REG - EnSilica PLC - Unaudited Half Year Results
10/02/2025 07:00
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RNS Number : 4932W EnSilica PLC 10 February 2025
The information contained within this announcement was deemed by the Company
to constitute inside information as stipulated under the UK Market Abuse
Regulation.
10 February 2025
EnSilica plc
("EnSilica", the "Company" or the "Group")
Unaudited Results for the Half Year Ended 30 November 2024
Chip supply revenue more than doubled and five design & supply contract
wins, with more expected by year end
Successful implementation of strategy centred on exploiting high-growth and
tech-driven markets
EnSilica (AIM: ENSI), a leading chip maker of mixed-signal ASICs (Application
Specific Integrated Circuits), announce its unaudited results for the six
months ended 30 November 2024 ("H1 FY25" or the "Period").
Financial Highlights
· Revenue was £9.3 million (H1 FY24: £9.6 million)
· Chip supply revenue up 164% from £1.1 million in H1 FY24 to £2.9
million in H1 FY25
· EBITDA (£0.2) million (H1 FY24: £0.5 million)
· Operating loss of £0.8 million (H1 FY24: £0.0 million)
· Cash and cash equivalents at 30 November 2024 of £2.8 million (31
May 2024: £5.2 million)
· £6 million debt refinancing completed, unlocking £2.1 million of
additional working capital
· Further investment in intellectual property ("IP") and tooling of
£2.6 million (H1 FY24: £3.0 million)
Operational Highlights
· EnSilica currently has four ASICs in production with supply revenue
orders secured to deliver supply revenues, in aggregate, of £6 million in
FY25, double compared to the previous financial year
· Five design and supply ASICs and one supply contract won, generating
supply revenues from 2027 onwards
o Second industrial automation ASIC design and supply contract secured with
Siemens;
o Timing control ASIC design and supply contract secured projected to exceed
$30 million;
o Photonics Controller ASICs design and supply contract secured with Oriole
Networks;
o Automotive and industrial controller ASIC design and supply contract
secured in excess of $31 million over a seven-year period;
o Telecommunications ASIC design and supply contract secured with SIAE
Microelettronica worth in excess of $30 million over a ten-year period; and
· Supply only contract for Edge AI chip forecast value estimated to
exceed $50 million over the first five years of production
· As announced on 3 February 2025, EnSilica was awarded £10.4 million
of matched funding from the UK Space Agency for a development project aimed at
increasing competitiveness in the satellite broadband communications user
terminals market
Ian Lankshear, Chief Executive Officer of EnSilica, commented:
"We have made a solid start to 2025, securing a further five design and supply
ASICs contracts, and we remain confident of securing additional mandates
across the remainder of the financial year. Our NRE and chip supply revenues
from these new contracts alone are expected to generate a further £100
million of revenues over their lifetime, starting from 2027 onwards, further
cementing our growing financial base. In addition, and as a sign of ongoing
confidence, our chip supply revenues are set to double to £6 million in FY25,
a key performance indicator of the success of the Company's fabless business
model.
Our diverse range of markets and high-profile customers is building both a
robust portfolio and exciting future chip supply revenue streams.
Our ongoing progress has been further highlighted by the recently announced
£10.4 million of funding from the UK Space Agency, a highly significant award
for EnSilica as we aim to increase our satellite communications market
footprint. This funding will enable our team to advance our position and
competitiveness as a key supplier of silicon chips for user terminals across
the various new satellite constellations, offering an alternative to SpaceX's
Starlink service."
Investor Presentation
An online presentation of the half-year results will be held at 3.30 p.m. GMT
on Friday, 14 February 2025 via the Investor Meet Company ("IMC") platform.
