TIDMIKA
RNS Number : 5944T
Ilika plc
09 January 2017
Ilika plc
('Ilika,' the 'Company,' or the 'Group')
Half-year Report
Ilika (AIM: IKA), a pioneer in materials innovation and
solid-state battery technology, announces its unaudited half-year
report for the six months ended 31 October 2016.
Operational Highlights
-- Shipped evaluation volumes of Stereax(TM) M250 batteries to potential OEM partners
-- Refined solid-state battery development roadmap with improved
definition of temperature, capacity and miniaturisation
requirements
-- Granted patents:
o In China for Ilika's proprietary process to produce
solid-state batteries
o In Europe for its unique High-Throughput Vapour Deposition
synthesis platform
-- Awarded GBP365k grant to develop protected anodes for lithium sulphur batteries
Financial Summary
-- Total revenue for the period GBP329k (H1 2015: GBP254k)
-- Loss per share 3p (H1 2015: 3p per share)
-- Net cash inflow in the period GBP4.1m (H1 2015: outflow GBP1.5m)
-- Placing in the period raised GBP5.8m net of expenses
-- Cash balance at period end GBP7.1m (H1 2015: GBP4.5m)
Post Period End
-- Received notifications of intent to award three new grants,
two of which involve solid state battery integration programmes,
amounting to an aggregate revenue value to the Company of GBP1.4m
over two years.
-- Received a notification of intent to award a
commercially-funded materials development programme from an
existing customer to a value of around $1m over 12 months.
-- Received Notices of Allowance in the US in respect of two
patent applications covering its vapour deposition process for
solid state battery materials and also, metal oxide supports for
fuel cell catalysts
Commenting on the results Graeme Purdy, CEO of Ilika, said: "In
the first half of the year we have intensified commercial
discussions with potential solid-state battery licensees, further
strengthened our IP portfolio and augmented our materials discovery
programmes."
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 McManus Mob: +44 (0)7980 541 893
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. During that collaboration, Ilika and
Toyota 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
-- 6x 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 many segments which are
addressable with Ilika's technology. The unique benefits of
Stereax(TM) batteries make them particularly useful for
bioelectronics and Industrial IoT applications. Miniature
Stereax(TM) 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 bioelectronic applications covering
ophthalmic to neurostimulation. Industrial IoT, or Industry 4.0 as
it is sometimes referred to, requires batteries that can reliably
operate at elevated temperatures above those for which standard
lithium-ion batteries are rated.
Following the launch of its Stereax(TM) M250 product in April
2016, Ilika has been producing pre-commercial quantities of battery
cells on its pilot line for use in demonstrator devices and for
customer evaluation. Feedback on the performance of these cells
relative to the specifications required for customer applications
has enabled the refinement of Ilika's Stereax(TM) roadmap. Although
the M250 is already a small device, some of Ilika's bioelectronic
partners are developing applications required further
miniaturisation down to the mm-scale. Ilika has defined a product
on that scale towards which it is currently working. Release of its
first mm-scale device is expected in 2017. The second trend is the
requirement for higher energy densities per footprint. This will
require a combination of thicker cathodes (which define the energy
capacity of the cell) and cell stacking. This is a central thread
of Stereax development and a differentiator of Ilika's technology
from other solid-state approaches. The third trend is the drive
towards higher operating temperatures for industrial applications.
Most industrial standards rise to at least 85 degC, with 125 degC
being common in many process environments. The M250 is rated to 100
degC and our roadmap stretches to 150 degC in the next launch.
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
-- IP portfolio
Commercial Progress
Ilika's intention is to license its technology to OEM partners
using the model that has become standard in the semiconductor
industry, based on license fees and royalties. Using 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 the 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 July 2016, Ilika confirmed the 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
The company's flagship product development programme is for
solid-state batteries, but Ilika continues to support an active
portfolio of materials development projects.
Aerospace Alloys
Ilika has continued in its role leading the three-year programme
for the development of superalloy compositions for gas turbine
engines with better thermal efficiency than current alloys. The
alloys are designed to increase gas turbine performance, reducing
CO(2) emissions and noise levels at take-off. This collaboration
with the University of Cambridge, Diamond Light Source and Rolls
Royce, is scheduled to be completed in September 2017. Ilika
presented an extract of the project's accomplishments in the field
at the twice-yearly Superalloys conference held in the USA in
September 2016.
