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
Ian Lankshear, Chief Executive
Officer
www.ensilica.com
|
Via Vigo
Consulting
+44 (0)20 7390
0233
|
Allenby Capital Limited, Nominated Adviser &
Broker
Jeremy Porter / Vivek Bhardwaj
(Corporate Finance)
Joscelin Pinnington / Tony Quirke
(Sales & Corporate Broking)
|
Tel: +44 (0)20 3328
5656
info@allenbycapital.com
|
Vigo Consulting (Investor & Financial Public
Relations)
Jeremy Garcia / Kendall
Hill
ensilica@vigoconsulting.com
|
+44 (0)20 7390
0233
|
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
2024-20301. 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/
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
30 Nov
2023
|
Six months
ended
30 Nov
2022
|
Twelve months
ended
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)
|
(Loss)/profit before taxation
|
|
|
(309)
|
(202)
|
47
|
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
30 Nov
2023
|
Six months
ended
30 Nov
2022
|
Twelve months
ended
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
Unaudited
|
30 Nov
2022
Unaudited
|
31 May
2023
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
|
Total assets
|
|
|
28,099
|
22,858
|
27,487
|
|
|
|
|
|
|
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
ended
30 Nov
2023
Unaudited
|
Six months
ended
30 Nov
2022
Unaudited
|
Twelve months
ended
31 May
2023
Audited
|
|
|
|
£'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
ended
30 Nov
2023
|
Six months
ended
30 Nov
2022
|
Twelve months
ended
31 May
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
1 June
2022
|
Cash flow
|
Non-cash
changes
|
At
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
1 Dec 2022
|
Cash flow
|
Non-cash
changes
|
At
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
1 June
2023
|
Cash flow
|
Non-cash
changes
|
At
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
ended
30 Nov
2023
|
Six months
ended
30 Nov
2022
|
Twelve months
ended
31 May
2023
|
|
£'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
30 Nov
2023
|
Six months
ended
30 Nov
2022
|
Twelve months
ended
31 May
2023
|
|
|
£'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
ended
30 Nov
2023
|
Six months
ended
30 Nov
2022
|
Twelve
months
ended
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
ended
30 Nov
2023
|
Six months
ended
30 Nov
2022
|
Twelve months
ended
31 May
2023
|
|
£'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
30 Nov
2023
|
Six months
ended
30 Nov
2022
|
Twelve months
ended
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
|
Intellectual
property
|
Total
|
|
|
£'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
£'000
|
Transactions during the
period
|
Balance owing/ (owed) at 30
Nov 2022
£'000
|
Transactions during the
year
|
Balance owing/ (owed) at 31
May 2023 £'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)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|