Ensilica: Oxford chip designer shares tumble as ‘slower’ UK economy blamed for contract delays
Shares in UK-based semiconductor designer Ensilica tumbled as much as 10 per cent on Tuesday morning after it said a dragging economy has delayed some of its contracts.
During the second half of the year, the AIM-listed company said its mix of business changed “reflecting the slower economy”. This has impacted the start of new supply contracts which are now expected to begin in the first quarter of 2025.
But Ensilica also said it is expecting record revenues of around £25m for the year ended May 2024, up on the £20.5m it reported last year.
The chip company anticipates post-tax profit to rise to £1.9m, up on £1.8m in 2023, while EBITDA for the year is expected to be around £1.8m, compared to £1.6m in the previous year.
It said these results were “buoyed by continued new business momentum, the execution of significant contracts with key customers and a maturing of the supply business model.”
This included a recent technology win with a major European automotive and industrial semiconductor supplier and a $20m (£16m) supply win for a new US customer.
Oxford-headquartered Ensilica designs and provides custom computer chips to international clients in the automotive, industrial, healthcare and communications markets using a so-called fabless model.
In 2023 it designed three new chips for smartphones and artificial intelligence, which it said will “lead to long-term supply related revenues” within the next nine to 18 months.
The firm announced a strong order book and sales opportunity pipeline, which currently stands at more than $500m (£400m).
At the end of April cash balances were £1.3m and net debt was £2.1m. Ensilica also said its new subsidiary in the US is “progressing well”.
Management is confident the company can deliver revenues in excess of £30m and EBITDA of at least £5m in 2025.