2010 full year results: strong growth across all markets triples profits

29 March 2011

Strong growth across all markets triples profits

IQE plc (AIM: IQE, “IQE” or the “Group”), the leading global supplier of advanced wafer products and wafer services to the semiconductor industry, publishes final results for the year ended 31 December 2010.
Financial highlights

  • Revenues up 38% to £72.7m (2009: £52.7m); H2 unaudited revenues £39.6m
  • Continued improvement in gross margins, up from 21.9% to 22.8%
  • EBITDA up 63% to £13.1m (2009: £8.1m) reflecting high operational gearing
  • Pre-tax profit triples to £6.3m, (2009: £2.1m)
  • Basic EPS up 247% to 1.63p (2009: 0.47p)
  • Capital expenditure of £5.0m (2009: £1.7m) on additional capacity to meet expected continued growth in revenues
  • Strong conversion of EBITDA into operating cash of £10.2m (2009: £7.7m)
  • Tax credit of £1.2m due to R&D tax refunds (£0.5m) and recovery of tax losses (£0.7m)
  • Strengthened balance sheet following successful placing ; raising gross proceeds of £20.8m
  • Net cash of £7.0m (2009: Net debt £14.9m)

Operational highlights  

  • Strong revenue growth in primary markets reflects buoyant
  • end markets and increasing market share
  • Rapid revenue growth of range of emerging optoelectronic products signals move towards volume production
  • Further strengthening of IP portfolio, including grant of nanocolumn patent in Japan
  • Galaxy Compound Semiconductors, Inc. (‘Galaxy’), acquired in September 2010, has integrated well and performed very strongly

Dr Drew Nelson, IQE Chief Executive, said:
“2010 has been an outstanding year for the Group, with record revenues and profits achieved; a clear delivery on our strategic and operational goals.
“Our core business of high speed connectivity, including wireless-related products for all forms of mobile device communications has continued to show very strong growth, whilst new and emerging products for consumer, energy efficiency, industrial and defence applications are generating increased demand across all our key markets.
“We continue to make excellent progress in the development and commercialisation of key IP that we expect will contribute to revenues during 2011 and help to increase our competitive advantage and leading positions in a number of high-growth markets.
“In terms of the four technology ‘megatrends’ of this decade - high-speed communications, energy efficiency, security and lifestyle – we are helping drive these with our key enabling technologies. The Board remains confident that IQE is well positioned to continue its strong growth in 2011 and beyond.”  

Please click here to download the full results in PDF format (500kB)

IQE plc (+44 29 2083 9400) Drew Nelson Phil Rasmussen Chris Meadows
Espirito Santo Investment Bank (+44 20 7456 9191) Richard Crawley James Bromhead
College Hill (+44 20 7457 2020) Adrian Duffield Kay Larsen

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, ultra high brightness LEDs, a variety of advanced silicon based systems and high efficiency concentrator photovoltaic (CPV) solar cells.
The manufacturers of these chips are increasingly seeking to outsource wafer production to 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 outsourced services, provide compelling benefits in terms of flexibility and predictability of cost, thereby significantly reducing operating risk.
IQE operates a number of global manufacturing and R&D facilities: Cardiff, Milton Keynes and Bath in the United Kingdom; Bethlehem, Pennsylvania, Somerset, New Jersey and Spokane, Washington in the USA; and Singapore. The Group also has 11 sales offices located in major economic centres worldwide.