IP GROUP
Ilika (AIM: IKA), the accelerated materials innovation company, announces its unaudited half yearly report for the six months ended 31 October 2014, a period of continued progress with its solid state battery development programme, increased commercial interactions with its global customer base and strengthening of its IP portfolio.
Ilika accelerates the discovery of new and patentable materials using its unique high throughput technologies process for identified end uses in the energy, electronics, and aerospace sectors.
Operational Highlights
· Grant of two patents covering methods for producing solid state batteries
· 25 x increase in solid state battery size
· Proof of concept contract win with European partner for development of batteries for wireless sensor networks
· Keith Jackson, CTO of Meggitt plc, appointed as NED to the board
· Successful factory acceptance test of £3.3m pilot production line
Post Period End Events
· Official opening of pilot line by Rt. Hon Greg Clark MP
· 20 x larger deposition area of key battery materials
· 5 x increase in materials deposition rate
Financial Summary
· Total revenue for the period at £0.6m is in line with prior period (1H 2013: £0.6m)
· Loss per share has reduced to 2p (1H 2013: 3p per share)
· Net cash inflow in the period £0.1m (1H 2013: outflow £1.7m)
· Cash balance at period end £7.3m (1H 2013: £1.4m)
Commenting on the results Graeme Purdy, CEO of Ilika, said: "Ilika has continued to maintain both commercial and technical momentum since the exciting announcement in January of 2014 of its "world's first" for the fabrication of a solid state battery that can be manufactured as a continuous stack. By the summer of 2014, we were able to fabricate significantly larger batteries on a footprint that is commercially relevant for our initial target markets.
"Commercial interest has been strong from the leading players in sensor network technology as well as global OEM's, which are investing heavily in wearable technology. The remainder of this year will see our efforts focused on producing prototypes for our commercial partnerships."
Ilika plc
Graeme Purdy, Chief Executive
Steve Boydell, Finance Director
+44 (0)23 8011 1400
NUMIS Securities Limited
Oliver Cardigan/ Adrian Trimmings/
James Black
+44 (0) 20 7260 1000
Walbrook PR Ltd
+44 (0)20 7933 8780 or ilika@walbrookpr.com
Paul McManus (Media Enquiries)
Mob: +44 (0)7980 541 893
Paul Cornelius (Investor Enquiries)
Mob: +44 (0)7827 879 460
CEO's Statement
Review of Period
A World First for Ilika: Solid State Battery Technology
2014 started with the exciting announcement that Ilika had achieved a unique and simple methodology for producing a stacked solid state battery that is likely to lead to significant out-licensing opportunities for the Company. It was explained that solid state batteries are currently available, but are restricted to very small capacities, limiting their commercial relevance and market opportunity. Ilika's innovation enables its commercial partners to make larger batteries suitable for mainstream battery applications, including consumer electronics.
Electrochemical testing of the stacked cells was completed in Q1 2014, confirming that Ilika's proprietary process had generated performance data that validates the stacked architecture, with two-cell stacks producing twice the voltage and power of a single cell. Further work then proceeded to increase the cross sectional area of the cells in order to make prototype batteries suitable for initial commercialisation in wireless sensor networks, as part of the "Internet of Things".
By July 2014, Ilika was able to announce that it had achieved a 25x increase in battery size, making the batteries on a footprint relevant for commercial applications in wireless sensor networks (WSN) and wearables.
Pilot Line Commissioning
The next step was to complete the fabrication of a pilot line to allow the production of sufficient quantities of prototype batteries to allow commercial validation by chosen OEM partners. The pilot line produces batteries on a substrate which has a diameter of 15cm (6"), which is an area approximately 20 x larger than that used to initially develop the battery.
In September 2014, the Company announced it had signed off the factory acceptance test (FAT) of the pilot line. The next step was to disassemble the line, pack it and ship it to its destination in Southampton. This shipping process was successfully completed and it was re-assembled in time for an official opening in November 2014 by the Rt. Hon. Greg Clark MP, Minister for Science, Education and Cities.
At the time of issuing this half yearly report, the pilot line has substantially completed its site acceptance test (SAT). Official sign off is awaiting the delivery of a number of non-critical items included in the delivery scope of the principal system fabricator. The SAT has involved the production of the key materials making up a solid state battery. In particular, the battery production team has successfully deposited a functioning cathode over the complete 176 cm2 area of the standard 6" substrate. The batteries required for WSN and wearable applications will be made by masking (dividing up) this 176 cm2 area. In addition, the pilot line has been demonstrated to deposit materials 5x faster than Ilika's development workflow and a further doubling of that rate is expected to be achievable. This deposition rate has ensured that the batteries can be made at a price point that is commercially attractive on the industrial scale. Production cost models developed together with OEM's interested in Ilika's technology have demonstrated that the batteries can offer the expected technical benefits at a price point below incumbent technology.
Intellectual Property Reinforcement
Clearly, the successful execution of Ilika's business model requires a robust and comprehensive IP portfolio that can be licensed as a package. Hence, it was reassuring that in May 2014, the grant of two British patent applications jointly filed with Toyota was confirmed. These patents contained methodology for producing solid state batteries.
Commercial Progress
The commercialisation strategy for this technology involves three phases of engagement:
· optimisation of the battery architecture for specific applications
· validation and integration of the batteries into application systems
· technology transfer and licensing for manufacture
In the current financial year, the emphasis is on the first of these phases and therefore the announcement in July of a proof of concept contract with a European customer was an important indicator that this strategy was on track.
In October 2014, the announcement of the appointment of Keith Jackson, CTO of Meggitt plc, as Non-Executive Director was further evidence that the Company is preparing itself for commercialisation activities.
Portfolio Progress
Although the solid state battery programme makes up the majority of Ilika's technology development activities, the Company has a well-defined portfolio of opportunities at various stages of maturity.
One of the most advanced of these programmes is the commercialisation of platinum-free fuel cell catalysts. The Carbon Trust in 2012 funded the development of these catalysts through an equity investment. The Company has signed materials transfer agreements and delivered samples of the catalyst for confirmatory testing to OEMs in the USA, Japan and Europe. Initial feedback is encouraging and further testing is expected in this financial year. Post period end, Ilika received the news that its patent in Europe had not been opposed by any third parties in the statutory 9-month period after grant, resulting in Ilika having granted patents covering fuel cell catalyst technology in the USA, Japan and Europe.
An early stage technology programme at Ilika is the development of aerospace alloys. Ilika has announced collaborations with Rolls Royce and Boeing. Rolls Royce is interested in high temperature superalloys for use in aerospace engines, while Boeing is focused on high entropy alloys for deployment in aircraft structures. The Rolls Royce programme is supported by a £1.33 million grant from Innovate UK over a three year period, which started in April 2014.
Outlook
2015 promises to be an exciting year for Ilika, particularly for tackling the next steps in the development of the Company's solid state battery programme. Investors can expect to see announcements regarding both technical and commercial progress associated with the production of prototypes and the Company developing commercial relationships with OEM partners. The management team remains committed to bringing its technology programmes to successful conclusions to deliver attractive returns to its shareholders.
Graeme Purdy, CEO
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