Investors can sign up to IMC for free and add EnSilica via:
https://www.investormeetcompany.com/ensilica-plc/register-investor
(https://www.investormeetcompany.com/ensilica-plc/register-investor%0d)
For further information please contact:
EnSilica plc via Vigo Consulting
Ian Lankshear, Chief Executive Officer +44 (0)20 7390 0233
Kristoff Rademan, Chief Financial Officer
www.ensilica.com (http://www.ensilica.com/)
Allenby Capital Limited, Nominated Adviser & Joint Broker +44 (0)20 3328 5656
Jeremy Porter / Vivek Bhardwaj (Corporate Finance) info@allenbycapital.com (mailto:info@allenbycapital.com)
Joscelin Pinnington / Tony Quirke (Sales & Corporate Broking)
Singer Capital Markets, Joint Broker
Rick Thompson / Asha Chotai +44 (0)20 7496 3000
Vigo Consulting (Investor & Financial Public Relations) +44 (0)20 7390 0233 ensilica@vigoconsulting.com
(mailto:visum@vigoconsulting.com)
Jeremy Garcia / Kendall Hill / Anna Stacey
The person responsible for arranging release of this announcement on behalf of
the Company is Kristoff Rademan, Chief Financial Officer.
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 and Campinas,
Brazil.
Operational Review
The Company is pleased to report that it has made a solid start to FY25,
securing five design and chip supply ASIC contracts. The design
non-reoccurring engineering ("NRE") revenue underpins the NRE revenue
component for the remainder of the financial year and into FY26, and the chip
supply revenue from these chips will be further compounding the supply growth
from 2027 onwards. The Company has developed a strong sales pipeline in the
current financial year, with a number of design and supply contracts now in
the business negotiation phase.
Revenues in the Period were £9.3 million (H1 FY24: £9.6 million), which
includes ongoing growth in our supply revenue base which is the key
performance indicator for EnSilica as we continue our transition from a pure
consultancy business to a fabless semiconductor company with multiple revenue
streams. This model benefits from long-term predictable, high margin
reoccurring revenues, which we believe will gain in traction over the next few
years.
Demonstrating progress towards our stated business model, the Company
fulfilled £2.9 million of supply in the Period, and secured orders and
scheduled production to generate £6.0 million of supply revenue for FY25.
This represents double the £2.9 million the supply revenue generated in FY24
and a Compound Annual Growth Rate ("CAGR") of 72% since FY21.
With the increased investment in IP and tooling as we continue our transition
to a fabless business model, the EBITDA loss was £0.2 million in H1 FY25. In
H2 FY25, we expect to see early revenues from the five new signed contracts to
generate full-year EBITDA profits.
Contract wins and other highlights for H1 FY25 include:
· $7 million NRE supply contract for an edge AI chip with ongoing wafer
supply;
· Awarded second ASIC design and supply win with Siemens;
· First production orders for the first Siemens supply contract
received for shipping in the next six months;
· $30 million design and supply contract signed with SIAE for a
high-end telecommunications ASIC;
· £2 million design contract with a prestigious supplier of power and
propulsion systems likely to lead to a major follow-on contract;
· $31 million design and supply contract for an ASIC for automotive and
industrial applications; and
· NRE contract with Oriole Networks to design and supply for a
photonics controller, which is anticipated to be significant.
Period-end Board Changes
Post the period-end, the Company appointed Stephen Brindle as a Non-executive
Director. Stephen has extensive experience having held a number of senior
roles across financial services, capital markets and the technology sector.
The Board welcomes Stephen to the Company and looks forward to working with
him.
The Company also announced the resignation from the Board of Janet Collyer for
personal reasons. Following the resignation of Janet, the role of Senior
Independent Director was assumed by Wasim "Woz" Ahmed.
The Board thanks Janet for her contribution to EnSilica, starting from before
the Company's IPO, and wishes her well in all her future endeavours.
Outlook
EnSilica has delivered another strong first-half performance for FY25 to
continue on its solid growth trajectory, with the Group well placed to
capitalise on growth opportunities in global markets including the US. The
Company is continuing to realise the positive impact of its diversified
revenue streams, as well as its growth strategy centred on pursuing new
business opportunities across high-growth and tech-driven markets, including
satellite communications, industrial and the automotive market.
The Board continues to believe that total revenues will be weighted towards
the second half of FY25 with £6 million of the key recurring chip supply
revenue considered to be secured for FY25. The other revenues from consultancy
and NRE are also trading in line with the Board's expectations, noting as is
often the case with NRE contracts, there are customer dependencies that may
impact the precise timing of this revenue stream between now and the end of
the financial year.
Encouraged by the improving broader trading environment, management is
looking ahead to the remainder of H2 FY25 and beyond with confidence and
is excited to explore potential new mandate opportunities to add to the
sizeable contract wins already secured in the financial year.
