Ensilica is set to slump to a loss for the year after the British chipmaker suffered further delays to a major project and the knock-on effects of a ‘cybersecurity issue’ in the automotive sector.
The Oxfordshire-based group told investors on Thursday a significant contract with Italian telecoms firm Siae Microelettronica faces ‘extended delay’ because the customer is facing ‘cash constraints’.
Ensilica specialises in making mixed-signal application-specific integrated circuits (Asics) used by clients across a broad range of industries, including airlines, the automotive sector, healthcare and communications.
Siae has been awarded €149million in grant funding from the European Union for a product for which Ensilica says its Asics play ‘a critical role’.
But the funds will not be paid out until next year, forcing Ensilica to make a bad debt provision of £1.6million ‘for the outstanding amounts owed by Siae’ and to ‘prudently remove projected Siae-related income from future forecasts’, the group said.
EnSilica also flagged ‘a recent cybersecurity issue within an automotive customer’s supply chain’, which has led to the group revising expectations for chip supply volumes supplied to the customer next year.
EnSilica shares have slumped after another profit downgrade
EnSilica is the latest firm to flag the knock-on effects of a recent spate of high-profile cyberattacks on UK businesses, including automotive giant Jaguar Land Rover.
JLR’s temporary shutdown in response to the attack has had ramification across the group’s vast supply chain, prompting Government intervention to stop firms going bust.
The group said it now expects to announce full-year revenues of £18.2million for 2025 and an EBITDA loss of around £1.3million, compared to analyst expectations of earnings of £400,000 on revenues of £19.6million.
And the issues will also impact profitability next year, EnSilica said, as it forecast revenues of £28million to £30million for the 12 months ending 31 May 2026, with earnings before nasties of £3.5million to £4.5million.
This compares to market expectations of £5.1million EBITDA on revenues of £33million.
Ensilica shares fell 4.4 per cent to 43.5p in early trading, having lost 14 per cent over the last 12 months.
But boss Ian Lankshear reassured investors ‘it may well turn out that [Ensilica has] been too conservative’ with its new guidance, noting the group is still targeting an increase of more than 50 per cent in revenues in the current financial year.
Lankshear, who co-founded Ensilica in 2001 after stints at Hitachi and Nokia, added: ‘Frustrating as the impact of these two events are, they reflect the current stage of the development of the business.
‘As the business continues to scale up the individual impact of specific projects will mitigate through the growth in the breadth of our chip supply contracts.’
‘The opportunity remains substantial. We maintain our forecast for total lifetime revenue from supply contracts of over $250 million in chip supply revenues as the reduction from SIAE has been made up by increased demand from other clients.
‘Our overall position has strengthened during FY2025 as we have increased our customer base and further progressed projects towards supply with the associated long term revenue opportunity and we anticipate further customer wins in the current year.’
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This article was originally published by a www.dailymail.co.uk . Read the Original article here. .