By Stewart Dalby

Back in the day, in June 2020. a group of AIM-listed-loss-making renewable energy companies for some reason saw their share prices starting ed to spike higher. This may have been because it was a nice sunny day and investors felt like lashing out. More likely, the price rises were because there was increasing recognition amongst investors that renewable  energy companies excellent capabilities as energy carriers and storage mediums.

This meant that investors would not have to worry too much about the loss-making but instead could focus on the potential of share price rises that could lie ahead. llika was one such company that fitted this analysis. The company was loss making but it was involved in the development of battery storage technologies. This was an area where it was perceived that involvement in such technologies development could bring about good news for shareholders In fact, it already had; in that in the month of June 2020 Ilika’s shares were selling at 50 pence, but Christmas time 2020 it the share price 250p. Some spike eh!

llika’s mini-batteries were originally spun out of the Chemistry Department of Southampton University in 2004 into a pilot scheme. By 2015 the pilot was heavily involved in the development of Stereax solid-state batteries such as the Stereax M250 and P180 IP models. The advantage of  these Stereax models is that unlike other lithium-ion batteries they have no liquid components. They have greater energy density, are faster charging and last longer Also, they are less flammable.

Ilika’s Stereax batteries

The early pilot production scheme was heavily funded by government grants. As the pilot scheme went on the company’s batteries began to pick up markets in areas like medical implants, the internet of things (lOT) and Electric vehicles (EVs). The EVs led to the company executing three collaborative projects with Honda, Toyota and Jaguar. These collaborative projects were funded by £5.2m of government grants.

Then, 2021 Ilika had an exciting step up in that it moved towards making solid-state batteries larger than the Stereax minis for electric lorries known as Goliaths. This meant that Ilika had two distinct but similar potentially revenue earning products in place. However, Graeme Purdy, Ilika’s CEO told Greenbarrel that under the pilot scheme the sales volume amounted to just 15,00 items per annum. He said he felt that it was time that the company should scale up its output. He added that the sales of the original stereax models could be increased by 70 times if a factory for such commercialisation was built.

As the Half Year report for the six months ended 31 October 2021 shows moves towards commercialization have been taking place. In July 2021 the company raised £25million through a combination of an equity placing, a retail offer and an open offer. Some of this money was used to buy a leased property of 1600 m3 in December 2021 at Chandlers Ford in southern England or a Stereax fabrication and production. Commercial sales are expected to start in 2023  after qualification in 2022.

As for the Goliath batteries some of the £25M (that is some £15m) is being used to accelerate the development of Goliath technology. Another part of the cash pile will be used to fund a tenfold increase in the Goliath pre-pilot line from 1kWh to 10kWH. The remainder will be for used for working capital purposes and to support Goliath development until 2023. Beyond that, once cell manufacturing readiness is achieved in 2024 Ilika will transfer production to a mega -scale facility.

So, investors will not have to wait for long for the good times to roll. House broker Baden Hill seems convinced the good times will roll. In a recent note it said: “Financial Year(FY) 2023 is expected to be a commercial breakthrough year as Ilika’s state -of- the-art Stereax manufacturing facility gets up to speed through Calendar Year (CY) 2022.

Here I must declare an interest. I don’t tip shares. But occasionally, having written so much about companies, I put my money where my mouth is. In this case in June 2020 I bought some Ilika shares at 50p.The shares have come off since June 2020. Last evening they stood at 140p, This is almost three times more than I bought them for. So I am not complaining.