Another Ilika-led, three-year, aerospace alloy project, which
got underway in September 2015, is the development of self-healing
alloys in collaboration with Reliance Precision Engineering,
University of Sheffield, GKN and BAE Systems. This project aims to
develop alloys suitable for Additive Manufacturing processes and to
develop a metallic manufacturing process that takes advantage of
the flexibility of additive manufacturing and the precision of
subtractive manufacturing.
Electronic materials
The two-year project with Seagate and the University of
Southampton commenced in February 2016 with the aim of providing a
demonstration of 2D materials for Hard Disk Drive applications.
Materials with superior nanophotonic properties are being developed
to achieve improved hard drive performance and reliability.
Battery materials
In August 2016, Ilika announced that it is taking part in a
three-year project to develop protected anodes for lithium sulphur
batteries. Led by Johnson Matthey and including Williams Grand Prix
Engineering Ltd, the University of Oxford and the University of
Warwick, the project is supported by Innovate UK and the
Engineering and Physical Sciences Research Council. The aim is to
discover new electrolyte composition options which will provide
enhanced performance pouch cells that can be made using existing
cell fabrication methods. The pouch cells being developed in this
project are high capacity, low cost batteries for large scale
renewable energy storage and therefore address a distinct market
segment to the Internet of Things applications for which Ilika's
Stereax(TM) batteries are designed.
Outlook
The Company is progressing its discussions with potential
solid-state battery licencees, particularly for applications in the
medical and industrial sectors.
The order book and sales pipeline have been reinforced with the
notifications of intent to award three new grants and one new
commercially-funded materials development programme. All of these
programmes will be carried out in partnership with
globally-recognised OEMs and are expected to start in this current
financial year.
Graeme Purdy, CEO
Mike Inglis, Chairman
Ilika plc
Consolidated statement of comprehensive income for the six
months ended 31 October 2016
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Oct 2016 31 Oct 2015 30 Apr 2016
Notes GBP GBP GBP
------------------------------------- ------ -------------- -------------- --------------
Revenue 328,639 253,693 605,924
Cost of sales (220,101) (166,881) (336,281)
-------------- -------------- --------------
Gross profit 108,538 86,812 269,643
Administrative expenses (2,030,138) (1,886,764) (3,776,950)
Share-based payment charge (278,326) (93,373) (352,291)
-------------- -------------- --------------
Operating loss (2,199,926) (1,893,325) (3,859,598)
Financial income 5,822 18,162 30,734
Loss before tax (2,194,104) (1,875,163) (3,828,864)
Taxation 215,274 203,423 357,896
Loss for period/total comprehensive
income attributable to owners
of parent (1,978,830) (1,671,740) (3,470,968)
Loss per share
Basic and diluted 2 (0.03) (0.03) (0.05)
-------------- -------------- --------------
The results from the periods shown above are derived entirely
from continuing operations.
Consolidated balance sheet as at 31 October 2016
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Oct 2016 31 Oct 2015 30 Apr
2016
Notes GBP GBP GBP
------------------------------------ ------- ------------- ------------- -------------
ASSETS
Non current assets
Intangible assets 9,088 22,102 15,595
Property, plant and equipment 405,573 486,540 399,324
------------- ------------- -------------
Total non current assets 414,661 508,642 414,919
------------- ------------- -------------
Current assets
Trade and other receivables 674,539 525,374 517,695
Current tax receivable 240,274 175,000 375,000
Other financial assets - bank
deposits 1,406,305 536,461 -
Cash and cash equivalents 5,665,033 4,005,500 2,997,412
------------- ------------- -------------
Total current assets 7,986,151 5,242,335 3,890,107
------------- ------------- -------------
Total assets 8,400,812 5,750,977 4,305,026
------------- ------------- -------------
Issued capital and reserves attributable
to owners of parent
Issued share capital 676,511 663,779 663,911
Share premium 23,295,150 17,467,077 17,470,417
Capital restructuring reserve 6,486,077 6,486,077 6,486,077
Retained earnings (22,914,012) (19,673,197) (21,213,507)
------------- ------------- -------------
Total equity 7,543,726 4,943,736 3,406,898
------------- ------------- -------------
