54% revenue jump drives return to profitability, outlook strong
17 March 2008
IQE plc (AIM: IQE, “the Group”), the leading global supplier of advanced wafer products and wafer services to the semiconductor industry, has announced its Preliminary Results for the year ended 31 December 2007.
- Revenues jump 54% to £50.1m (2006: £32.4m), up 69% at constant exchange rates
- Continued margin improvement with gross profit up 250% to £8.2m (2006: £2.3m)
- EBITDA profit up £5.6m at £3.9m (2006: loss £1.7m) before exceptional items
- Operating profit up £4.6m at £0.6m (2006: loss £4.0m) before exceptional items
- Cash generated from operations £1.9m (2006: outflow £4.4m)
- Return to operating profitability demonstrating powerful, highly leveraged business model
- Year of strong delivery on strategy
- Continued focus on high growth global markets driven by high speed wireless communications, mobile devices, solar cells and solid state lighting
- Acquisitions made during 2006 successfully integrated into Group and contributed strongly
- Firmly established as industry leader in advanced wafer outsourcing
Q1 2008 continuing strongly, with revenues currently running between 30 to 40% ahead of 2007
Market conditions continuing to show robust demand for Gallium Arsenide (GaAs) based products driven principally by 3G and other high speed wireless applications
Strong forward demand for GaAs wafers is a consequence of the rapidly increasing number of GaAs components in each high speed mobile communication device, resulting in demand growth for GaAs components which is significantly outstripping growth in the overall handset and wireless communication markets.
Dr Drew Nelson, IQE Chief Executive, commenting on the results said:
“2007 saw the third consecutive year of substantial revenue growth averaging 50% per annum and a return to operating profitability as a result of delivering on our strategy, and our clear focus on high growth markets
“Our major markets have continued to be driven by the increasing demand for GaAs based components for high speed, feature rich mobile devices that demand the high levels of performance and functionality that our products deliver. IQE is now widely recognised as the global market leader in advanced semiconductor wafer outsourcing.
“Our strategy of focusing on rapidly growing technologies has given us a solid base from which we can deliver continued and sustainable growth.
“Now that we are generating profits and cash from operations we have also put in place significantly enhanced banking facilities to support our continued growth. In the current economic climate, this new facility signals a resounding vote of confidence in IQE’s strategy, its business model and management team.
“We have maintained our strong growth throughout the first quarter of 2008, and continue to see robust forward demand from our customers, particularly in the high speed wireless communications sector. We are confident of another year of strong growth.”
Download Full Preliminary Report (pdf: 72KB)
NOTE TO EDITORS
IQE is the leading global supplier of advanced semiconductor wafers with products that cover a diverse range of applications, supported by an innovative outsourced foundry services portfolio that allows the Group to provide a 'one stop shop' for the wafer needs of the world's leading semiconductor manufacturers.
IQE uses advanced crystal growth technology (epitaxy) to manufacture and supply bespoke semiconductor wafers ('epi-wafers') to the major chip manufacturing companies, who then use these wafers to make the chips which form the key components of virtually all high technology systems. IQE is unique in being able to supply wafers using all of the leading crystal growth technology platforms.
IQE's products are found in many leading-edge consumer, communication, computing and industrial applications, including a complete range of wafer products for the wireless industry, such as mobile handsets and wireless infrastructure, Wi-Fi, WiMAX, base stations, GPS, and satellite communications; optical communications, optical storage (CD, DVD), laser optical mouse, laser printers & photocopiers, thermal imagers, leading-edge medical products, barcode, high efficiency LEDs and a variety of advanced silicon based systems.
The manufacturers of these chips are increasingly seeking to source wafers from specialist foundries such as IQE in order to reduce overall wafer costs and accelerate time to market.
IQE also provides bespoke R&D services to deliver customised materials for specific applications and offers specialist technical staff to manufacture to specification either at its own facilities or on the customer's own sites. The Group is also able to leverage its global purchasing volumes to reduce the cost of raw materials. In this way IQE's supply services, provide compelling benefits in terms of flexibility and predictability of cost, thereby significantly reducing operating risk.
IQE operates six manufacturing facilities located in Cardiff (two) and Milton Keynes in the UK; in Bethlehem, Pennsylvania and Somerset, New Jersey in the USA; and Singapore. The Group also has 11 sales offices located in major economic centres worldwide.