"they are clearly going to need more external finance, as they make clear."
Actually no, they made it clear they do not need more finance (with the possible exception of a very large contract win which would require substantial upfront funding for development). |
one's toe has been dipped. |
From the Albany note the interest rate on existing debt sends its own message. If Albany's estimate of the rate for the new Lloyds debt at 8% is correct then encouraging but how accurate? Also what, if any, trigger conditions for the rate to be increased. |
A drop always precipitates looking for business model reasons when it is often just a bit of selling.
As with many companies working towards decent profits, a current snapshot is misleading. The revenue vs profit ratio is always uncertain until the business reaches a critical size. Nobody promised a jump in ebitda for the year just reported. Waiting doesn’t suit everyone.
The gross margin in itself is a bit low but not a big problem.
Capitalising R&D is partly subjective, depending on whether you view the R&D as adding to future IP value or as a per-project cost. The first produces ongoing exceptionals and higher ebitda, the latter hits ebitda but results look cleaner because of fewer exceptionals.
Not sure institutional involvement is a good indicator. Double edged sword quite often. |
I hope not but there is no intrinsic value in the shares. The margins are so far insufficient to generate any meaningful profits, this is a tiny fish in a very large pond. All we really have is the 2025 EBITDA target and faith in the business model and the people executing it.
I have a horrid feeling that cash flow is going to be a big factor - the clients tend to be large multinationals, famous for screwing smaller supplers of goods and services. The only really good news for me has been the apparent decent flow of new business orders and the fact that the board and management appear really well qualified.
It is too small and risky for any serious funds yet - Amati has a small position presumably in their Aim Fund - but I can't see any other institutions among the bigger shareholders. And given the high level of skill required for employment here - surely implying high personnel costs - they are clearly going to need more external finance, as they make clear. |
Today's drop is on very low volume so I don't mind buying a few more. It should pop if a bunch of new contracts are signed soon. |
The concern is that they may require more funding as stated in the results of they get any delays on orders . The poor profit margin on contracts isn't helping to and that with the risks of funding are cashing the drip . Might see late 20s again without some good news.
They really need to either improve margin or slash costs here m they have decent revenue but simply not making enough off it |
blimey, would I be catching a falling knife? |
The Allenby Capital research note is out |
Yep yump 🤣 |
Glad I sold up before the results just after the new contract RNS.
Far too risky with Trump’s administration. |
I'm certainly looking for an entry point. could be support at 40p maybe not but definately looking attractive at these levels. |
Personally surprised by the fall in price as nothing really new came out and they are not raising equity for the first time with results although they have previously shot themselves in the foot by doing so after results so jury still out. They continue to deliver growth but patience needed to see it drop through to the bottom line.The brave will want to buy at this new level. |
Looks like about £35000 difference between buys and sells dropped the price 16% ! |
H,
Yes!
I was struck by the stark contrast between the CEO’s perspective and the Chairman's remarks at the Share Society presentation.
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Val,
CNC has managed expectations beautifully to date. RNS's, IMC's and the occasional interview with the CEO on a podcast - the story is crystal clear and not muddied.
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This looks most interesting from today's RNS:
"...to develop ASSPs, based upon customer demand and leveraging the funding available from lead customers, the European Space Agency and various semiconductor stimuli. EnSilica currently has two significant platforms at the device evaluation stage"
The CEO came across as quite animated when discussing the potential in the Satellite Communications division. Big potential. |
Well I have got very “picky” with possible problems with my small stocks, but I reckon 50% of that is because their market is rubbish at the moment. Problem started with rising interest rates and the cost of debt which our smaller businesses have had to deal with very suddenly, while trying to expand.
So lots have been caught between the rock of equity raises on depressed prices and the hard place of expensive debt. Vicious circle, but perhaps we are over the worst.
One day, the husinesses that have survived and are actually growing well, will burst into life.
I just hope they’re not taken over beforehand. |
Pug, but that's got nothing to do with ENSI and the going concern question!I agree on the investor part to a point, however plenty of ways to shelter a good chunk of investment gains if needed. |
Premium B - The changes to CGT rules will hit investors in AIM stocks - so potentially less attractive where no dividends and trusting on share price appreciation instead. |
Pug, I doubt the budget impacts ENSI in any meaningful way, so that seems way off the mark. But agree on "expects" - most things that are not concrete should be seen as "won't"! |
The paid for analysis pages see no issue with going concern or anything else for that matter.I'll not break copyright by posting here, however this drop was quite the surprise. |
paraone3 - Key red flag word is "Expect" Usually need to take with a very large sack of salt.
Going concern warning, after UK unfriendly Budget for business and investors, very valid (imo) Plus of course the very valid points raised above by yump and DG. |
Another interesting comment from the CFO was they expect 75% of revenue to come from chip supply by 2026 on 40% margins this will generate major cash revenues. |
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