Graeme Purdy, CEO of Ilika plc LON:IKA, commented on the trading update: “We are continuing to see a reinforcement of our customer relationships, with long-standing partnerships with companies like Toyota and Seagate being further cemented. It’s also great to see the upturn in revenues relative to last year allowing us to start 2017/18 with such a strong order book. The number of potential licensees, their level of interest and the diversity of applications is giving us growing confidence in our licensing model.”
Ilika (LON:IKA), a pioneer in materials innovation and solid-state battery technology, gave DirectorsTalk the following update on trading. Since its last trading update in November 2016, the Company has announced four significant commercial deals, which are resulting in a strong ramp-up of revenue relative to 2015/16 and which will continue to support revenue growth into 2017/18. We expect to start 2017/18 with a record level of revenue commitments amounting to around GBP1.8m.
Ilika’s stated business aim is to add licensing revenue to the development revenue it currently generates. While levels of interest are encouraging, predicting the timing of when these licenses will generate revenue remains a significant forecasting challenge for the Company. Given our proximity to the end of Ilika’s current financial year and the duration of negotiations with OEM potential licensees, it seems increasingly likely that revenue from licensing may first have an impact in 2017/18.
Stereax roadmap update
Ilika has continued to develop its Stereax intellectual property in accordance with its roadmap, which it updates in line with feedback from its pipeline of development partners. Earlier this month, Ilika confirmed that it had secured a partnership with the bioelectronics company Galvani Bioelectronics (“Galvani”), focused on optimising the Stereax platform for use in neurostimulators. Bioelectronics is a rapidly developing market with large opportunities that match the unique benefits that Stereax offers. Stereax’s high volumetric energy density, manufacturability at mm-scale and the ability to deliver pulses of power are ideal for such devices. Galvani is a particularly suitable partner, given the substantial technological and financial backing it has from its parent companies, GlaxoSmithKline and Verily (part of the Alphabet group, formerly known as Google).
Towards the end of last year, Ilika announced the start of a funded collaborative project with Sharp Laboratories of Europe (“Sharp”) to create a device consisting of an integrated Stereax(TM) solid-state battery and a photovoltaic panel, offering an autonomous energy harvesting device for wireless components. The initial concept was designed to address opportunities in automotive and wearables, but publicity around the project has also attracted interest from consumer goods companies looking for innovative ways to promote their products in retail outlets.
The next product milestone on Ilika’s Stereax roadmap is its industrial battery, code-named Endeavour, which will be able to operate in an extended temperature range covering -40 to 150 degree Celsius. This battery is designed to meet the requirements of Industrial IoT, sometimes called Industry 4.0. A discussion of applications is covered in our recently-posted video featuring Meggitt and IBM which can be found here – http://www.ilika.com/news/videos.
Materials development programmes
While the Company is deploying most of its operational and commercial resources on Stereax activities, it has also seen an increase in materials development programmes on its high throughput technology platform. Last month Ilika announced that it had received notification of a renewal of the commercial relationship it has with Seagate to develop photonic materials and processes for Hard Disk Drive (“HDD”) technology.
Ilika has also recently announced the renewal and strengthening of its long-standing relationship with Toyota. This has been triggered by the award of a contract by the Toyota Research Institute in the USA, which was founded at the end of 2015 with an initial focus on artificial intelligence, robotics and materials innovation.
The Company will announce a more detailed update on the outturn for 2016/17 in May prior to issuing its full year results in July.