Finance Review
H1 FY25 has seen significant growth of new ASIC design and supply customers
with five new design and supply contract wins strengthening the Group's
pipeline and further demonstrating progress with regards to the Group's stated
aim of becoming the premier chipmaker of choice for the development and supply
of ASICs in satellite communications, industrial, automotive and healthcare
applications.
Successful contract wins during the first half of the year are expected to
start generating revenues in H2 FY25 with operational losses reversing as
customer NRE activities ramp up.
Chip supply revenue has grown substantially in H1 FY25, more than doubling
from £1.1 million in H1 FY24 to £2.9 million for H1 FY25. This increase
has been driven by growth in customer demand as well as a tape-outs of an
industrial ASIC which occurred during FY24. We now have four ASICs in
commercial supply and a further 12 in the design phase.
Cash flow remains a focus with cash used in operations being supported by the
refinancing of external loans with Lloyds Banking Group plc, unlocking an
additional £2.1 million of working capital as well as £1.2 million from an
equity placing which completed in June 2024.
As part of the Group's growth strategy and in conjunction with the Group's
customers, EnSilica continues to co-invest in the development of customer
ASICs, as well as its own intellectual property and know-how. As such the
Group has invested a further £2.6 million (H1 FY24: £3.0 million) in supply
contracts and intellectual property assets with the resultant expected return
on the investment generated through long-term, high margin, recurring supply
or royalty revenues.
Financial Summary
H1 2025 H1 2024
£'m £'m
Revenue 9.3 9.6
Cost of goods (5.8) (5.4)
Gross profit 3.4 4.2
Gross margin 37% 44%
Operating expenses (3.6) (3.7)
EBITDA (0.2) 0.5
Depreciation & amortisation (0.6) (0.4)
Operating (loss)/profit (0.8) 0.1
Interest (0.5) (0.4)
Loss before tax (1.4) (0.3)
Tax 0.2 0.8
(Loss)/profit for the year (1.2) 0.5
Revenues
Revenues in the period was £9.3 million which were 3% lower than H1 FY24
owing to activities from new contract wins not progressing as quickly as
anticipated. However, as highlighted in the Group's year end results and
supported by the increased NRE activity from the five new contract wins,
higher revenues and profits are expected in the second half of the financial
year.
Chip supply revenues have more than doubled from £1.1 million in H1 FY24 to
£2.9 million in H1 FY25, with further significant growth expected in future
years.
The Group continues to focus on developing chip supply revenues through NRE
projects as part of its fabless business model, with the established
consultancy revenues providing a further reliable income stream.
Gross Margin
Gross margins in H1 FY25 at 37% are slightly lower than the 40% targeted by
the Group. As chip supply revenue starts dominating the total revenues in
future years, the gross margin will become more stable.
Operating Expenses
Operating expenses at £3.6 million were slightly lower than H1 FY24 (£3.7
million).
EBITDA
As a result of the slight decrease in revenues and higher level of cost of
goods, EBITDA decreased by £0.7 million from £0.5 million in H1 FY24 to
(£0.2) million in H1 FY25.
Profit after tax
The interest expense increased to £0.5 million in H1 FY25 (H1 FY24: £0.4
million) due to one off finance charges incurred as a result of the
refinancing of the existing external loan facilities in November 2024. Full
year interest costs are expected to be in line with the prior year as the
higher external loan balance is offset by a lower interest rate achieved.
Headcount
Average Group headcount has increased slightly from 168 for the 2024 financial
year to 175 for H1 FY25 as a result of the recruitment of engineers to service
the new NRE and design contracts won by the Group in the period.
Cash flow
H1 2025 H1 2024
£'m £'m
EBITDA (0.2) 0.5
Working capital (1.4) 1.8
Tax received - 1.4
Net cash flow from operations (1.6) 3.7
Investment in intangibles (2.6) (3.0)
Capital expenditure (0.4) (0.7)
Interest paid (0.5) (0.4)
Cash consumption (5.1) (0.4)
Net proceeds from financing 2.8 (0.5)
Movement in the year (2.3) (0.9)
The Company consumed net cash flow from operations of £1.6 million after an
EBITDA loss of £0.2 million and negative working capital movements of £1.4
million. The Company made investments in intangibles of £2.6 million, mainly
driven by the co-development of customer projects, and spent £0.4 million on
manufacturing equipment capital expenditure. Interest paid on loans and
leasehold property liabilities amounted to £0.5 million, leading to a total
cash consumption of £5.1 million.
