REG - Ilika plc - Half-year Report
23/01/2024 07:00
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RNS Number : 5228A Ilika plc 23 January 2024
23 January 2024
Ilika plc
('Ilika,' the 'Company,' or the 'Group')
Half-year Report
Further milestones achieved for Stereax & Goliath, on the pathway towards
commercialisation
Ilika (AIM: IKA), a pioneer in solid-state battery technology, announces its
unaudited half-year report for the six months ended 31 October 2023.
Operating Highlights:
During the period, significant progress has been made with both Ilika's
thin-film Stereax(Ò) miniature solid-state batteries (SSBs) for powering
medical devices and industrial wireless sensors in specialist environments,
and its large-format Goliath cells for electric vehicles (EV) and cordless
appliances.
Stereax
· Completed first customer shipments of stacked M300 batteries from UK
pilot manufacturing facility.
· Entered into technology transfer and ten-year licensing agreement
with US-headquartered Cirtec.
· Dispatched key equipment required to manufacture Stereax cells at
Cirtec to its US facility; cathode manufacturing will initially remain at
Ilika in the UK as a sub-contract service to Cirtec.
· Continued collaboration with Cirtec to support the development plans
and launch schedules of the portfolio of 20 Stereax customers.
Goliath
· Significant development milestones achieved on technology roadmap.
· Production scale-up progressing.
· Continued execution of the Faraday Battery Challenge 24-month, £8.2m
grant-funded HISTORY project, steered with input from BMW and Fortescue WAE.
· Production-intent equipment trialled at vendor sites and at its pilot
facility.
· Secured the Automotive Transformation Fund 16-month, £2.7m
grant-supported SiSTEM project, in which Ilika is collaborating with Mpac plc
and UK Battery Industrialisation Centre (UKBIC).
· Continued interaction with a portfolio of automotive and consumer
appliance original equipment manufacturers (OEMs) globally, resulting in a
pipeline of evaluation agreements with 17 companies.
Financial Summary:
· Total revenue for the period of £1.3m (H1 2023: £0.2m)
· Grant funding of £1.3m (H1 2023: £0.2m)
· EBITDA loss, excluding share-based payments, of £1.9m (H1 2023:
£4.1m loss)
· Cash & Cash equivalents at period end of £13.2m (H1 2023:
£18.6m)
Post Period End:
· Completed key design-freeze D4 development milestone, the precursor
to P1, the first prototype for customer release of the Goliath battery.
· Achieved lithium-ion energy density parity in its Goliath programme.
Outlook:
· Signed contract with Cirtec represents most immediate
commercialisation opportunity, allowing fulfilment of order book and creating
further opportunities for commercial engagement.
· Well-developed plans to move Ilika's Goliath roadmap to the next
stage, MVP, aiming to reach the D8 development milestone by the end of the
HISTORY programme grant in Q1 2025, underpinning licencing opportunities.
· First half of this calendar year Ilika will manufacture and test
batches of pouch cells based on the D4 development point prior to delivering
fully characterised P1 cells to customers.
· Plans to increase the capacity of the Company's existing pre-pilot
production facility using automation and larger scale items of equipment.
· Targets to reach an installed capacity of 1.5 MWh/a to allow Ilika 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.
· Commercial interest and government grant support expected to
intensify as the Goliath product continues to mature.
Commenting on the results Graeme Purdy, CEO of Ilika, said: "The first half
of this year was important for Ilika on both sides of the business. We were
delighted to successfully convert our memorandum of understanding with Cirtec
into a ten-year licensing arrangement. Both companies are now working hard to
implement Stereax manufacturing at Cirtec's facility in the US. This has the
potential to open up many more business opportunities in miniature medical
devices, given Cirtec's position as an industry leader as a strategic
outsourcing partner of complex medical devices.
"Regarding Goliath, we have successfully delivered against our technology
roadmap, with two key milestones achieved at the end of 2023. Having reached
lithium-ion energy density parity, and continuing to work towards further
energy and power density milestones, we have proved that our batteries stand
to deliver the clear benefits of solid-state architecture, and from here we
will continue to pursue further energy and power density milestones. Against a
backdrop of continually growing recognition of the importance of the EV
sector, from both business and government, we look forward to building on this
momentum and developing closer commercial relationships in 2024."
Analyst Briefing
The management team will be hosting a hybrid analyst briefing today at 9.30am.
Analysts who wish to attend should contact Nick Rome at Walbrook PR on
+44(0)20 7933 8780 or email ilika@walbrookpr.com to register.
