IQE PLC Iqe Plc : Trading Statement

 
TIDMIQE 
 
 
   IQE plc 
 
   Trading Statement 
 
   Significant growth in revenues and profits reflect increasing revenue 
diversification 
 
   Cardiff, UK. 20(th) July 2016: IQE plc (AIM: IQE; "IQE", the "Group"), 
the leading global supplier of advanced wafer products and wafer 
services to the semiconductor industry, provides a trading statement for 
the six months ended 30 June 2016. 
 
   The Group announces that it expects to deliver a significant increase in 
revenues and profits for the first half of 2016, compared with the same 
period in 2015 and continues to reduce its balance sheet leverage*. 
 
   Sales in the first half are expected to be at least 15% higher than H1 
2015, with the business enjoying an increasing diversification of 
revenues. 
 
   Photonics continues to grow rapidly, and is expected to deliver a double 
digit rate of growth in the first half.  It is widely accepted that the 
Photonics market will continue its rapid growth over the coming years as 
Vertical Cavity Lasers ("VCSEL") and Indium Phosphide Lasers ("InP") are 
increasingly adopted for a wide range of end market applications. These 
include consumer products, fibre optic communications, data centres and 
industrial processes. 
 
   License income from joint ventures is expected to be c.GBP3.5m for the 
half year, with both joint ventures making good progress. 
 
   Wireless and InfraRed sales are expected to show a slight year on year 
increase. 
 
   The depreciation of Sterling against the US Dollar due to Brexit 
occurred shortly before the end of the half year, and as a result the 
financial impact on the first half was limited (translated at average 
exchange rates).  However, the balance sheet impact was more significant, 
with a presentational increase in both assets and liabilities (converted 
at spot rate). Despite this, the Group has continued to reduce its 
leverage* in both Sterling and US Dollar terms due to its strong cash 
generation.  Deferred consideration for previous acquisitions will be 
completely eliminated by September 2016. Other than the impact of 
currency fluctuations, we do not see any material impact of the decision 
to exit the EU on our business or prospects. 
 
   The Group made good progress on new product development and 
qualifications during the half, strengthening its IP position, and 
re-enforcing a positive outlook. The Board remains confident that the 
Group is on track to achieve full year expectations. 
 
   Notice of Results 
 
   The Group will report its half year results for 2016 on 13 September 
2016. 
 
   Dr Drew Nelson, Chief Executive of IQE, said: 
 
   "The growth in IQE's sales and profits reflect the increasing 
diversification of its revenues, the growing breadth of its end markets, 
and the strength of its IP portfolio. As a result, the Group's strong 
cash generation continues to de-leverage* its balance sheet, with the 
deferred consideration from previous acquisitions on track to be 
completely eliminated by the end of September. 
 
   The Group's continued diversification of revenues is improving its 
resilience to end market fluctuations and our Photonics business 
continues to deliver strong double digit growth driven by a range of 
emerging end markets which are primed for significant and sustainable 
growth. 
 
   Our joint ventures have progressed well and have delivered license 
income of GBP3.5m, whilst our Wireless and InfraRed businesses were 
stable, delivering slight increases in revenues. 
 
   With the progress being made on new product qualifications, further 
product developments and with increasing revenue diversity, we remain on 
track to achieve full year expectations." 
 
   This announcement contains inside information. 
 
   * Leverage is defined as deferred consideration plus net debt. 
 
   Contacts: 
 
   IQE plc [phone] 
 
   Drew Nelson 
 
   Phil Rasmussen 
 
   Chris Meadows 
 
   Canaccord Genuity + 44 (0) 20 7523 8000 
 
   Simon Bridges 
 
   Cameron Duncan 
 
   Peel Hunt [phone] 
 
   Richard Kauffer 
 
   Euan Brown 
 
   Capital Access Group [phone] 
 
   Simon Courtenay 
 
   This announcement is distributed by NASDAQ OMX Corporate Solutions on 
behalf of NASDAQ OMX Corporate Solutions clients. 
 
   The issuer of this announcement warrants that they are solely 
responsible for the content, accuracy and originality of the information 
contained therein. 
 
   Source: IQE plc via Globenewswire 
 
   HUG#2029476 
 
 
  http://www.iqep.com 
 

(END) Dow Jones Newswires

July 20, 2016 02:00 ET (06:00 GMT)

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