Net proceeds from financing included equity fundraise receipts of £1.2
million, a net loan advanced of £2.1 million, and offset by loan and lease
liability repayments of £0.5 million. The movement in cash in the year was
therefore a decrease of £2.3 million.
Ian Lankshear Kristoff Rademan
CEO CFO
EnSilica plc EnSilica plc
10 February 2025
Interim Financial Statements
Condensed Interim Consolidated Statement of Comprehensive Income
for the six months ended 30 November 2024
Six months ended Six months ended Twelve months ended
30 Nov 2024 30 Nov 2023 31 May 2024
Unaudited Unaudited Audited
Note £'000 £'000 £'000
Revenue 2 9,270 9,553 25,266
Cost of sales (5,825) (5,358) (16,267)
Gross profit 3,445 4,195 8,999
Other operating income - - 38
Administrative expenses (4,285) (4,137) (8,165)
Operating (loss)/ profit (840) 58 872
Interest income - 1 1
Interest expense (516) (368) (925)
(1,356) (309) (52)
Loss before taxation
Taxation 4 156 824 (130)
(Loss)/profit for the period (1,200) 515 (182)
Other comprehensive (expense)/ income for the period
Currency translation differences (31) (78) (68)
Total comprehensive (loss)/ income for the period (1,231) 437 (250)
(Loss)/Profit for the period attributable to:
Owners of the company (1,200) 515 (182)
Non-controlling interests - - -
(1,200) 515 (182)
Other comprehensive (expense)/ income for the period attributable to:
Owners of the company (31) (78) (68)
Non-controlling interests - - -
(31) (78) (68)
Total comprehensive income for the period attributable to:
Owners of the company (1,231) 437 (250)
Non-controlling interests - - -
(1,231) 437 (250)
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 2024 30 Nov 2023 31 May 2024
Unaudited Unaudited Audited
Note pence pence pence
Basic earnings per share (pence) 5 (1.44) 0.66 (0.23)
Diluted earnings per share (pence) 5 (1.44) 0.64 (0.23)
Interim Financial Statements
Condensed Interim Consolidated Statement of Financial Position
as at 30 November 2024
30 Nov 2024 30 Nov 2023 31 May 2024
Unaudited Unaudited Audited
Note £'000 £'000 £'000
Assets
Non-current assets
Property, plant and equipment 6 3,132 3,049 2,997
Intangible assets 7 20,759 15,233 18,565
Total non-current assets 23,891 18,282 21,562
Current assets
Inventories 896 375 753
Trade and other receivables 8 8,966 5,886 8,390
Corporation tax recoverable 2,179 1,464 1,349
Cash and cash equivalents 2,792 2,092 5,156
Total current assets 14,833 9,817 15,648
Total assets 38,724 28,099 37,210
Current liabilities
Borrowings 9 (3,831) (975) (1,717)
Lease liabilities (320) (177) (199)
Trade and other payables 10 (6,342) (5,289) (7,118)
Total current liabilities (10,493) (6,441) (9,034)
Non current liabilities
Borrowings 9 (1,879) (2,764) (2,298)
Lease liabilities (1,711) (2,025) (1,904)
Provisions (182) (194) (206)
Deferred tax (2,009) (160) (1,365)
Total non current liabilities (5,781) (5,143) (5,773)
Total liabilities (16,284) (11,584) (14,807)
Net assets 22,450 16,515 22,403
Equity
Issued share capital 11 156 137 153
Share premium account 16,165 8,752 14,957
Currency differences reserve (176) (126) (117)
Retained earnings 6,305 7,752 7,410
Equity attributable to owners of the Company 22,450 16,515 22,403
Non-controlling interests - - -
Total equity 22,450 16,515 22,403
The notes are an integral part of these condensed interim financial
statements.
