464) (125,257) (218,794)
Gross profit 83,259 70,161 277,309
Administrative expenses (4,940,257) (3,301,949) (7,966,807)
Share-based payment charge (212,708) (248,504) (429,686)
------------------------------------- ------ -------------- -------------- --------------
(5,152,965) (3,550,453) (8,396,493)
-------------- --------------
Operating loss (5,069,706) (3,480,292) (8,119,184)
Financial income 6,262 2,867 5,590
Other Income 44,233 - -
Financial expense (18,299) (14,675) (31,299)
-------------- -------------- --------------
Loss before tax (5,037,510) (3,492,100) (8,144,893)
Taxation 958,210 225,000 1,016,331
Loss for period/total comprehensive
income attributable to owners
of parent (4,079,300) (3,267,100) (7,128,562)
Loss per share
Basic and diluted 2 (0.03) (0.02) (0.05)
-------------- -------------- --------------
The results from the periods shown above are derived entirely
from continuing operations.
Consolidated balance sheet as at 31 October 2022
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Oct 2022 31 Oct 2021 30 Apr
2022
Notes GBP GBP GBP
------------------------------------ ------- ------------- ------------- -------------
ASSETS
Non-current assets
Intangible assets 2,426,896 1,737,318 1,958,153
Property, plant and equipment 4,831,583 4,843,932 5,072,280
Right-of-use assets 761,126 785,765 891,254
-------------
Total non-current assets 8,019,605 7,367,015 7,921,687
-------------
Current assets
Trade and other receivables 1,661,395 2,053,304 1,594,326
Current tax receivable 2,019,264 555,000 1,016,822
Other financial assets - bank
deposits 772,675 770,902 772,675
Cash and cash equivalents 17,837,980 26,933,312 22,626,280
-------------
Total current assets 22,291,314 30,312,518 26,010,103
-------------
Total assets 30,310,919 37,679,534 33,931,790
------------- ------------- -------------
Issued capital and reserves attributable
to owners of parent
Issued share capital 1,584,720 1,574,679 1,582,342
Share premium 64,806,916 64,698,829 64,754,910
Capital restructuring reserve 6,486,077 6,486,077 6,486,077
Retained earnings (45,253,488) (37,706,618) (41,386,898)
-------------
Total equity 27,624,225 35,052,967 31,436,431
-------------
LIABILITIES
Current liabilities
Trade and other payables 1,705,254 1,759,570 1,407,398
Lease liabilities 281,525 195,524 223,644
Total current liabilities 1,986,779 1,955,094 1,631,042
Non-current liabilities
Lease liabilities 459,550 531,108 623,952
Provisions 240,365 140,365 240,365
------------- ------------- -------------
Total non-current liabilities 699,915 671,473 864,317
Total liabilities 2,686,694 2,626,567 2,495,359
-------------
Total equity and liabilities 30,310,919 37,679,534 33,931,790
------------- ------------- -------------
Consolidated cash flow statement for the six months ended 31
October 2022
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Oct 2022 31 Oct 2021 30 Apr 2022
GBP GBP GBP
------------------------------------------- ------------- ------------- -------------
Cash flows from operating activities
Loss before taxation (5,037,510) (3,492,100) (8,144,896)
Adjustments for:
Amortisation 21,717 47,116 47,512
Depreciation 767,567 486,299 1,253,038
Equity settled share-based payments 212,708 248,504 429,686
Loss on disposal of plant, property
and equipment (750) - (2,000)
Net financial expense/ (income) (32,195) 11,808 25,709
------------- ------------- -------------
Operating cash flow before changes
in working capital, interest and
taxes (4,068,463) (2,698,372) (6,390,948)
Decrease/(increase) in trade and
other
receivables (67,069) 120,293 279,221
Increase /(decrease) in trade and
other payables 297,856 386,360 34,188
Decrease in provisions - - 100,000
------------- ------------- -------------
Cash utilised by operations (3,837,676) (2,191,719) (5,977,539)
Tax received - - 329,509
------------- ------------- -------------
Net cash flow from operating activities (3,837,676) (2,191,719) (5,648,030)
Cash flows from investing activities
Interest received 6,262 2,867 5,590
Purchase of intangible assets (490,460) (721,375) (942,606)
Purchase of property, plant and equipment (396,742) (2,920,392) (3,491,671)
Sale of Property, Plant and equipment 750 - 2,000
Increase in other financial assets 0 (1,822) (3,595)
------------- ------------- -------------
Net cash used in investing activities (880,190) (3,640,722) (4,430,282)
Cash flows from financing activities
Proceeds from issuance of ordinary
share capital 54,386 24,769,724 24,833,468
Cost of share issue - (885,414) (885,414)
Capital element of finance leases
repaid (106,521) (115,763) (209,371)
Lease Payments interest (18,299) - (31,299)
Net cash from financing activities (70,434) 23,768,547 23,707,384
------------- ------------- -------------
Net (decrease)/ increase in cash
and cash equivalents (4,788,300) 17,936,105 13,629,072
Cash and cash equivalents at the
start of the period 22,626,280 8,997,208 8,997,208
Cash and cash equivalents at the
end of the period 17,837,980 26,933,313 22,626,280
============= ============= =============
Consolidated statement of changes in equity (unaudited)
Share Capital
