Ilika share price, company news, analysis and interviews

Ilika plc (LON:IKA) is the topic of conversation when Baden Hill Partners’ Clean-Tech Equities Specialist Dr Tom McColm caught up with DirectorsTalk for an exclusive interview.

Q1: Tom, Ilika have announced their results for 2024. What did you make of them?

A1: The numbers were as expected, maybe a little bit more grant revenue than normal that kept the cash burn down a bit, but really the numbers at the moment aren’t the most important thing.

What was very interesting was the progress that’s been delivered in the period and post-period on both the Stereax and particularly the Goliath side of the business.

Q2: So, if we look at the Goliath side then first, what milestones were delivered in and post-period and why were they important?

A2: Goliath is the solid-state battery cells for EVs, as you know, the bigger batteries that Ilika are doing. In the period, they hit what’s called a D4 design freeze, quite an important point where they froze the design, where they reached the level of performance that hit that, and then they turned that into a P1 prototype of that D4 design. So that was quite a landmark on the whole commercialisation journey.

Just shortly after that, at cell level, the pouch cell, they achieved energy density parity with incumbent lithium-ion EV batteries. Now that’s, it’s a bit of a symbolic thing, but that’s only going to get better, as they evolve. It means that their batteries will get more energy into a smaller space and that’s on top of the inherent safety and system advantages that solid-state batteries bring. That’s why everyone chases after them.

Post-period, probably the most important and relevant thing was that the P1 prototypes have been getting shipped to a couple of their tier one automotive customers for testing.

One of those customers, the testing and evaluation is being conducted in-house at Ilika, but the other they’re conducting it themselves. So, they have actually got EV solid-state batteries into customer hands for testing on their own sites, which is quite a landmark.

Q3: What progress was made on the micro format, the Stereax program? Y

A3: Stereax program, it’s probably a little bit ahead in terms of getting to revenue. First batches of Stereax M300 were shipped to customers for evaluation from the UK facility.

In the period, they, I think we covered this interim, but very good news that they agreed and entered into a 10-year licensing and technology transfer agreement with US MedTech partner, Cirtec, because Stereax’s is by far most value-add markets are in these medical device applications, of which Cirtec are a very decently sized player in the US

They also executed the equipment, the production equipment transfer installation, and they’re pretty much through the commissioning phase of that, so that Cirtec can start producing IKA’s batteries in the States at scale and then ramp that up.

So again, to emphasise, I think the key thing in both sides of the business in this period, they have got their battery technology out of their labs and into real customer hands for testing and evaluation, which is a good development.

Q4: With that in mind then, what should investors and potential investors be looking out for from Ilika over the next 12 months?

A4: On the Stereax side, completion of the Cirtec Stereax production commissioning, and then more shipments of Stereax, batches of Stereax to their customers, I think they’ve got 21 customers via Cirtec that they’re engaging with, so more shipments to those customers, potentially more customers coming online via Cirtec, and possibly, mid- where are we now. So if we go into mid-‘25, some early Stereax revenues, both from the bit that Ilika makes in-house and from Cirtec selling the devices themselves.

On the Goliath side, just more of the same, further customer trials and evaluation and more progress, like I said, they hit the D4, P1, the next big step on that journey is, I think, the D8 and the second prototyping stage. They’re going to be moving towards that and hopefully achieve that on their journey towards the minimum viable product in that market.

Once you’re up at those levels then the commercial conversations get very interesting, so that’s what people should be looking out for.

Ilika plc (LON:IKA) Chief Executive Officer Graeme Purdy caught up with DirectorsTalk for an exclusive interview to discuss their relationship with Cirtec, P1 cells milestone, regulatory outlook, further opportunities for grant support, and the key challenges in the coming year.

Q1: Cirtec, it’s featured prominently this year. How is the relationship progressing and what’s still to come?

A1: It’s a great relationship. Just to recap, of course, we entered into a 10-year licensing agreement with them last year and we transferred our pilot line production kit across to their facility in Lowell, Massachusetts.

They have now substantially completed the installation of that equipment and have demonstrated that they have commissioned it in a way that it needs to operate in order to make our Stereax batteries.

So there’ll be a bit of news flow later on in the summer confirming that installation, that everything’s ready to start making the engineering lots and as we get towards the end of the year, we will start production of our next M300s with a view to start sending them to customers in 2025.

Q2: How big a milestone is the delivery of P1 cells for Ilika?

A2: So, talking about Goliath now, the P1 cells, that’s really been the culmination of a fantastic avalanche of achievements from the team over the last six months or so.

Remember at the end of last year, we announced our D4 development milestone, which was a design freeze to allow us to manufacture and test a batch of our P1 prototype cells, which we successfully did. And actually there’s been two bits of news around that.

On the one hand, we’ve commenced a customer sponsored in-house test program. So, one of our customers has said, well Ilika, you guys have got all the test equipment you need to do this for us, we will sponsor you to do that testing at your own facility.

On the other hand, the most recent press release that we sent out was indeed the delivery of a batch of those P1 cells to a customer that’s paid for them and wants to actually test them in-house at their own facility.

So, that’s basically an indication that we’ve successfully validated that P1 prototype, and I think investors can take a lot of comfort from that.

Q3: Does the regulatory outlook still look positive?

A3: Yes, I think actually with the new government here in the UK, we’re going to see a bit of a resurgence of enthusiasm for the net zero agenda. I think the regulatory environment, both here in the UK and more broadly, is very conducive to EVs and the adoption of our Goliath technology.

Q4: Now, you mentioned that you expect to see further opportunities for grant support in the future. What can investors expect there?

A4: First of all, really a very strong vote of thanks for the support that we’ve had from the Faraday Battery Challenge and also the Advanced Propulsion Centre, who have been the sources of two significant grants for us.

On the one hand, with the FBC, we have had the HISTORY program, which has been running since Q1 of 2023, and is a two-year program so that’ll run until Q1 of 2025. That’s really enabled us to work together with some of the leading universities here in the UK, with also collaboration with the CPI, Centre for Process Innovation, and HSMI, a consultancy that’s allowed us to do a full life cycle analysis, as well as our silicon anode supply partner, Nexeon, and under the supervision, actually, of Fortescue, WAE, and BMW. That’s been really great in terms of supporting our Goliath program.

Secondly, of course, the more recent grant support that we’ve had to work together with UKBIC and MPAC in order to develop our assembly line. That’ll give us a great capability to be able to produce up to 1.5 megawatt hours of prototypes per year at our facility.

Looking forward, we’ve got a great scale-up story as we move forward through to the later development points, and then our P2 prototypes by the end of 2025. So, great support, really, from those grant bodies in order to get us to where we’ve got to now, and also looking forward.

Q5: Finally, what hurdles will Ilika contend with in the coming year, do you think?

A5: Well, I think key challenges for us will be to deliver on those Goliath development points. It’s not everybody in the world that can do this.

We have a unique value proposition in terms of the capabilities of our Goliath batteries, some great safety data coming out that we’ll talk about later on in this current calendar year, and we need to translate that into larger batteries.

Our P1 batteries are a two-amp-hour battery. We are gradually making bigger and bigger batteries that we’re sharing with our partners and we’ll need to incorporate their feedback and the test results that we get from that scale-up into our designs.

We’ve got very supportive shareholders and we’ve also got a lot of grant support that we’re just talking about. So, I think the augers are looking very positive at the moment.

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