EnSilica - bullish AGM Trading Update could help to build up investor interest, shares 37.50p, brokers TP 55p

Ahead of today's AGM, Mark Hodgkins, the Chairman of EnSilica (LON: ENSI), a leading chip maker of mixed-signal Application Specific Integrated Circuits, sounded very bullish about his group's prospects.

He declared that -

"EnSilica remains well placed as a premier European chipmaker with global reach as we seek to further capitalise on the continued demand for custom silicon across our key growth markets."

The group reported strategic progress with six new ASIC design wins and nearly doubled chip-supply revenue for the year to end May, however, overall revenues declined due to customer-induced delays impacting NRE revenues.

The company has secured an estimated $250m in lifetime production revenues from existing designs and contracts, with an additional $469m in opportunities being pursued, particularly in Satellite Communications and Industrial sectors.

Recent contract wins include a $1.4m satellite payload project and a €865,000 contract, providing over 95% contracted visibility for FY 2026 revenue forecasts.

"I am pleased to report that EnSilica delivered important strategic progress across the year ended 31 May 2025 (the "Period"), securing six new ASIC design wins, reflecting both the breadth of customer demand and the strength of our position within the semiconductor value chain.

We also almost doubled our chip-supply revenue, demonstrating the continued maturing of our production pipeline as more customer programmes transition from development into volume delivery.

However, we are nonetheless disappointed that overall revenues for the year declined, driven by customer-induced delays on two contracted projects, which impacted the timing of our NRE revenues.

As our diverse portfolio of production programmes continue to build and as the new designs move to production, we expect our growing supply revenues to provide a natural buffer against the inherent lumpiness of the NRE revenues.

The team continues to deliver strong commercial momentum, with a significant and growing pipeline of opportunities across the Satellite Communications and Industrial sectors, alongside increasing adoption of our Post-Quantum Cryptography IP, which is now embedded across all of our focus markets.

Based on chips already in supply and design contracts already secured, our expected lifetime production revenues are now estimated at approximately $250m, with a further US$469 million of opportunities under active pursuit.

This momentum underpins the Board's confidence in the Group's near- to medium-term prospects.

The Company has continued to make notable customer progress in the high growth space communications sector.

Over the period we were awarded two new user-terminal feasibility programmes for separate satellite-service operators, as well as having three ongoing feasibility studies for satellite payload ASICs.

In addition, the Group achieved an important operational milestone, surpassing 10 million ASICs shipped into a premium automotive OEM's vehicle.

We recently announced the award of a UK Government contract to develop a quantum-resilient secure processor for critical national infrastructure applications.

This programme enables us to advance the core cybersecurity technologies that underpin our product roadmap across our focus markets and is another key differentiator for the Company."

My View

With recent new business momentum, including the $1.4m satellite payload project booked earlier this week and a further €865,000 contract booked subsequently, EnSilica now has contracted visibility of more than 95% of FY 2026 consensus revenue forecasts, while it remains well placed to achieve its FY 2026 guidance.

The £37m-capitalised group's shares, now at 37.50p, have been as High as 53.60p and as Low as 29.01p during this year.

It is worth noting that its Joint Broker, Panmure Liberum, has a 55-page research note out on the group, with a 55p Target Price.

After today's AGM Update, it is more than likely that we will shortly see a gentle stream of news coming from the group, ahead of what I would guess could be a £5m - £10m fundraise, possibly in the New Year, if not sooner.

(Profile 02.06.25 @ 34.50p set a Target Price of 43p*)

(Profile 23.07.25 @ 39p set a Target Price of 50p*)