REG - EnSilica PLC - Half-year Results
26/02/2024 07:00
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RNS Number : 3553E EnSilica PLC 26 February 2024
Prior to publication, the information contained within this announcement was
deemed by the Group to constitute inside information for the purposes of
Regulation 11 of the Market Abuse (Amendment) (EU Exit) Regulations 2019/310.
With the publication of this announcement, this information is now considered
to be in the public domain.
26 February 2024
EnSilica plc
("EnSilica", the "Company" or the "Group")
Unaudited Results for the Half Year Ended 30 November 2023
Strong new order momentum supports growing order book and new business
pipeline.
EnSilica (AIM: ENSI), a leading chip maker of mixed-signal ASICs (Application
Specific Integrated Circuits), is pleased to announce its unaudited results
for the six months ended 30 November 2023 ("H1 FY24" or the "Period").
Financial Highlights
· Revenue up 11.5% to £9.6 million (H1 FY23: £8.6 million)
· Adjusted operating profit £0.06 million (H1 FY23: £0.15
million)
· Gross margin up to 43.9% (H1 FY23: 42.5%)
· Adjusted EBITDA £0.51 million (H1 FY23: £0.66 million)
· Cash and cash equivalents at 30 November 2023 of £2.1 million
(31 May 2023: £3.1 million)
· Debt reduced by 10.3% to £3.7 million at 30 November 2023 (31
May 2023: £4.2 million)
· New supply contract work resulted in further investment in IP of
£3.02 million (H1 FY23: £1.7 million)
Operational Highlights
· Ongoing contract momentum across the Period, including:
o Secured production tape-out milestone for the design & supply of an
industrial ASIC with production revenues estimated to be worth in excess of
US$30 million over seven years;
o Awarded sensor ASIC supply contract for the e-mobility market worth in
excess of US$7 million;
o Secured a follow-on contract with an existing Europe-based customer for
c.US$2.4 million; and
o New lead customer contract secured for EnSilica's proprietary satellite
broadband chip worth €2.5 million.
· Continued investment in R&D initiatives alongside further
development of the Group's sales and marketing activities.
Post Period-end Events
· Solid start to the second half of the year, with committed supply
revenues of c.US$73 million and a strong pipeline of opportunities currently
valued at c.US$512 million, underpinning FY24 market expectations.
· Released Post-Quantum Cryptography Accelerators Intellectual
Property ("IP"), securing first customer licence with a major semiconductor
supplier.
· Awarded initial mandate for a high-end telecoms ASIC, with final
contract worth in excess of US$35 million.
· Equity raise of £1.56 million in December 2023 to support new
business opportunities.
· Appointed Kristoff Rademan as Chief Financial Officer with
Kristoff set to join in May 2024.
· Advanced discussions for a £1.0 million debt facility and
invoice finance facilities as cashflows reliant on short-term receipt of
significant customer payments and R&D tax credits.
Ian Lankshear, Chief Executive Officer of EnSilica, commented:
"We are delighted with the continued operational progress delivered across the
Period, particularly the quantity and quality of contract wins secured with
companies across a range of sectors. This is testament to our expert team
which is highly focused on driving the growth of the business and helping
EnSilica deliver on its strategic ambitions.
Pleasingly, this significant new business momentum has continued into the
second half of the financial year. EnSilica has already signed a
multi-million-pound initial mandate with an established telecoms equipment
supplier, whilst we recently achieved a new milestone by securing our first
customer licence with a leading semiconductor supplier through release of our
Post-Quantum Cryptography accelerators IP.
Looking ahead, we will seek to further enhance our intellectual property
portfolio and drive our sales and marketing capabilities to ensure we remain
at the forefront of the market and are best positioned to strengthen our
reputation as a leading and innovation-led chip maker."