Investor Presentation
An investor presentation will be held this afternoon at 4.30pm and will be
hosted through the digital platform, Investor Meet Company. Investors can
sign up to Investor Meet Company for free and add meet Ilika plc via the
following link:
https://www.investormeetcompany.com/ilika-plc/register-investor
(https://urldefense.proofpoint.com/v2/url?u=https-3A__www.investormeetcompany.com_ilika-2Dplc_register-2Dinvestor&d=DwMFAg&c=euGZstcaTDllvimEN8b7jXrwqOf-v5A_CdpgnVfiiMM&r=1OI9eWQUVfVpxZXWzxX2tPcSAmxw5YMa3-DImHWnbkA&m=22nIVAzynQ78VnYQ8pNvYLoiaC3r3JGnA0Gjs0X1HfI&s=GFcaJdt_WBmGcV6u2cZxJzgNoqqkh-ky8V45ELknGH8&e=)
. For more information, please contact Walbrook PR at ilika@walbrookpr.com
(mailto:ilika@walbrookpr.com) .
For more information contact:
Ilika plc www.ilika.com (http://www.ilika.com/)
Graeme Purdy, Chief Executive Officer Via Walbrook PR
Jason Stewart, Chief Financial Officer
Liberum Capital Limited (Nomad and Joint Broker) Tel: 020 3100 2000
Andrew Godber,
Nikhil Varghese
Joh. Berenberg, Gossler & Co. KG (Joint Broker) Tel: 020 3207 8700
Matthew Armitt, Mark Whitmore, Detlir Elezi,
Mara Grasso
Walbrook PR Ltd Tel: 020 7933 8780 / Ilika@walbrookpr.com
Nick Rome, Charlotte Edgar, Joe Walker
About Ilika plc - https://www.ilika.com (https://www.ilika.com/)
Ilika specialises in the developing and commercialisation of solid state
batteries. The Company's mission is to rapidly develop leading-edge
IP, manufacture and license solid state batteries for markets that cannot be
addressed with conventional batteries due to their safety, charge rates,
energy density and life limits. The Company achieves this by using
ceramic-based lithium-ion technology that is inherently safe in manufacture
and usage, higher thermal tolerance and easier to recycle which
differentiates our products from existing batteries.
The Company has two product lines. Its Stereax batteries which are designed
for powering miniature medical implants, industrial wireless sensors and
specialist internet of Things (IoT) applications and the Goliath large format
batteries designed for EV cars and cordless appliances.
Joint Chairman's and CEO's Statement
Review of Period
Principal Activities
Ilika continues to pursue its mission to rapidly develop leading-edge
intellectual property (IP), manufacture at pilot scale and license SSBs for
high performance markets. We will achieve this using ceramic-based lithium-ion
technology, which differentiates our products from existing batteries by
offering competitive energy density and charge times, while being inherently
safe in manufacture and usage and easier to recycle.
Ilika has two product lines: miniature Stereax® SSBs for powering medical
devices and industrial wireless sensors in specialist environments, and large
format Goliath SSBs for EVs 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 solutions in a form factor not currently achievable 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), 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 degrees Celsius).
Stereax Manufacturing and Commercialisation
Ilika successfully made initial batches of Stereax M300 batteries and shipped
them to customers from its UK pilot manufacturing facility in May 2023. By
August 2023, Ilika had progressed the MOU signed in January 2023 with Cirtec,
to a full commercial agreement. Cirtec is an industry-leading strategic
outsourcing partner of complex medical devices including minimally invasive
and active implantable devices. Ilika and Cirtec have signed a ten-year
manufacturing licence for the production of the Stereax range of mm-scale
batteries at Cirtec's facility in Lowell, Massachusetts, US.
Contract headlines include:
· Exclusivity for Cirtec in the field of medical devices designed to
drive full utilisation of Cirtec's installed capacity.
· Profit sharing during the initial period followed by royalty-bearing
manufacturing aligned with industry norms, calculated on individual battery
volumes.
· Retention of the cathode deposition process and back-end battery
formation at Ilika's UK pilot facility as a sub-contract service to Cirtec.
· Transfer of machine sets to the US for Cirtec to operate on loan,
to enable a quicker technology transfer and qualification process.
Ilika has now dispatched the Stereax machine sets and Cirtec is in the process
of installing them in its Lowell facility. The Company continues to work with
Cirtec to support a portfolio of 20 current Stereax customers. Demand from
applications such as smart orthopaedics, orthodontics, neurostimulation and
smart contact lenses has created opportunities in the medical device sector,
which is the sector generating the strongest demand and accordingly we are
increasing our commercial collaboration alongside Cirtec in the year ahead.
Commercial ramp up in this space usually takes three to five years, depending
on the regulatory classification of the device.
