News blog

Ilika

  • BY: Andrew Hore |
  • POSTED: 21/02/2013 |

Materials technology developer Ilika has renewed and extended a contract with an existing automotive customer for the further development of its battery technology.

The new contract is worth £160,000 and is in addition to a £330,000 contract announced in December. The contracts cover next generation batteries for hybrid vehicles.

This is good news following a disappointing first half to the financial year. Ilika had warned that contracts had been delayed and that it had lost a client so the fall in interim revenues was not a surprise. In the six months to October 2012, revenues fell from £745,000 to £392,000 and that meant that the loss increased from £1.39m to £1.87m. R&D spending was increased by £250,000 to £900,000. The figures exclude the wound care activities sold after the period end.

Energizer Battery Manufacturing Inc decided to end its battery project with Ilika, although this will have a greater effect on the second half. The delayed contract had a greater effect on the first half revenues. The business is second half weighted and Ilika’s full year revenues are likely to be 10% lower at £1.8m.

Ilika still has the right to exploit the foreground technology developed with Energizer and it is looking for new partners.

Ilika has developed efficient hydrogen storage technology with Shell and the patents have been filed. Samples have been made at Sigma-Aldrich’s Michigan factory and the manufacturing process is being improved. The product could be launched this year and there is a potential market worth £19m to Ilika. The fuel cell electrode using palladium instead of platinum will undergo a full automotive testing plan this year. Ilika is hopeful that the thin-film battery technology developed with Toyota could be commercialised in 2014.

House broker Numis does not expect Ilika to move into profit in the next three years but commercialisation of any one of the products could change that.

There was £3.55m in cash at the end of October 2012. Numis believes that there will still be £2.5m in the bank at the end of April 2013 but it will all be gone 12 months later unless the cash outflow is stemmed.

At 37p a share, down 2.5p, Ilika is valued at £17m.

Download the latest AIM Journal from http://www.hubinvest.com/AIMPDFFebruary2013_41.pdf

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