Ian Lankshear Kristoff Rademan
CEO CFO
EnSilica plc EnSilica plc
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 1 June 2023 137 8,752 (49) 7,123 15,963 - 15,963
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
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 1 Dec 2023 137 8,752 (126) 7,752 16,515 - 16,515
Loss for the period - - - (696) (696) - (696)
Other comprehensive expense - - 9 - 9 - 9
Total comprehensive (expense)/income for the period - - 9 (696) (687) - (687)
Share based payment - (217) - 354 137 - 137
Issue of share capital 16 6,893 - - 6,909 - 6,909
Cost of share issue - (471) - - (471) - (471)
At 31 May 2024 153 14,957 (117) 7,410 22,403 - 22,403
Loss for the period - - - (1,200) (1,200) - (1,200)
Other comprehensive expense - - (59) (36) (95) - (95)
Total comprehensive expense for the period - - (59) (1,236) (1,295) - (1,295)
Share based payment - - - 131 131 - 131
Issue of share capital 3 1,408 - - 1,411 - 1,411
Cost of share issue - (200) - - (200) - (200)
At 30 November 2024 156 16,165 (176) 6,305 22,450 - 22,450
Interim Financial Statements
Interim Condensed Consolidated Statement of Cash Flows
for the six months ended 30 November 2024
Note Six months Six months ended Twelve months ended
ended 30 Nov 2023 31 May 2024
30 Nov 2024 Unaudited Audited
Unaudited
£'000 £'000 £'000
Cash flows from operating activities
Cash (used)/generated from operations A (1,598) 2,249 2,482
Tax (paid)/received (30) 1,424 1,788
Net cash (used in)/generate from operating activities (1,628) 3,672 4,270
Cash flows from investing activities
Purchase of property, plant and equipment (385) (711) (927)
Additions to intangible assets (2,575) (3,018) (6,425)
Interest received - 1 1
Net cash used in investing activities (2,960) (3,728) (7,351)
Cash flows from financing activities
Proceeds from issuance of ordinary shares 1,208 - 6,480
Interest paid (516) (369) (925)
Lease liability payments (72) (73) (172)
Loans and borrowings received 5,710 - 713
Loans and borrowing repaid (4,027) (428) (865)
Net cash generated from/ (used in) financing activities 2,283 (870) 5,231
Net (decrease)/increase in cash and cash equivalents (2,305) (926) 2,150
Cash and cash equivalents at beginning of year 5,156 3,095 3,095
Foreign exchange losses (79) (78) (89)
Cash and cash equivalents at end of period B 2,792 2,092 5,156
Interim Financial Statements
Notes to the Condensed Interim Consolidated Statement of Cash Flows
for the six months ended 30 November 2024
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 2023 31 May 2024
30 Nov 2024
£'000 £'000 £'000
(Loss)/profit for the period (1,200) 515 (182)
Adjustments for:
Depreciation 241 227 495
Amortisation of intangible assets 383 218 322
Other amortisation 6 12 -
Share based payments 131 114 248
Net interest costs 516 368 924
Tax (credit)/charge (156) (824) 130
(79) 630 1,937
Changes in working capital
Increase in inventories (143) (73) (448)
(Increase)/decrease in trade and other receivables (576) 1,139 (997)
(Decrease)/increase in trade and other payables (776) 558 1,983
(Decrease)/increase in provisions (24) (5) 7
Cash (used in) /generated from operations (1,598) 2,249 2,482
B. Analysis of net debt
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)
At Cash flow Non-cash changes At
1 Dec 2023 31 May 2024
£'000 £'000 £'000 £'000
Loans (3,739) (276) - (4,015)
Lease liabilities (2,202) 99 - (2,103)
Liabilities arising from financing activities (5,941) (177) - (6,118)
Cash and cash equivalents 2,092 3,076 (12) 5,156
Net debt (3,849) 2,899 (12) (962)
At Cash flow Non-cash changes At
1 June 2024 30 Nov 2024
£'000 £'000 £'000 £'000
Loans (4,015) (1,695) - (5,710)
Lease liabilities (2,103) 72 - (2,031)
Liabilities arising from financing activities (6,118) (1,623) - (7,741)
Cash and cash equivalents 5,156 (2,285) (79) 2,792
Net debt (962) (3,908) (79) (4,949)
Interim Financial Statements
Notes to the Condensed Interim Consolidated Financial Statements
For the Period ended 30 November 2024
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 unaudited interim financial statements were
approved for issue on 10 February 2025.