Large Format Goliath SSBs
Ilika's Goliath cells are differentiated from other solid-state prototype
cells through the Company'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 distinct 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. To address
this market, Ilika is driving forward its Goliath development programme. In
November 2023, Ilika reached a point of maturity it refers to as its D4
development point, which is a design-freeze milestone in the Goliath roadmap
upon which Ilika's first prototype for customer release, P1, is based. The P1
prototype is an intermediate milestone on Ilika's roadmap to its minimum
viable product (MVP) in 2025. The P1 Goliath prototype is a solid-state pouch
cell made from readily available materials including a
lithium-nickel-manganese-cobalt oxide (NMC) cathode and a silicon anode.
Reaching the D4 development point is an important milestone for the Company,
effectively marking the start of Goliath's productisation journey; it means
that a number of key data sets, including energy density and power density,
have been met while showing that the Company is on track to achieve further
improvements. Given the data sets that are now achievable, the Company will be
able to create P1 samples, which comprise multilayer stacks, for sale to OEMs
for testing.
Over the first six months of calendar year 2024, Ilika will manufacture and
test batches of pouch cells based on the D4 development point prior to
delivering fully characterised P1 cells to customers in H2 2024.
In parallel, Ilika has continued to progress its roadmap, and in December 2023
it was able to announce it had reached its 2023 stated intermediate technology
development target of lithium-ion energy density.
Ilika is currently in discussions with its customer base for Goliath
batteries, which is primarily automotive OEMs, but also includes Tier 1
automotive suppliers and consumer appliance companies.
Work is continuing on Ilika's roadmap through to MVP, for which the
corresponding D8 development point will be achieved by the end of the HISTORY
project in Q1 2025. The MVP, or P2 prototypes, will be cells meeting
customer-agreed specifications for EVs, underpinning licensing opportunities.
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, to provide larger volumes of
evaluation cells to customers. Ilika is targeting an installed capacity of 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 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 UKBIC to scale to higher levels of production capacity on production-intent
equipment i.e., equipment that could be used for mass production.
Goliath Funding
Ilika has financed its Goliath technology development programme with equity
funding supplemented by grant funding from the Faraday Battery Challenge (FBC)
and the Advanced Propulsion Centre (APC). In the first half of the current
financial year, Ilika's development efforts have been supported specifically
by the FBC 24-month, £8.2m grant-funded HISTORY project, steered with input
from BMW and Fortescue WAE, to integrate high silicon content electrodes into
Goliath. In parallel, Ilika has been trialling production-intent equipment at
vendor sites and its pilot facility in the UK. Since October 2023, this
scale-up work has been supported by the Automotive Transformation Fund
16-month, £2.7m grant-supported SiSTEM project, in which Ilika is
collaborating with Mpac plc and UKBIC.
Furthermore, Ilika continues to interact with a portfolio of 17 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.
Graeme Purdy, CEO
Keith Jackson, Chairman
Ilika plc
Consolidated statement of comprehensive income for the six months ended 31
October 2023 (unaudited)
Unaudited Unaudited Audited
Six months ended Six months ended Year
31 Oct 2023 31 Oct 2022 ended
30 Apr 2023
Notes £ 000's £ 000's £ 000's
Turnover 1,335.0 203.7 702.0
Revenue 6.5 - 33.8
UK grants 1,328.6 203.7 668.2
Cost of sales (924.8) (120.5) (404.0)
Gross profit 410.3 83.3 298.0
Other Operating Income 77.4 44.2 79.0
Administrative expenses
Administrative expenses (3,280,2) (4,940.3) (8,932.6)
Share-based payment charge (292.0) (212.7) (441.8)
(3,572.2) (5,153.0) (9,374.4)
Operating loss (3,084.4) (5,069.7) (8,997.5)
Financial income 180.6 6.3 105.7
Financial expense (20.4) (18.3) (36.6)
Loss before tax (2,924.3) (5,037.5) (8,928.4)
Taxation 337.6 958.2 1,632.5
Loss for period/total comprehensive income attributable to owners of parent
(2,586.7) (4,079.3) (7,296.0)
£ £ £
Loss per share
Basic and diluted 2 (0.02) (0.03) (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 Unaudited Audited
Six months ended Six months ended Year
31 Oct 2023 31 Oct 2022 ended
30 Apr 2023
Notes £ 000's £ 000's £ 000's
ASSETS
Non-current assets
Intangible assets 3,358.0 2,426.9 2,943.5
