Exactly. Nice momentum and generally the company is delivering on what it said it would do. And it seems to be growing in confidence - "we look forward to building on our robust new contract momentum in the remainder of the financial year and beyond." |
Nice contract again anyway. I can’t think of many (any?) other small stocks regularly adding long term revenue contracts. |
All we need is a takeover at this time , when we have to pay our Socialist Government 20% of any accrued profit at no cost to themselves , legalised robbery |
If the market doesn't start to move on price this is going to become a takeover. All that lovely contracted revenue would sit very nicely on the balance sheet of a larger company valued by PE at 20x or more. |
It's all future money in the bank though. Meanwhile the contracts and partnerships keep coming. Happy to hold and add on weakness as previously said. Sometimes the sprint turns in to a marathon - with mini sprints in between :) |
Good snapshot Dean. I expect costs are best case so I expect more drawdown, but the more contracts locked in the more likely an extension to the line of credit so I am pretty happy to stay onboard and accumulate if any sell off. |
Decent contract.
The issue is they are still burning a lot of cash due to the high investment in R&D.
In FY25 they are forecast to burn £5.2m in cash.
They are drawing down an extra £2m in bank loans and £1.3m of the last raise was received in FY25. Therefore the cash balance decreases by £1.9m in FY25, but they finish the year with £6m in Bank loans. |
New $30m contract over 10 years announced.
"The Contract will commence imminently, with NRE revenues falling into EnSilica's current and next financial years, underpinning current consensus market expectations."
"Out of the three prospective design and supply contracts in the negotiation stage that were referred to in the Company's announcement on 5 November 2024, two have now been secured and announced by EnSilica. These contracts come with significant upfront payments."
""We are very pleased to have secured our fifth design and supply contract this financial year, demonstrating our strong market reach and technical offering." |
Ah but they’ve spent a lot of time and hard effort on their CV’s.
I must try harder not to be cynical.
Anyway, quite happy with my investment here, although thats easy to say as I didn’t buy until quite recently. |
Yump (852) - To add to your comment - I wonder how many Fund Managers / Portfolio Managers have mortgaged their houses to raise cash to start a Fund? These people risk other peoples money on investment ideas they have, get rewarded handsomely when the hard working people within the business deliver and also get rewarded handsomely when they pick a loser (through annual management charges etc.). I am still looking for a Fund that does not make a charge if they lose you money :) |
I know the origins are often at personal risk, but by the time of listing imo things have often changed. Probably for the better for the businesses, as larger operational skills don’t always fit the startup skill set.
I think I’ve become cynical as a result of loss-making floats claiming that their float is to enable amazing expansion when they don’t even have a viable business.
Or debt-ridden businesses courtesy of VC. |
Yump you would be surprised how many listed companies start with what the US call a mom and pop or family and friends fundraiser, usually the VC funds and brokers expect this to have happened before they get first visit. I did a due diligence on an arms manufacturer who turned out to be a guy who built a Gatling gun in his garage with a cash advance on his credit card. He ended up with a few million from a euro vc fund and then listed for a while. |
ducatiman - of course your comment couldn't possibly apply to Ensilica, because we know that the company had unsecured debt facilities before it floated.
yump - Ian Lankshear started the company in 2001. I do not know if he had to mortgage his house to do so, but surely the track record for the following 21 years is more important? |
You may very well think that; I couldn't possibly comment.
;-)
I do think that AIM is probably very short of any CEO's or BOD's that have actually gone through the process of mortgaging their houses to start up a business previously. Or perhaps they have and thought it would be safer to write at length for a multi-page prospectus and float next time. Especially if they know the right people and connections.
I don't think there's been many Alan Sugars around for years. |
Profit is vital, peterrr3. If you are making a loss raising finance is a tough gig. But if you are generating operating cash flow and profitable but need cash for growth then finance should not be an issue. And I completely disagree with your statement that "anyone can engineer an accounting profit as easy as a tax loss... " but all I ask is that you please use terms correctly, "break-even" is a term used in analysing profitability (even a quick internet search demonstrates that). |
Well if R&D is capitalized, then best to ignore ebitda figures for starters.
You can float just an idea and the share price can reflect what in other businesses would require a few years decent profit.
It is always “buyer beware”. That doesn’t imply anything about the way a company presents itself, but more what sort of valuation it warrants on float.
Apart from the frequent Walter Mitty CEO’s of course. |
Cash flow is everything on AIM Val. Anyone can engineer an accounting profit as easy as a tax loss especially when you are playing loose with capitalising R&D. It is quite arbitrary. I've had lots of experience at this scale and bigger otherwise I wouldn't shoot my mouth off. |
peterrr3 - they have been more than breaking even for a while now. But based on some of your earlier comments you may be thinking about being free cash flow positive rather than profitability - in which case you really ought to say so, as it is very confusing. Profit is the main thing, being free cash flow positive is merely a function of the size and type of new contracts and the rate of growth. I completely reject the notion that ENSI has been devious in its admission document. ENSI in raising funds for ASIC development clearly explained that "The process from commencement of design to start of production can take two to five years depending on the industry sector."
I think that has always been understood by the market but clearly not by everyone. |
Trouble is all floats are caught between getting a good valuation on float - which needs lots of feel-good PR and the reality of raising more later, in an unknown future state of the market.
In some periods of the market, raising money was easy.
It also helps if the business being floated is making profits in its “new” form, if its already been trading and its having a change of strategy.
Realistically that is up to us to figure out to avoid getting caught in post-float share price declines. |
I think if they were up front about taking 4 years to break even from listing they would have garnered a bit more respect and tolerance, even from us trash buying AIM and maybe attracted investors with a slightly longer term view. Nope, they need to share the blame, not shift it. |
Need to add . after www to get the above link to work which is a presentation given in April. |
sorry link wont work. worth finding and watching.
A very candid quote about AIM 'ITS BEEN A ROUGH RIDE' Not happy at all with UK markets. We hear you! |
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