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 2024 were approved by the
Board of Directors on 4 November 2024 and delivered to the Registrar of
Companies. The report of the auditors on those accounts was unqualified but
contained an emphasis of matter paragraph relating to going concern 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 six month period
ended 30 November 2024 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 report and financial statements. Accordingly, this
report is to be read in conjunction with the Annual Report and Consolidated
Financial Statements for the year ended 31 May 2024 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
For the 6 months ending 30 November 2024, the Group generated revenues of
£9.3 million and an operating loss of £0.8 million; and consumed cash flow
from operations of £1.6 million. As at 30 November 2024, the Group held cash
balances of £2.8 million and the Group's financing arrangements consisted of
a loan of £5.7 million from the Bank of Scotland.
In considering the basis of preparation of the interim financial statements,
the Directors have prepared a cash flow forecast for a period of at least 12
months from the date of approval of these financial interim financial
statements based on forecasts for the financial years 2025 and 2026. The
Directors have undertaken a rigorous assessment of the forecast and assessed
identified downside risks and mitigating actions. The assumptions around
project sales, staffing and purchases are based on management's expectations
over the forecast period.
Taking account of the matters described above, the Board has the confidence in
the Company's ability to continue as a going concern for the following
reasons:
· The Company's ability to continue to be successful in winning new
customers and building its brand as demonstrated by the signing of five new
design and supply agreements and one design only agreement in the last six
months with a lifetime value of $100 million,
· Potential access to £3 million additional loan financing accordion
option through the debt facility from Lloyds Banking Group plc,
· The Company's history of being able to access capital markets as
evidenced by the raising of £5.2 million gross equity in May 2024 and,
· The Company's ability to control capital expenditure and lower other
operational spend, as necessary
Taking account of the matters described above, the Directors are confident
that the Company will have access to sufficient funds to continue to meet its
liabilities as they fall due for at least 12 months from the date of approval
of the financial statements and therefore have prepared the financial
statements on a going concern basis.
Accounting policies
The accounting policies, including the classification of financial
instruments, applied in these interim financial statements are consistent with
those of the annual financial statements for the year ended 31 May 2024, as
described in those financial statements.
Use of estimates and judgements
The preparation of the financial information under IFRS requires the use of
certain critical accounting assumptions and requires management to exercise
its judgement and to make estimates in the process of applying the Company's
accounting policies.
Management bases its estimates on historical experience and on various other
assumptions that management believes to be reasonable in the circumstances.
The key estimates and judgements used in the preparation of this financial
information that could result in a material change in the carrying value of
assets or liabilities within the next six months are as follows:
Intangible assets - capitalisation, impairment and amortisation of development
expenditure
Judgement
The capitalisation of development costs is subject to a degree of judgement in
respect of the timing when the commercial viability of new technology and
know-how is reached, supported by the results of testing and customer trials,
and by forecasts for the overall value and timing of sales which may be
impacted by other future factors which could impact the assumptions made. In
making their judgements, the Directors considered the carrying values that are
disclosed in note 7.
Estimation
Amortisation commences once management consider that the asset is available
for use, i.e. when it is judged to be in the location and condition necessary
for it to be capable of operating in the manner intended by management and the
cost is amortised over the estimated useful life of the asset based on
experience of and future expected customer product cycles and lives. The
useful economic lives and residual values are re‑assessed annually. They are
amended when necessary to reflect current estimates, based on technological
advancement, future investments and economic utilisation.
Impairment of non-financial assets
Impairment exists when the carrying value of an asset or cash generating unit
exceeds its recoverable amount, which is the higher of its fair value less
costs of disposal and its value in use. The fair value less costs of disposal
calculation is based on available data from binding sales transactions,
conducted at arm's length, for similar assets or observable market prices less
incremental costs of disposing of the asset. The value in use calculation is
based on a DCF model. The cash flows are derived from the budget for the next
five years and do not include restructuring activities that the Group is not
yet committed to or significant future investments that will enhance the
performance of the assets of the CGU being tested. The recoverable amount is
sensitive to the discount rate used for the DCF model as well as the expected
future cash-inflows and the growth rate used for extrapolation purposes. These
estimates are most relevant to goodwill and other intangibles with indefinite
useful lives recognised by the Group. The key assumptions used to determine
the recoverable amount for the different CGUs, including a sensitivity
analysis, are disclosed and further explained in Note 7.