Property, plant and equipment 3,932.3 4,831.6 4,263.6
Right-of-use assets 367.1 761.1 631.0
Total non-current assets 7,657.5 8,019.6 7,838.0
Current assets
Trade and other receivables 1,847.2 1,661.4 1,938.6
Current tax receivable 1,676.1 2,019.3 1,261.1
Other financial assets - bank deposits 5,000.0 772.7 772.7
Cash and cash equivalents 8,236.0 17,838.0 15,101.0
Total current assets 16,759.3 22,291.3 19,073.3
Total assets 24,416.8 30,310.9 26,911.3
Issued capital and reserves attributable to owners of parent
Issued share capital 1,590.6 1,584.7 1,590.6
Share premium 64,935.1 64,806.9 64,936.6
Capital restructuring reserve 6,486.1 6,486.1 6,486.1
Retained earnings (50,535.8) (45,253.5) (48,241.1)
Total equity 22,476.0 27,624.2 24,772.2
LIABILITIES
Current liabilities
Trade and other payables 1,168.1 1,705.3 1,271.1
Lease liabilities 205.7 281.5 260.8
Total current liabilities 1,373.7 1,986.8 1,531.9
Non-current liabilities
Lease liabilities 317.5 459.6 357.6
Provisions 249.5 240.4 249.5
Total non-current liabilities 567.0 699.9 607.2
Total liabilities 1,940.8 2,686.7 2,139.1
Total equity and liabilities 24,416.8 30,310.9 26,911.3
Consolidated cash flow statement for the six months ended 31 October 2022
(unaudited)
Unaudited Unaudited Audited
Six months ended Six months ended Year
31 Oct 2023 31 Oct 2022 ended
30 Apr 2023
£ 000's £ 000's £ 000's
Cash flows from operating activities
Loss before taxation (2,924.3) (5,037.5) (8,928.4)
Adjustments for:
Amortisation 20.8 21.7 42.2
Depreciation 919.5 767.6 1,552.8
Equity settled share-based payments 292.0 212.7 441.8
Loss on disposal of plant, property and equipment - (0.8) (0.8)
Net financial expense/ (income) (160.2) (32.2) (69.1)
Operating cash flow before changes in working capital, interest and taxes (1,852.2) (4,068.5) (6,961.5)
Decrease/(increase) in trade and other
receivables 91.3 (67.1) (454.0)
Increase /(decrease) in trade and other payables (103.0) 297.9 (136.3)
Decrease in provisions - - 9.2
Cash utilised by operations (1,863.8) (3,837.7) (7,542.7)
Tax received (77.4) - 1,388.2
Net cash flow from operating activities (1.941.2) (3,837.7) (6,154.5)
Cash flows from investing activities
Interest received 180.6 6.3 106.0
Purchase of intangible assets (435.4) (490.5) (1,027.5)
Purchase of property, plant and equipment (324.4) (396.7) (374.0)
Sale of Property, Plant and equipment - 0.8 0.8
Increase in other financial assets (4,227.3) - -
Net cash used in investing activities (4,806.5) (880.2) (1,295.0)
Cash flows from financing activities
Proceeds from issuance of ordinary share capital (1.5) 54.4 189.9
Cost of share issue - - -
Capital element of finance leases repaid (95.3) (106.5) (229.1)
Lease Payments interest (20.4) (18.3) (36.6)
Net cash from financing activities (117.2) (70.4) (75.8)
Net (decrease)/ increase in cash and cash equivalents (6,864.9) (4,788.3) (7,525.3)
Cash and cash equivalents at the start of the period 15,101.0 22,626.3 22,626.3
Cash and cash equivalents at the end of the period 8,236.0 17,838.0 15,101.0
Consolidated statement of changes in equity (unaudited)
Share premium account Capital
Share capital restructuring reserve Retained earnings
Total
£ 000's £ 000's £ 000's £ 000's £ 000's
As at 30th April 2022 1,582.3 64,754.9 6,486.1 (41,386.9) 31,436.4
Share-based payment - - - 212.7 212.7
Issue of Shares 2.4 56.1 58.5
Loss and total - (4,079.3) (4,079.3)
comprehensive income
As at 31 October 2022 1,584.7 64,811.0 6,486.1 (45,253.5) 27,628.3
Share-based payment - - - 229.1 229.1
Issue of shares 5.9 125.6 - - 131.5
Loss and total
comprehensive income - - - (3,216.7) (3,216.7)
As at 30th April 2023 1,590.6 64,936.6 6,486.1 (48,241.1) 24,772.2
Share-based payment - - - 292.0 292.0
Issue of shares - (1.5) - - (1.5)
Loss and total
comprehensive income - - - (2,586.7) (2,586.7)
1,590.6 64,935.1 6,486.1 (50,535.8) 22,476.0
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 2023 does not constitute
the full statutory accounts for that period. The Annual Report and Accounts
for 30 April 2023 have been filed with the Registrar of Companies. The
Independent Auditors' Report on the Annual Report and Accounts for 2023 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 2023, amounted to £13.2m, Including cash in hand at the bank (£8.2m)
and cash held on long term deposit shown as a financial instrument (£5m). 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 ended Six months ended Year
31 Oct 2023 31 Oct 2022 ended
30 Apr 2023
Number Number Number
Weighted average number of equity shares 158,580,748 158,309,838 158,395,116
£ 000's £ 000's £ 000's
Loss, being loss after tax (2,586.6) (4,079.3) (7,296.0)
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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