LIABILITIES
Current liabilities
Trade and other payables 707,086 657,241 748,128
Provisions 150,000 150,000 150,000
------------- ------------- -------------
Total liabilities 857,086 807,241 898,128
------------- ------------- -------------
Total equity and liabilities 8,400,812 5,750,977 4,305,026
------------- ------------- -------------
Consolidated cash flow statement for the six months ended 31
October 2016
Unaudited Unaudited Audited
Six months Six months Year
ended ended ended
31 Oct 2016 31 Oct 2015 30 Apr 2016
GBP GBP GBP
------------------------------------------- ------------- ------------- -------------
Cash flows from operating activities
Loss before taxation (2,194,104) (1,875,163) (3,828,864)
Adjustments for:
Amortisation 6,507 8,017 14,524
Depreciation 99,926 143,154 257,274
Equity settled share based payments 278,326 93,373 352,291
Loss on disposal of plant, property
and equipment (30,129) - 1,049
Net financial income (5,822) (18,162) (30,734)
------------- ------------- -------------
Operating cash flow before changes
in working capital, interest and
taxes (1,845,296) (1,648,781) (3,234,460)
Decrease/(increase) in trade and
other
receivables (121,844) 17,138 (26,432)
Increase /(decrease) in trade and
other payables (41,043) (71,630) 19,257
------------- ------------- -------------
Cash utilised by operations (2,008,183) (1,703,273) (3,241,635)
Tax received 315,000 287,018 287,018
------------- ------------- -------------
Net cash flow from operating activities (1,693,183) (1,416,255) (2,954,617)
Cash flows from investing activities
Interest received 5,822 18,162 36,456
Sale of property plant and equipment 30,129 - -
Purchase of property, plant and equipment (106,175) (68,996) (96,949)
(Increase)/ Decrease in other financial
assets (1,406,305) (8,112) 528,349
------------- ------------- -------------
Net cash used in investing activities (1,476,529) (58,946) 467,856
Cash flows from financing activities
Proceeds from issuance of ordinary
share capital 5,837,333 1,666 5,138
------------- ------------- -------------
Net cash from financing activities 5,837,333 1,666 5,138
------------- ------------- -------------
Net (decrease)/ increase in cash
and cash equivalents 2,667,621 (1,473,535) (2,481,623)
Cash and cash equivalents at the
start of the period 2,997,412 5,479,035 5,479,035
Cash and cash equivalents at the
end of the period 5,665,033 4,005,500 2,997,412
============= ============= =============
Consolidated statement of changes in equity (unaudited)
Share premium Capital
account restructuring Retained
Share capital reserve earnings Total
GBP GBP GBP GBP GBP
----------------------- ---------------- -------------- --------------- -------------- --------------
As at 30 April
2015 663,748 17,465,442 6,486,077 (18,094,830) 6,520,437
Issue of shares 31 1,635 - - 1,666
Share based payment - - - 93,373 93,373
Loss and total
comprehensive income - - - (1,671,740) (1,671,740)
As at 31 October
2015 663,779 17,467,077 6,486,077 (19,673,197) 4,943,736
Issue of shares 132 3,340 - - 3,472
Share based payment - - - 258,918 258,918
Loss and total
comprehensive income - - - (1,799,228) (1,799,228)
-------------- --------------
As at 30 April
2016 663,911 17,470,418 6,486,077 (21,213,508) 3,406,898
Issue of shares 12,600 6,287,400 - - 6,300,000
Expenses of share
issue (462,668) (462,668)
Share based payment - - - 278,326 278,326
Loss and total
comprehensive income - - - (1,978,830) (1,978,830)
-------------- --------------
As at 31 October
2016 676,511 23,295,150 6,486,077 (22,914,012) 7,543,726
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 2016 does
not constitute the full statutory accounts for that period. The
Annual Report and Accounts for 30 April 2016 have been filed with
the Registrar of Companies. The Independent Auditors' Report on the
Annual Report and Accounts for 2016 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 2016, amounted to GBP7.1m. 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 2016 31 Oct 2015 30 Apr 2016
Number Number Number
----------------------------------- ------------- ------------- -------------
Weighted average number of equity
shares 67,144,371 66,375,158 66,378,114
GBP GBP GBP
----------------------------------- ------------- ------------- -------------
Loss, being loss after tax (1,978,830) (1,671,740) (3,470,968)
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 -
This information is provided by RNS
The company news service from the London Stock Exchange
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