IQE announces strategic review
IQE plc, the British compound semiconductor wafer products and materials company, has provided a trading update for the year ending 31 December 2024, and, in light of the results, announced a strategic review.
Revenue for the full year 2024 is expected to be broadly flat year-on-year, resulting in around £115m. In line with the rest of the industry, the company says it is continuing to see a slower than anticipated recovery in key sectors driven by weak consumer demand in end markets. The group expects this to result in an adjusted EBITDA of at least £5m.
The board says it remains confident in IQE's long-term prospects because of its leading position in providing advanced compound semiconductors across several markets to a base of global customers.
The board believes there is significant value in IQE that is not currently reflected in its market capitalisation. To this end, the company says the strategic review of its asset base will ensure that it has a strong capital position to further invest in its core operations.
Mark Cubitt, executive chair of IQE, commented: "The impact of the slow pace of recovery in the semiconductor industry can be seen across the sector and is reflected in our revenue expectations for FY24. Looking ahead, the strategic review, including the broader assessment of options for our Taiwan operations, will ensure we have a strong capital base to continue investing in our core business and support IQE's long-term strategy. We remain committed to delivering maximum value for our shareholders and serving our customers. We are confident in IQE's long-term prospects and inherent value."
Proposed Financing
The group is in the process of negotiating a proposal from Lombard Odier, its largest shareholder, regarding short-term financing to help IQE navigate the ongoing market softness. Lombard Odier has said it is willing to extend up to c.£15 million via a convertible loan note with a conversion price of 15p per share (the Proposed Financing). This, says IQE, is is a demonstration of Lombard Odier's confidence in the value within the group. IQE says it intends to consult with its other major shareholders regarding the proposed financing following this announcement.
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