For further information please contact:
EnSilica plc Via Vigo Consulting
Ian Lankshear, Chief Executive Officer +44 (0)20 7390 0233
www.ensilica.com (http://www.ensilica.com/)
Allenby Capital Limited, Nominated Adviser & Broker Tel: +44 (0)20 3328 5656
Jeremy Porter / Vivek Bhardwaj (Corporate Finance) info@allenbycapital.com
Joscelin Pinnington / Tony Quirke (Sales & Corporate Broking)
Vigo Consulting (Investor & Financial Public Relations) +44 (0)20 7390 0233
Jeremy Garcia / Kendall Hill
ensilica@vigoconsulting.com (mailto:visum@vigoconsulting.com)
About EnSilica plc
EnSilica is a leading fabless design house focused on custom ASIC design and
supply for OEMs and system houses, as well as IC design services for companies
with their own design teams. The company has world-class expertise in
supplying custom RF, mmWave, mixed signal and digital ICs to its international
customers in the automotive, industrial, healthcare and communications
markets. The company also offers a broad portfolio of core IP covering
cryptography, radar, and communications systems. EnSilica has a track record
in delivering high quality solutions to demanding industry standards. The
company is headquartered near Oxford, UK and has design centres across the UK
and in Bangalore, India and Porto Alegre, Brazil.
Operational Review
We are pleased to report continued operational momentum across H1 FY24, with
customer demand for our services remaining strong.
During the Period, the Group generated £9.6 million in revenues (H1 FY23:
£8.6 million), an increase of 11.5% on H1 FY23, and £0.51 million in EBITDA
versus £0.66 million in H1 FY23. The reduction in EBITDA, against a backdrop
of growing our revenue base, highlights the ongoing investment we continue to
make across the business.
Cash and cash equivalents at 30 November 2023 was £2.1 million (31 May 2023:
£3.1 million) and the Group reduced debt during the Period by 10.3% to £3.7
million at 30 November 2023 (31 May 2023: £4.2 million).
The global ASIC chips market was valued at US$1.67 billion in 2023 and is
expected to reach US$25.08 billion by the end of 2030, delivering a CAGR of
5.1% between 2024-2030(1). The telecommunications, automobiles, industrial and
aerospace sectors, all key growth markets that EnSilica focuses on, continue
to be heavy consumers of ASICs given their ability to support data encryption,
signal processing and sensor interfacing, all of which are typically developed
for a specific application.
EnSilica continues to benefit from these market trends, supported by our niche
specialisms and underpinned by our strategic priorities, namely:
· Leverage EnSilica's strong position and relevant intellectual
property rights within automotive, industrial, healthcare, and satellite
connectivity applications for mixed signal ASICs;
· Scale the Company's successful fabless ASIC model to fully
exploit revenue opportunities from design and supply engagements;
· Develop Application Specific Standard Products ("ASSPs") to
address key customer driven opportunities, with two significant standard
platforms already at the device evaluation stage; and
· Expand EnSilica's offering through consolidation and vertical
integration.
The Group delivered ongoing contract momentum in H1 FY24, including a
production tape-out milestone of an industrial ASIC with production revenues
estimated to be worth in excess of US$30 million over the next seven years.
The ASIC is for a leading European industrial OEM and is a key component in
their factory automation controller systems.
In addition, the team has secured a number of important contracts with both
new and existing customers, including mandates with companies operating in
burgeoning markets such as satellite communications and e-mobility.
Recruitment is a key focus of the Company as it continues to explore new
commercial opportunities to grow its customer portfolio. In the Period,
EnSilica added a total of 8 employees to its already strong R&D, sales and
marketing departments, and the Company expects these highly experienced new
hires to help facilitate its global footprint expansion, especially in
jurisdictions where EnSilica is actively seeking to expand its market
presence.
The Company has seen a particular increase in interest for its services in the
US, leading to the establishment of the EnSilica USA Inc. subsidiary, which
has already built a strong relationship with relevant critical suppliers and a
highly promising pipeline of additional business opportunities. The Company
has also negotiated and secured improved relationships with key suppliers in
Europe, further consolidating EnSilica's position as a go-to ASIC partner.
Management believes that custom chips will continue to play an important role
in the further development of the Group's key growth sectors, which
collectively now support a new business pipeline of c.US$512 million. (1)
https://www.verifiedmarketreports.com/product/asic-chips-market-size-and-forecast/
(https://www.verifiedmarketreports.com/product/asic-chips-market-size-and-forecast/)
Post Period End & Outlook
The Company has made a strong start to H2 FY24, announcing an initial mandate
for a high-end telecoms ASIC, ahead of a final contract being entered into for
the full design and supply of the ASIC for a total contract value estimated to
be worth in excess of US$35 million. The initial work is being funded by
non-recurring engineering fees, fully funded by the customer, with initial
ASIC production and supply anticipated to begin at the end of the calendar
year 2026, subject to final contract.
