Not great news, but not a disaster in my opinion.
It seems the concerns flagged recently about the JLR cyberattack have affected at least the management team’s FY26 forecast for now. Time will tell if it affects the balance sheet along with the SIAE bad debt provision.
More positively, while anticipated revenue is revised lower than originally forecast for FY26 (to between £28m to £30m) it would still represent a whopping 55% year on year growth when compared to FY25 if achieved. Most companies can only dream of such growth potential. Furthermore the update on decreased cash consumption, coupled with increasing profits from chip supply, also looks to have put cash flow concerns to bed in my opinion.
I am travelling today so will review the situation more fully in time, however while disappointed I will not be selling a share, as my medium term expectation appears to broadly remain on track.
https://www.londonstockexchange.com/news-article/ENSI/trading-update/17280894
In response to my post the following well thought out comment from u/InTroubleDouble was made on the Reddit EnSilica sub. My response also follows.
‘Very disappointing, no doubt about that. Since 2-3 years company performs below their own expectations and should think about their Communication and manage expectations better.
I am keeping engaged, but after 2 years of Investment it seems to take at least another 2 years. The £40m secured revenue over two years and £250m lifetime revenue for a Company with 40m market cap and currently 20m revenue still is an attractive Investment in my View. In combination with the hint that the company increased recurring revenues and will become cash positive shortly, keeps me generally positive on the stock. But it will definitely take few more years to develop.’
My reply:
‘Yes, although if accurate the core issues here are out of management’s control (i.e. the JLR cyberattack and SIAE bad debt provision) so not the fault of management in my opinion. Both may turn out to not be notable issues in time but management flagging up the issues is important, albeit their timing is somewhat tardy in my opinion.
I still see ENSI as a great investment and may even consider increasing my holding if the SP drops notably in the next few days with short term investors bailing for example.‘
The SP is holding up reasonably well in early trading in my opinion (down about 4.5% currently).
My instinct is telling me that the news had leaked before today, and that in time this may be seen as a buying opportunity.🤞