Ilika (LSE: IKA) makes solid-state batteries, and it can be bought for penny share prices. Its technology could be big in the kind of distributed processing that will likely contribute to the future of AI — among a range of other applications.
As I write just before markets open on Tuesday (26 August), we’re looking at a market cap of £72m and a 40p share price. That represents an 86% gain just since the start of 2025. But before we think too much about what the future might hold, there’s one note of caution.
Back in 2021, the shares reached 280p. So anyone who bought at the peak is now down 85% overall — even after this year’s gain. But new tech like this often needs a second wind to really get started. And AI attracts more attention now than four years ago.
What’s the excitement?
On 18 August, Ilika announced a milestone with US strategic partner Cirtec Medical, a company developing next-generation medical devices. The news release said: “The companies have successfully completed process qualification for the Stereax M300 micro-battery production line at Cirtec Medical’s facility in Lowell, Massachusetts.”
This, apparently, is the final technical validation needed before production can start.
It comes after CEO Graeme Purdy told us at full-year results time in July that “Ilika has achieved a significant number of important technical and commercial milestones over the past twelve months.“
The company’s next major moves include getting its electric vehicle battery technology, Goliath, to viable product status by the end of 2025, which means completing prototypes and getting them to customers for testing.
We should also hopefully see the recognition of Stereax revenues commence in the current calendar year.
A no-brainer buy?
So, is it time to rush out and buy then?
Before anyone considers it, there’s one key drawback — there’s no profit. The year ended 30 April saw just £1.1m in revenue, with an EBITDA loss of £5.2m.
But there was cash and equivalents of £8m on the balance sheet at the time. After the end of the period, the company raised £4.2m gross from a fundraising. And it received a £1.25m grant from the UK government’s DRIVE35 programme, which funds R&D in vehicle electrification.
This all suggests there’s enough liquidity for a while yet. But analysts still forecast losses for at least the next two years. And they see the cash pile dwindling to around £1m by 2027.
It seems likely that Ilika could need more funding before the profit taps open. And that could well lead to dilution for investors who take the plunge today.
The dilemma
This is the same dilemma that’s faced countless investors in potential high-tech growth stocks while they’re still in the ‘jam tomorrow’ phase. And for me, it usually means I steer clear and don’t consider buying until I see first profit.
But in this case, based on Stereax batteries hopefully generating sales in the near term, I’m actually pondering a small investment. I think penny share growth investors should consider it too.