EnSilica also released a range of Post-Quantum Cryptography accelerators, with
the first of these IP licences granted to a major semiconductor supplier in
January 2024. This award further validates the intrinsic value of the Group's
IP, as EnSilica not only licences its IP to other semiconductor companies, but
also leverages it in the development of custom ASICs which the Company
supplies to its clients.
The current sales pipeline of opportunities and potential contracts stands at
c.US$512 million following a review by management to focus on projects which
meet our criteria, and this pipeline remains a strong endorsement of the
quality of our business output and our growing reputation in the chip sector.
EnSilica has delivered another robust first-half performance to continue its
well-paced development, with the Group positioned to capitalise on growth
opportunities in key geographies including the US. The Company is continuing
to realise the positive impact of its prudent growth strategy targeting
customer acquisitions across high-growth and tech-driven markets.
Encouraged by the improving broader trading environment, management is looking
ahead to the remainder of H2 FY24 and beyond with confidence and is excited to
explore potential new mandate opportunities to add to the sizeable contract
wins already secured in the second half of the financial year.
Cashflow and new debt funding
Despite the excellent commercial progress being made, the Group's short term
cashflow is currently dependent on the receipt of R&D tax credits (some of
which was expected in December) and material customer payments, one of which
is overdue and others are expected in March and April. This has led the Board
to seek additional funding should these payments not materialise as expected
and contracted. This includes the negotiation of invoice financing facilities
and discussions with a lender for potential bridge funding of up to £1.0
million, the terms of which are expected to be agreed shortly. The Board
remains confident on receipt of adequate funds such that these financial
statements have been prepared on the basis that the Group remains a going
concern, however, there is uncertainty relating to the timely receipt of
customer payments and tax credits in the short term.
The Board continues to see great opportunity for EnSilica to continue to
capitalise on the significant growth potential that exists within the
international semiconductor industry and remains highly confident in the
Group's future growth prospects.
Mark
Hodgkins
Ian Lankshear
Chair
Chief Executive Officer
EnSilica
plc
EnSilica plc
25 February 2024
Interim Financial Statements
Condensed Interim Consolidated Statement of Comprehensive Income
Condensed Interim Consolidated Statement of Financial Position
Condensed Interim Consolidated Statement of Changes in Equity
Condensed Consolidated Statement of Cash Flows
Notes to the Interim Condensed Consolidated Financial Statements
Interim Financial Statements
Condensed Interim Consolidated Statement of Comprehensive Income
for the six months ended 30 November 2023
Six months ended Six months ended Twelve months ended
30 Nov 2023 30 Nov 2022 31 May 2023
Unaudited Unaudited Audited
Note £'000 £'000 £'000
Revenue 2 9,553 8,592 20,476
Cost of sales (5,358) (4,937) (12,306)
Gross profit 4,195 3,655 8,170
Other operating income - 8 8
Administrative expenses (4,137) (3,514) (7,352)
Operating profit 58 149 825
Interest income 1 6 7
Interest expense (368) (357) (785)
(309) (202) 47
(Loss)/profit before taxation
Taxation 4 824 524 1,745
Profit for the period 515 322 1,792
Other comprehensive (expense)/ income for the period
Currency translation differences (78) 5 (50)
Total comprehensive income for the period 437 327 1,742
Profit for the period attributable to:
Owners of the company 515 322 1,792
Non-controlling interests - - -
515 322 1,792
Other comprehensive (expense)/ income for the period attributable to:
Owners of the company (78) 5 (50)
Non-controlling interests - - -
(78) 5 (50)
Total comprehensive income for the period attributable to:
Owners of the company 437 327 1,742
Non-controlling interests - - -