Revenue
Estimation
In accordance with the policy on revenue recognition, management are required
to judge the percentage of completion of the contract in order to recognise
revenues. The overall recognition of revenue will depend upon the nature of
the project and whether it is billed on a time and materials basis, or, on a
project milestone basis where invoices can only be raised on completion of
specific, pre-agreed objectives. The Company maintains complete and accurate
records of employees' time and expenditure on each project which is regularly
assessed to determine the percentage completion, and thereby whether it is
appropriate to recognise revenues.
As it satisfies its performance obligations, the Company recognises revenue
and the related contract asset with regards to the milestone based development
contracts. Revenues are recognised on a percentage of completion basis and as
such require estimation in terms of the assessment of the correct percentage
of completion for that specific contract.
Management judgement is based on a strong track record of successful
completion of projects and accurate forecasting of the time required together
with the hindsight period available to support the balance sheet date
assumptions made.
2. Segmental analysis
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.
Disaggregation of revenue
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 2024
30 Nov 2024 30 Nov 2023
£'000 £'000 £'000
Recognised at a point in time
Supply of products 2,895 1,071 2,926
Recognised over time
NRE design services 2,216 3,820 15,228
Consultancy design services 4,128 4,640 7,112
Licensing related income 30 22 -
6,375 8,482 22,340
9,270 9,553 25,266
By destination:
UK 990 1,413 2,513
Rest of Europe 7,094 4,639 9,863
Rest of the World 1,186 3,502 12,890
Total revenue 9,270 9,553 25,266
The nature of the work done 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 2024 there were three customers with sales of between
£1.3 million and £2.5 million making up 65% of revenues, with a further two
customers with sales of £0.5 million to £1.0 million resulting in the top
five customers contributing 77% of revenue. During the comparable period to 30
November 2023 there were five customers with sales between £1.0 million and
£2.0 million contributing 73% of total revenue.
The Group's non-current assets comprising investments, tangible and intangible
fixed assets, and the net assets by geographical location are:
30 Nov 2024 30 Nov 2023 31 May 2024
Non-current assets Net assets Non-current assets Net assets Non-current assets Net assets
£'000 £'000 £'000 £'000 £'000 £'000
United Kingdom 23,832 21,509 18,183 15,393 21,501 21,621
India 3 1,511 34 1,429 3 1,304
Brazil 56 14 65 120 58 (27)
Germany - (584) - (427) - (495)
23,891 22,450 18,282 16,515 21,562 22,403
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 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 2024 ended 31 May 2024
30 Nov 2023
£'000 £'000 £'000
Operating (loss)/ profit before interest (840) 58 872
Depreciation 241 227 495
Amortisation 389 230 322
EBITDA (210) 515 1,689
4. Taxation on profit
Six months Six months Twelve months
ended ended ended
30 Nov 2024 30 Nov 2023 31 May 2024
£'000 £'000 £'000
Current taxation
UK corporation tax credit 830 900 1,258
Foreign tax charge (30) (76) (183)
800 824 1,075
Deferred taxation
Origination and reversal of timing differences (644) - (1,205)
Tax credit/(charge) on (loss)/profit 156 824 (130)
5. Earnings per share
Six months ended 30 Nov 2024 Six months ended 30 Nov 2023 Twelve months ended
31 May 2024
(Loss)/profit used in calculating EPS (£'000) (1,200) 515 (182)
Number of shares for basic EPS ('000s) 83,604 78,115 80,747
Basic earnings per share (pence) (1.44) 0.66 (0.23)
Number of shares for diluted EPS ('000s) 83,604 80,134 80,747
Diluted earnings per share (pence) (1.44) 0.64 (0.23)
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 2024 2038 240 241 1,111 839 4,469
Additions 360 - - - 25 384
At 30 November 2024 2,338 240 241 1,111 6633 4,853
Depreciation
At 1 June 2024 (578) (42) (152) (183) (517) (1,472)
Charge for the year (91) (12) (21) (53) (64) (241)
Exchange adjustments - - (3) - (5) (8)
At 30 November 2024 (669) (55) (177) (236) (584) (1,721)
Net book value
At 30 November 2024 1,729 185 64 874 96 3,132
At 31 May 2024 1,460 198 89 928 322 2,997
At 30 November 2023 1,580 210 109 980 169 3,049
7. Intangible assets
Development costs Software Total
Intellectual
property
£'000 £'000 £'000 £'000
Cost
At 1 June 2024 21,903 123 39 22,065
Additions 2,575 - - 2,575
At 30 November 2024 24,478 123 39 24,640
Amortisation and impairment
At 1 June 2024 (3,417) (75) (7) (3,500)
Charge for the period (369) (11) (1) (381)
At 30 November 2024 (3,786) (87) (8) (3,881)
Net book value
At 30 November 2024 20,692 36 33 20,759
At 31 May 2024 18,486 48 31 18,565
At 30 November 2023 15,139 61 33 15,233
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 portion is dependent on the expected
life cycle of the CGU using a discount factor of 11.50% (2023: 11.5%), being
the cost of capital for the CGU.
