EnSilica LON:ENSI, the AIM-listed, Oxfordshire-based integrated circuit designer and manufacturer, has published a mixed bag of results in its six-months report to the end-November published today (10th February).
EnSilica was one of our ‘penny stocks to watch’ and was founded in 2001. It manufactures ‘fabless’ Application-Specific Integrated Circuit (ASICs), which are tiny, custom-made computer chips designed for very specific tasks. In essence, tiny, specialized tools built for one particular job.
Fabless companies focus on chip/circuit design, developing the chip’s architecture, writing the code that makes them function, testing the design to make sure the chip does what it is supposed to do and then outsourcing their designs to foundries for manufacturing. Building a chip fabrication facility is hugely expensive and requires specialist expertise and equipment.
ENSI said that over the half-year it had more than doubled its chip supply revenue and had secured five new design and contract wins, with more contracts on the slate to close by the end of its financial year.
That said, in monetary terms revenue fell £300,000 year-on-year to £9.6m. Earnings remained in the negative at £0.2m, but improved £300,000 y-o-y. The company reported an operating loss of £800,000 slipping back from its breakeven position at the same time this year. EnSilica’s cash reserves fell £2.4m to £2.8m.
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Refocus on high-growth, high-tech
The company underwent a strategic review and decided to refocus its effort on the parts of the market which were high-growth and tech-driven; something of an obvious conclusion. However, the strategy has seen its chip supply revenue increase 164% from £1.1m to £2.9m. Management are feeling financially secure, having successfully completed a £6m debt refinancing, which gave the chip maker access to an additional £2.1m of working capital. The firm has deployed some of this capital investing in its own intellectual property and tooling, to the tune of £2.6m.
Designed in Britain, Made in… elsewhere
Core to EnSilica’s growth is its design non-recurring engineering, which is one-off prototype design for a client that may take that design into mass-production. The company is focusing on the high-skill, high-value end of the market, that the British Prime Minister has said is vital to the UK’s growth story and where the country can add value in global technology markets, as opposed to the capital-intensive manufacturing part of the sector.
The company has had commercial success in this area, evidenced by the five new contract wins it secured in the last six-months, and said it has a strong sales pipeline to the end of the financial year and beyond. But the company, following its strategic review, is looking to diversify its revenue streams and is continuing its fabless chip supply to key customers in defence, automation and healthcare fulfilling £2.9m in supply in the period, and securing £6m of supply revenue for FY25.
Management explained that its £200,000 EBITDA loss was attributable to its investment in IP and tooling, but expected this situation to switch once the revenues from the five new contracts start to be delivered and lead to full-year profits.
EnSilica in transition
The company’s shares opened the week at 48.03p, down just shy of 2% over one-year. However it’s been a ride for investors with the company’s share price ranging from 38p to 75p over 52-weeks. The stock took a bit of a hit in line with the falls across the Atlantic experienced by Nvidia NASDAQ:NVDA and other tech companies on the release of Chinese AI system DeepSeek, falling to 42p, but had a bit of a rally the next week. The company has a market cap of £47.3m.
EnSilica’s latest results paint a picture of a company in transition—balancing growth in high-value chip design and supply with ongoing financial challenges. While securing new contracts and increasing chip supply revenue are promising signs, the decline in overall revenue and continued losses highlight the difficulties of scaling in a competitive market and shifting focus. Investors will be watching closely to see if the company’s strategic shift and recent investments translate into long-term profitability and stability in the coming months and its confidence in finishing the year well.