437 327 1,742
Interim Financial Statements
Earnings per Share Attributable to the Owners of the Parent During the Period
(expressed in pence per share)
Six months ended Six months ended Twelve months ended
30 Nov 2023 30 Nov 2022 31 May 2023
Unaudited Unaudited Audited
Note pence pence pence
Basic earnings per share (pence) 5 0.66 0.43 2.36
Diluted earnings per share (pence) 5 0.64 0.39 2.30
Adjusted Basic earnings per share (pence) 5 0.66 0.43 2.47
Adjusted Diluted earnings per share (pence) 5 0.64 0.39 2.41
Interim Financial Statements
Condensed Interim Consolidated Statement of Financial Position
as at 30 November 2023
30 Nov 2023 30 Nov 2022 31 May 2023
Unaudited Unaudited Audited
Note £'000 £'000 £'000
Assets
Non-current assets
Property, plant and equipment 6 3,049 2,711 2,566
Intangible assets 7 15,233 10,001 12,433
Total non-current assets 18,282 12,712 14,999
Current assets
Inventories 375 1,172 304
Trade and other receivables 8 5,886 5,344 7,025
Corporation tax recoverable 1,464 2,271 2,064
Cash and cash equivalents 2,092 1,359 3,095
Total current assets 9,817 10,146 12,488
28,099 22,858 27,487
Total assets
Current liabilities
Borrowings 9 (975) (833) (883)
Lease liabilities (177) (147) (171)
Trade and other payables 10 (5,289) (3,186) (4,723)
Total current liabilities (6,441) (4,166) (5,777)
Non current liabilities
Borrowings 9 (2,764) (3,726) (3,284)
Lease liabilities (2,025) (2,182) (2,104)
Provisions (194) (206) (199)
Deferred tax (160) - (160)
Total non current liabilities (5,143) (6,114) (5,747)
Total liabilities (11,584) (10,280) (11,524)
Net assets 16,515 12,578 15,963
Equity
Issued share capital 11 137 134 137
Share premium account 8,752 6,900 8,752
Currency differences reserve (126) 6 (49)
Retained earnings 7,752 5,538 7,123
Equity attributable to owners of the Company 16,515 12,578 15,963
Non-controlling interests - - -
Total equity 16,515 12,578 15,963
The notes are an integral part of these condensed interim financial
statements.
Ian Lankshear
Mark Hodgkins
Chief Executive
Officer
Executive Chair
Company registration number: 04220106
Interim Financial Statements
Condensed Interim Consolidated Statement of Changes in Equity
Share capital Share premium account Currency translation reserve Retained earnings Attributable to owners of the parent Non-controlling interests Total equity
£'000 £'000 £'000 £'000 £'000 £'000 £'000
At 31 May 2022 134 6,900 1 5,118 12,153 - 12,153
Comprehensive income for the six months to 30 November 2022
Profit for the period - - 322 322 - 322
-
Other comprehensive income - - 5 - 5 - 5
Total comprehensive income for the period - - 5 322 327 - 327
Share based payment - - 98 98 - 98
-
At 30 November 2022 134 6,900 6 5,538 12,578 - 12,578
Comprehensive expense for the six months to 31 May 2023
Profit for the period - - - 1,471 1,471 - 1,471
Other comprehensive (expense)/income - - (55) - (55) - (55)
Total comprehensive expense for the period - - (55) 1,471 1,416 - 1,416
Share based payment - - 114 114 - 114
-
Issue of share capital 3 2,015 - - 2,018 - 2,018
Costs of share issue - (163) - - (163) - (163)
At 31 May 2023 137 8,752 (49) 7,123 15,963 - 15,963
Comprehensive income for the
six months to 30 November 2023
Profit for the period - - - 515 515 - 515
Other comprehensive expense - - (78) - (78) - (78)
Total comprehensive (expense)/income for the period - - (78) 515 437 - 437
Share based payment - - - 114 114 - 114
At 30 November 2023 137 8,752 (126) 7,752 16,515 - 16,515
Interim Financial Statements
Interim Condensed Consolidated Statement of Cash Flows
for the six months ended 30 November 2023
Note Six months Six months ended Twelve months ended
ended 30 Nov 2022 31 May 2023
30 Nov 2023 Unaudited Audited
Unaudited
£'000 £'000 £'000
Cash flows from operating activities
Cash generated/(used) from operations A 2,249 (1,415) 290
Tax received/(paid) 1,424 (76) 1,512
Net cash generated from/(used in) operating activities 3,672 (1,491) 1,802
Cash flows from investing activities
Purchase of property, plant and equipment (711) (336) (395)
Additions to intangible assets (3,018) (1,731) (4,133)
Interest received 1 6 7
Net cash used in investing activities (3,728) (2,061) (4,521)