8. Trade and other receivables
30 Nov 2024 30 Nov 2023 31 May 2024
Current £'000 £'000 £'000
Trade receivables 1,711 1,364 1,743
Other receivables 835 1,093 1,062
Prepayments 1,237 703 1,306
Accrued income 5,183 2,726 4,279
Total 8,966 5,886 8,390
9. Borrowings
30 Nov 2024 30 Nov 2023 31 May 2024
Current £'000 £'000 £'000
Bank loans 3,831 975 1,717
Non-current
Bank loans 1,879 2,764 2,298
Total 5,710 3,739 4,015
30 Nov 2024 31 May 2024
Movement in Loans £'000 £'000
Opening balance June 1(st) 4,015 4,167
Loan received 6,000 713
Interest accrued 426 572
Interest paid (414) (513)
Redemption of loans (3,567) -
Capitalisation of issue costs (290) -
Loan repayments (460) (920)
Closing balance 5,710 4,015
In November 2024, existing borrowings with carrying value of £3.6 million
were redeemed by way of a new Term Loan for £3.0 million, and a Revolving
Credit Facility (RCF) of £3.0 million, which was drawn down in 2 tranches.
The loan liability is stated net of unamortised loan issue costs of £290,000
at 30(th) November 2024 (2023: £140,000).
The bank loan of £3.0 million is secured by fixed and floating charges over
the assets of the group and bears interest at rates of 3.5% over the Bank of
England Base Rate. It is repayable in monthly instalments over the period to
November 2027.
The revolving credit facility of £3.0 million is secured by fixed and
floating charges over the assets of the group and bears interest at the Bank
of England Base Rate plus 2.5%.
Previous borrowings, which totalled £3.6 million at redemption attracted
interest as follows:
Loan 1: £1.0 million - 8% over SONIA if SONIA exceeds 10%
Loan 2: £1.9 million - 13% fixed rate; and
Loan 3: £0.7 million - 16% fixed rate.
10. Trade and other payables
30 Nov 2024 30 Nov 2023 31 May 2024
Current £'000 £'000 £'000
Trade payables 1,686 2,051 3,496
Taxation and social security 998 542 943
Other payables 156 166 170
Accruals 1,907 2,249 1,293
Contract liabilities 1,595 281 1,216
Total 6,342 5,289 7,118
11. Share capital
Allotted, called up and fully paid 30 Nov 2024 30 Nov 2023 31 May 2024
£'000 £'000 £'000
96,600,636 ordinary shares of £0.001 each 97 78 94
59,190 deferred shares of £1.00 each 59 59 59
156 137 153
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 2024 Six months to 30 Nov 2023 Twelve months to 31 May 2024
Name Services Transactions during the period Balance owing/ (owed) at 30 Nov 2023 Transactions during the period Balance owing/ (owed) at 30 Nov 2023 Transactions during the year Balance owing/ (owed) at 31 May 2024 £'000
£'000
£'000
Ensilica India Private Limited Semiconductor design services 500 1,138 586 770 954 (1,045)
EnSilica Do Brasil Sociedade Unipessoal Limitada Semiconductor design services 620 - 609 - 1,151 -
EnSilica GMBH Semiconductor sales services (163) (316) 150 (150) 207 478
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