Share premium restructuring Retained
capital account reserve earnings Total
GBP GBP GBP GBP GBP
----------------------- ---------- ------------ --------------- -------------- --------------
As at 30th April 2021 1,396,265 40,992,933 6,486,077 (34,688,022) 14,187,253
---------- ------------ --------------- -------------- --------------
Share-based payment - 248,504 248,504
Issue of Shares 178,414 24,591,311 24,769,724
Cost of share Issue (885,414) (885,414)
Loss and total
comprehensive income - - - (3,267,100) (3,267,100)
---------- ------------ --------------- -------------- --------------
As at 31 October 2021 1,574,679 64,698,829 6,486,077 (37,706,618) 35,052,967
---------- ------------ --------------- -------------- --------------
Share-based payment - - - 181,182 181,182
Issue of shares 7,663 56,081 - - 63,744
Loss and total
comprehensive income - - - (3,861,462) (3,861,462)
---------- ------------ --------------- -------------- --------------
As at 30th April 2022 1,582,342 64,754,910 6,486,077 (41,386,898) 31,436,431
---------- ------------ --------------- -------------- --------------
Share-based payment - - - 212,708 212,708
Issue of shares 2,378 52,008 - - 54,386
Loss and total
comprehensive income - - - (4,079,300) (4,079,300)
1,584,720 64,806,918 6,486,077 (45,253,490) 27,624,225
---------- ------------ --------------- -------------- --------------
Share capital
The share capital represents the nominal value of the equity
shares in issue.
Share premium account
When shares are issued, any premium paid above the nominal value
is credited to the share premium reserve.
Retained earnings
The retained earnings reserve records the accumulated profits
and losses of the Group since inception of the business.
Capital restructuring reserve
The capital restructuring reserve arises on the accounting for
the share for share exchange. It represents the difference between
the value of the issued equity instruments of Ilika Technologies
Limited immediately before the share for share exchange and the
equity instruments of Ilika plc along with the shares issued to
effect the share for share exchange.
Notes to the consolidated financial statements
1. Accounting policies
Basis of preparation
The interim financial statements, which are unaudited, have been
prepared on the basis of accounting policies consistent with
International Financial Reporting Standards ("IFRSs") adopted by
the European Union. The accounting policies are the same as applied
in the Group's latest financial statements.
The interim financial statements do not include all of the
information required for full annual financial statements and do
not comply with all the disclosures in IAS 34 'Interim Financial
Reporting'. Accordingly, whilst the interim financial statements
have been prepared in accordance with IFRS they cannot be construed
as being in full compliance with IFRS.
The financial information for the year ended 30 April 2022 does
not constitute the full statutory accounts for that period. The
Annual Report and Accounts for 30 April 2022 have been filed with
the Registrar of Companies. The Independent Auditors' Report on the
Annual Report and Accounts for 2022 was unqualified and did not
include references to any matters which the auditors drew attention
by way of emphasis without qualifying their report and did not
contain statements under Section 498(2) or 498(3) of the Companies
Act 2006.
Going concern
The financial statements are prepared on a going concern basis
which the directors believe continues to be appropriate. The Group
meets its day to day working capital requirements through existing
cash resources which, at 31 October 2022, amounted to GBP18.6m. The
directors have prepared projected cash flow information for the
period ending twelve months from the date of their approval of
these financial statements. On the basis of this cash flow
information the directors believe that the Group will be able to
continue to trade for the foreseeable future.
2. Loss per share
Loss per ordinary share have been calculated using the weighted
average number of shares in issue during the relevant financial
periods. The weighted average number of equity shares in issue and
the earnings, being loss after tax, are as follows:
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Oct 2022 31 Oct 2021 30 Apr 2022
Number Number Number
----------------------------------- ------------- ------------- -------------
Weighted average number of equity
shares 158,309,838 148,643,793 153,175,933
GBP GBP GBP
----------------------------------- ------------- ------------- -------------
Loss, being loss after tax (4,079,300) (3,267,100) (7,128,562)
The loss attributable to ordinary shareholders and weighted
average number of ordinary shares for the purpose of calculating
the diluted earnings per ordinary share are identical to those used
for basic earnings per share. This is because the exercise of share
options and warrants would have the effect of reducing the loss per
ordinary share and is therefore not dilutive under the terms of IAS
33.
- Ends -
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