Cash flows from financing activities
Proceeds from issuance of ordinary shares - - 1,855
Interest paid (369) (357) (785)
Lease liability payments (73) (60) (166)
Repayment of bank loans (428) (413) (832)
Net cash (used in)/ generated from financing activities (870) (830) 72
Net decrease in cash and cash equivalents (926) (4,383) (2,647)
Cash and cash equivalents at beginning of year 3,095 5,742 5,742
Foreign exchange losses (78) - -
Cash and cash equivalents at end of period B 2,092 1,359 3,095
Interim Financial Statements
Notes to the Condensed Interim Consolidated Statement of Cash Flows
for the six months ended 30 November 2023
A. Cash generated from operations
The reconciliation of profit for the year to cash generated from operations is
set out below:
Six months Six months ended Twelve months ended
ended 30 Nov 2022 31 May 2023
30 Nov 2023
£'000 £'000 £'000
Profit for the period 515 322 1,792
Adjustments for:
Depreciation 227 199 454
Amortisation of intangible assets 218 307 248
Other amortisation 12 7 28
Share based payments 114 98 213
Net interest costs 368 351 778
Tax credit (824) (524) (1,745)
630 760 1,768
Working capital movements
Increase in inventories (73) (957) (89)
Decrease/(increase) in trade and other receivables 1,139 (2,088) (3,770)
Increase in trade and other payables 558 804 2,322
(Decrease)/increase in provisions (5) 66 59
Cash generated from / (used in) operations 2,249 (1,415) 290
B. Analysis of net debt
At Cash flow Non-cash changes At
1 June 2022 30 Nov 2022
£'000 £'000 £'000 £'000
Loans (4,966) 413 - (4,553)
Lease liabilities (193) 49 10 (134)
Liabilities arising from financing activities (5,159) 462 10 (4,687)
Cash and cash equivalents 5,742 (4,383) - 1,359
Net debt 583 (3,921) 10 (3,328)
At Cash flow Non-cash changes At
1 Dec 2022 31 May 2023
£'000 £'000 £'000 £'000
Loans (4,553) 419 (33) (4,167)
Lease liabilities (134) 314 (2,455) (2,275)
Liabilities arising from financing activities (4,687) 733 (2,488) (6,442)
Cash and cash equivalents 1,359 1,736 - 3,095
Net debt (3,328) 2,469 (2,488) (3,347)
At Cash flow Non-cash changes At
1 June 2023 30 Nov 2023
£'000 £'000 £'000 £'000
Loans (4,167) 428 - (3,739)
Lease liabilities (2,275) 73 - (2,202)
Liabilities arising from financing activities (6,442) 501 - (5,941)
Cash and cash equivalents 3,095 (926) (77) 2,092
Net debt (3,347) (425) (77) (3,849)
Interim Financial Statements
Notes to the Condensed Interim Consolidated Financial Statements
For the Period ended 30 November 2023
1. General information
Ensilica plc is a public limited company incorporated in the United Kingdom,
quoted on the AIM Market of the London Stock Exchange. The Company is
domiciled in the United Kingdom and its registered office is 100 Park Drive,
Milton Park, Abingdon, OX14 4RY.
The condensed consolidated interim financial statements were approved for
issue on 25 February 2024.
The condensed consolidated interim financial statements have not been audited
or reviewed.
The condensed consolidated interim financial statements do not comprise
statutory accounts within the meaning of section 434 of the Companies Act
2006. Statutory accounts for the year ended 31 May 2023 were approved by the
Board of Directors on 9 October 2023 and delivered to the Registrar of
Companies. The report of the auditors on those accounts was unqualified, did
not contain an emphasis of matter paragraph and did not contain any statement
under section 498 of the Companies Act 2006.
The condensed consolidated interim financial statements comprise the Company
and its subsidiaries (together referred to as the 'Group').
Basis of preparation
This condensed consolidated interim financial report for the period ended 30
November 2023 has been prepared in accordance with Accounting Standard IAS 34
Interim Financial Reporting.
The interim report does not include all the notes of the type normally
included in an annual financial report. Accordingly, this report is to be read
in conjunction with the Annual Report and Consolidated Financial Statements
for the year ended 31 May 2023 and any public announcements made by EnSilica
plc during the interim reporting period.
