Ilika Plc Regulatory News (IKA)

Ilika plc

("Ilika" or the "Company")

Half Year Trading Update

Ilika (AIM: IKA), the advanced cleantech materials discovery company, announces a trading update for the six months ended 31 October 2012. 

Financial Review

The Company expects total revenue for the year ending 30 April 2013 to show approximately 20% year-on-year growth on its continuing activities which no longer include the wound care business as announced in September 2012.

Turnover from operations for the period will be lower than the comparative period for last year at around £0.5m (H1 2011: £0.8m). Historically, the first half of Ilika's financial year, spanning the summer period, has delivered lower revenues than a proportional split of the full year would predict. Discussions with customers, which have moved relatively slowly over the summer, are maturing into firm contracts, which are now expected to contribute to higher levels of revenue in the second half. Grant income of around £20k (H1 2011: £200k) reflects the fact that support from the Carbon Trust in the period was received as an equity investment of £149,380 rather than as a grant.

The balance sheet remains strong with cash and cash equivalents expected to be no less than £3.5m at the half year period end (as at April 2012: £5.3m). The funds raised earlier in the year remain ring-fenced for the development of its thin film battery technology. Progress is currently on track with the company due to publish its initial technical results in Q1 2013.

Operational Review

The Company continues to see strong progress across the business including the renewal of the relationship with its largest customer for the development of lithium-ion battery technology. This will extend the relationship into the fifth successive year and more detailed announcements will be made in due course.

The recent press release from Toyota regarding the scaling back of its efforts to release all-electric vehicle models should be understood in the context of its ongoing commitment to expand its hybrid vehicle fleet. By 2015 it expects to have 21 hybrid models on sale. The need for improved battery technology for hybrid vehicles is underpinning Ilika's activities in this area.

Ilika's lead automotive partner has also commenced its assessment of the technical performance of Ilika's proprietary fuel cell catalysts. These discussions have resulted in initial samples being sent to them for confirmatory testing prior to designing a larger scale programme. Having made the initial sample of material available, Ilika has agreements in place to manufacture a larger batch for delivery in the first half of CY 2013, should the tests prove successful.

In addition, Ilika has secured a contract with a new UK customer in the energy sector for the development of energy conversion materials to increase energy utilisation efficiency.

Ilika will announce Interim Results for the six months ended 31 October 2012 on 10 January 2012.

ABOUT ILIKA

Ilika is an advanced materials company which accelerates the discovery of new and patentable materials using its unique high throughput technologies (''HTT'') process for identified end uses in the energy, electronics and biomedical sectors. This process enables hundreds of scalable materials to be made in a single, automated operation and subsequently tested for key properties.

Traditionally, materials development has been a slow and arduous task, with manual, sequential methods used to make samples of material that are then tested for suitability. On average, it takes between 7 and 10 years to move from an initial discovery through to the first commercial prototype. Experiments carried out by the Company can be executed 10 to 100 times faster than using traditional techniques.

The Company focuses on three principal sectors and has a number of active development programmes addressing markets within each sector:

Energy - developing innovative new materials for Lithium-ion batteries for vehicles for Toyota; developing high capacity hydrogen storage materials with Shell Hydrogen and Johnson Matthey through joint development programmes; developing cheaper alternatives to Platinum electrodes for use in fuel cells through a grant-funded project with the Carbon Trust; developing new materials for use in fuel cells for the transport sector for a major vehicle manufacturer; and carrying out in-house research on film photovoltaic solar cells.

Electronics - developing lead-free piezoelectric materials through a joint development programme with CeramTec; developing phase change memory materials for high capacity memory chips and high-performing electronic materials for a multi-national manufacturer.

Biomedical - developing polymers to enable the filtering of somatic stem cells from blood with a major global supplier of filters; it has been selling its Cryoskin and Myskin products for the treatment of burns and wounds in the UK through a specialist distributor and intends to commence clinical trials of its corneal bandage candidate.

The Group's commercialisation strategy is to enter into joint development or licensing agreements with large multinational companies which are seeking to commercialise products developed using the intellectual property created through jointly-funded programmes. Current commercialisation partners include large multinational companies such as Toyota, Shell, Johnson Matthey and CeramTec. The Company generates revenues from three sources: licensing and milestone payments from joint development programmes; fee for service from contract research projects; and from sales of Cryoskin and Myskin.