Ilika Plc (ILIKF)

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Ilika
% change: +272.2

For a change, the best performer at the halfway stage did not just hang on to its early gains it moved even higher. There was a share price dip in line with the market during March, but there has been an upward trend for the whole year. Battery technology developer Ilika (LSE:IKA) has evolved its strategy for the manufacturing of its Stereax solid-state battery technology.

Stereax batteries are designed for wireless sensors and medical devices. Contract manufacturing was considered but management has decided to establish its own manufacturing facility. This will speed up the product launch and lead to improved operating margins.

In March, Ilika raised £15 million at 40p a share, so there is plenty of cash in the bank to invest in the manufacturing facility. This should start at the beginning of 2021 and production capacity will be 70 times the current level by the end of the year.

Revenues will start to build up in the year to April 2022 and the following year they could exceed £12 million, which could make the company profitable. Longer-term, there is the larger Goliath battery, which can be used for electric vehicles. This could address an enormous market.

This recommendation proved well-timed considering the years of investment that have gone into the battery technologies. The share price is high enough for the time being, but the technology being developed will have a substantial value over the next decade.