The consolidated financial statements of the Group have been prepared in
accordance with UK-adopted International Accounting Reporting Standards (IAS)
as issued by the International Accounting Standards Board (IASB) and the
Companies Act 2006.
The financial information has been prepared under the historical cost
convention unless otherwise specified within these accounting policies. The
financial information and the notes to the financial information are presented
in thousands of pounds sterling ('£'000'), the functional and presentation
currency of the Group, except where otherwise indicated.
The principal accounting policies adopted in preparation of the financial
information are set out below. The policies have been consistently applied to
all periods presented, unless otherwise stated.
Judgements made by the Directors in the application of the accounting policies
that have a significant effect on the financial information and estimates with
significant risk of material adjustment in the next year are discussed below.
Going concern
In assessing the appropriateness of the going concern assumption, the Board
has considered the availability of funding alongside the possible cash
requirements of the Group and Company. After due consideration and in the
expectation of receipt of tax credits and customer payments in the short
term as set out below, the directors have concluded that there is a reasonable
expectation that the Group has adequate resources to continue in operational
existence for at least 12 months from the date of this report, but in reaching
that conclusion the Board is mindful of the following key sensitivities which,
should they materialise, could cast significant doubt on that conclusion.
The Board originally anticipated to receive R&D tax credit from HMRC in
December 2023. While the timing of the receipt of this continues to remain
outside of the Company's control, this is now anticipated to be received in
the first quarter of 2024. The Company also expects to receive certain
significant customer payments, including in relation to two separate
contracts, one of which was announced on 14 December 2023 and is expected in
March 2024, for work completed and which is overdue. In view of this, the
Board has prepared various sensitivity analyses to determine circumstances in
which the Company might need additional funding in order to meet short-term
working capital requirements. It has determined that there remains an
uncertainty as to the adequacy of funding in the following circumstances:
1. the Company does not enter into any interim bridging financing
arrangement; and/or
2. the Company does not receive the payments outlined above in
relation to customer contracts.
Accordingly, as a matter of prudence, the Board is negotiating invoice
financing and is in discussions for £1.0 million in debt finance to increase
financial headroom and resilience.
Accounting policies
The accounting policies adopted are consistent with those of the previous
financial year.
Use of estimates and assumptions
The preparation of interim financial statements requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities, income
and expense. Actual results may differ from these estimates.
In preparing these condensed interim financial statements, the significant
judgements made by management in applying the Group's accounting policies and
the key sources of estimation uncertainty were the same as those that applied
to the annual financial statements for the year ended 31 May 2023.
Financial instruments
The Group's financial instruments comprise cash and cash equivalents,
receivables and payables arising directly from operations, and derivatives.
The directors consider that the fair values of the Group's financial
instruments do not differ significantly from their carrying values.
2. Analysis of revenue
The Board continues to define all the Group's trading as operating in the
integrated circuit design market and considers all revenue to relate to the
same, one operating segment. Revenue is defined as per the accounting
policies.
Revenue in respect of the supply of products is recognised at a point in time.
Design and related services, including income for the use of IP, are
recognised over the period when services are provided.
Six months Six months Twelve months ended
ended ended 31 May 2023
30 Nov 2023 30 Nov 2022
£'000 £'000 £'000
Recognised at a point in time
Supply of products
1,071 1,235 2,856
Recognised over time
NRE design services 3,820 3,409 8,175
Consultancy design services 4,640 3,700 9,400
Licensing related income 22 248 45
8,482 7,357 17,620
9,553 8,592 20,476
By destination:
UK 1,413 970 1,831
Rest of Europe 4,639 4,432 11,817
Rest of the World 3,502 3,190 6,828
Total revenue 9,553 8,592 20,476
The nature of the design services and projects is such that there will be
significant customers as a proportion of revenue in any one reporting period
but that these may be different customers and volumes from one period to the
next. During the six months to 30 November 2023 there were five customers with
sales between £1.0m and £2.0m contributing 73% of total revenue whereas in
the comparable period to 30 November 2022 two customers had sales amounting to
£2.6m and £2.0m respectively contributing 53% of revenues with remaining
sales being less than £1.0m to each customer.
The group's non-current assets comprising investments, tangible and intangible
fixed assets, and the net assets by geographical location are:
30 Nov 2023 30 Nov 2022 31 May 2023
Non-current assets Net assets Non-current assets Net assets Non-current assets Net assets
£'000 £'000 £'000 £'000 £'000 £'000
United Kingdom 18,183 15,393 12,570 11,244 14,892 14,967
India 34 1,429 62 1,251 34 1,199
Brazil 65 120 80 84 73 67
Germany (427) - (270)
18,282 16,515 12,712 12,578 14,999 15,963
3. Alternative performance measures
These items are included in normal operating costs of the business but are
significant cash and non-cash expenses that are separately disclosed because
of their size, nature or incidence. It is the Group's view that excluding them
from operating profit gives a better representation of the underlying
performance of the business in the year.
The Group's primary results measure, which is considered by the directors of
Ensilica plc to better represent the underlying and continuing performance of
the Group, is Adjusted EBITDA as set out below. EBITDA is a commonly used
measure in which earnings are stated before net finance income, amortisation
and depreciation as a proxy for cash generated from trading.
Six months ended Six months Twelve months ended
30 Nov 2023 ended 31 May 2023
30 Nov 2022
£'000 £'000 £'000
Operating profit before interest 58 149 825
Compensation for loss of office - - 85
Adjusted Operating profit before interest 58 149 910
Depreciation 227 199 454
Amortisation 230 314 276
Adjusted EBITDA 515 662 1,640
Profit for the period 515 322 1,792
Compensation for loss of office - - 85
Adjusted Profit for the period 515 322 1,877
4. Taxation on profit
Six months Six months Twelve months
ended ended ended
30 Nov 2023 30 Nov 2022 31 May 2023
£'000 £'000 £'000
Current taxation
UK corporation tax credit 900 600 2,064
Foreign tax charge (76) (76) (159)
824 524 1,905
Deferred taxation
Origination and reversal of timing differences - - (160)
Tax credit on profit/(loss) 824 524 1,745
Factors affecting the tax credit for the period
The tax credit on the profit/(loss) for the year differs from applying the
standard rate of corporation tax in the UK of 25% (2023: 20%). The
differences are reconciled below:
Six months Six months Twelve months ended
ended ended 31 May 2023
30 Nov 2023 30 Nov 2022
£'000 £'000 £'000
(Loss)/profit before taxation (309) (202) 47
Corporation tax at standard rate (77) (38) 9
Factors affecting charge for the year:
Disallowable expenses 103 127 164
Allowances and enhanced deductions (772) - (966)
Research and development allowances (726) (807) (1,940)
Reduced rate on surrender of R&D losses for tax credit 683 115 762
RDEC expenditure credit (79) - (62)
Restricted tax losses - 79 -
Foreign tax charges 15 - 85
Deferred tax - - 160
Share options 29 - 43
Tax credit on (loss)/profit (824) (524) (1,745)
5. Earnings per share
Six months ended 30 Nov 2023 Six months ended 30 Nov 2022 Twelve months ended
31 May 2023
Profit used in calculating EPS (£'000) 515 322 1,792
Number of shares for basic EPS ('000s) 78,115 75,232 75,833
Basic earnings per share (pence) 0.66 0.43 2.36
Number of shares for diluted EPS ('000s) 80,134 82,767 77,874
Diluted earnings per share (pence) 0.64 0.39 2.30
Adjusted Earnings per share
Six months ended Six months ended Twelve months ended
30 Nov 2023 30 Nov 2022 31 May 2023
Adjusted Profit used in calculating EPS (£'000) 515 322 1,877
Number of shares for basic EPS ('000s) 78,115 75,232 75,833
Adjusted basic earnings per share (pence) 0.66 0.43 2.47
Number of shares for diluted EPS ('000s) 80,134 82,767 77,874
Adjusted diluted earnings per share (pence) 0.64 0.39 2.41
There are 424,440 of exercisable share options over ordinary shares
respectively which are potentially dilutive to profit.
As part of the Company's 2022 long term incentive plan, share options over
6,751,109 ordinary shares and warrants over 450,000 ordinary shares are
potentially dilutive to profit.
6. Property, plant and equipment
Right-of-use property Leasehold improvements Office equipment Right-of-use equipment Computer equipment Total
£'000 £'000 £'000 £'000 £'000 £'000
Cost
At 1 June 2023 2038 240 240 597 563 3,678
Additions - - 2 640 69 711
At 30 November 2023 2,038 240 242 1,237 632 4,389
Depreciation
At 1 June 2023 (367) (24) (111) (204) (405) (1,111)
Charge for the year (91) (6) (22) (53) (54) (227)
At 30 November 2023 (458) (30) (133) (257) (459) (1,338)
Net book value
At 30 November 2023 1,580 210 109 980 169 3,049
At 31 May 2023 1,671 216 129 393 155 2,566
At 30 November 2022 1,791 226 147 390 157 2,711
7. Intangible assets
Development costs Software Total
Intellectual
property
£'000 £'000 £'000 £'000
Cost
At 1 June 2023 15,478 123 39 15,640
Additions 3,018 - - 3,018
At 30 November 2023 18,496 123 39 18,658
Amortisation and impairment
At 1 June 2023 (3,152) (51) (4) (3,207)
Charge for the period (205) (11) (2) (218)
At 30 November 2023 (3,357) (62) (6) (3,425)
Net book value
At 30 November 2023 15,139 61 33 15,233
At 31 May 2023 12,326 72 35 12,433
At 30 November 2022 9,877 84 40 10,001
Capitalised development expenditure relates to developed intellectual property
in respect of circuit and chip design.
The recoverable amount of a cash generating unit (CGU) is assessed using a
value in use model across each individual project that forms the intellectual
property that has been capitalised. The value in use for each project is
dependent on the envisaged life cycle of the CGU using a discount factor of
11.5% (2022:10%), being the cost of capital for the CGU.
8. Trade and other receivables
30 Nov 2023 30 Nov 2022 31 May 2023
Current £'000 £'000 £'000
Trade receivables 1,364 1,661 3,893
Other receivables 1,093 952 807
Prepayments 703 562 483
Accrued income 2,726 2,169 1,842
Total 5,886 5,344 7,025
9. Borrowings
30 Nov 2023 30 Nov 2022 31 May 2023
Current £'000 £'000 £'000
Bank loans 975 833 883
Non-current
Bank loans 2,764 3,726 3,284
Total 3,739 4,559 4,167
A bank loan of £1,440,000 (2022: £1,867,000) is secured by fixed and
floating charges over the assets of the group and bears interest at rates of
8% over SONIA or 10% if higher. It is repayable in monthly instalments over
the period to August 2026.
A loan of £1,939,000 (2022: £2,875,000) is unsecured and bears interest at a
fixed rate of 13%. It is being repaid by quarterly instalments over the period
to October 2027.
The loan liabilities are stated net of unamortised loan issue costs as at 30
November 2023 of £140,000 (2022: £189,000) which are being amortised over
the period to the loan repayment dates.
10. Trade and other payables
30 Nov 2023 30 Nov 2022 31 May 2023
Current £'000 £'000 £'000
Trade payables 2,051 1,475 2,388
Taxation and social security 542 519 281
Other payables 166 120 161
Accruals 2,249 939 1,293
Contract liabilities 281 133 600
Total 5,289 3,186 4,723
11. Share capital
Allotted, called up and fully paid 30 Nov 2023 30 Nov 2022 31 May 2023
£'000 £'000 £'000
78,115,158 ordinary shares of £0.001 each 78 75 78
59,190 deferred shares of £1.00 each 59 59 59
137 134 137
12. Share based payment
The company does not report share based payment detailed analysis as part of
its half year reporting.
An estimated provision totalling £114,000 (30 November 2022 £98,000) has
been made for the period under review.
13. Post balance sheet events
Subsequent to the end of the period under review there have been no events
that the company feels should be brought to the shareholders' attention.
14. Related party transactions
During the period under review, the company undertook transactions with the
following related parties:
Six months to 30 Nov 2023 Six months to 30 Nov 2022 Twelve months to 31 May 2023
Name Services Transactions during the period Balance owing/ (owed) at 30 Nov 2023 Transactions during the period Balance owing/ (owed) at 30 Nov 2022 Transactions during the year Balance owing/ (owed) at 31 May 2023 £'000
£'000
£'000
Ensilica India Private Limited Semiconductor design services 586 770 724 770 1,282 -
EnSilica Do Brasil Sociedade Unipessoal Limitada Semiconductor design services 609 - 535 - 1,187 -
EnSilica GMBH Semiconductor sales services 150 (150) - - 271 (271)
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