News Article
IQE revenues up 44 percent thanks to wireless
The robust wireless business and diversification strategy drives strong rises in revenues, profit and earnings
IQE has announced its final results for the year ended 31st December 2013.
The firm achieved a new Group record of £126.8 million, up from £88.0 million in 2012.
This includes £30.9 million revenues from Kopin Wireless, acquired in January 2013. However, the company was affected by adverse H2 currency impact as sterling appreciated 3 percent against the US dollar.
H2 wireless sales were up 3 percent over H1 in constant currency and H2 photonic sales were up 12 percent over H1 (in constant currency). The adjusted PBT was up 51 percent to £13.0 million from £8.6 million (Reported PBT £5.2 million).
The adjusted fully diluted EPS increased 43 percent to 2.00p from 1.40p (Reported fully diluted EPS 0.89p). Cash inflow from operations before exceptional items was up 346 percent from £4.7 million to £16.2 million.
Cash conversion before exceptional items was 111 percent up from 51 percent. Net debt was £34.4 million (opening net debt £15.5 million increased primarily due to £25 million of debt to part fund the Kopin acquisition.
Drew Nelson, IQE Chief Executive, made the following statement:
“IQE’s core wireless division has again delivered a robust performance, with continued growth despite a significant downstream inventory correction in the major chip companies due to softness in the high end smartphone market. As a direct result of our customer risk mitigation strategy, which we have executed over the last 18 months and completed with the acquisition of Kopin Wireless, we are much less sensitive to market share shifts between the major chip supply companies.
“Concerns in the UK over the last year that silicon CMOS would significantly damage the Compound Semiconductor industry have proved unfounded and are not reflected in our financial performance nor in our customers’ expectation of future long term demand drivers.
“Wireless remains an attractive market for us over the coming years with demand continuing to be driven by the proliferation of wireless applications and the need for sophisticated GaAs chips to deal with the explosive growth in data traffic. Beyond this, the next waves of innovation which will drive handset replacement cycles are likely to include lasers and sensors using compound semiconductor technology, for gaming, 3D image capture, gesture recognition, and sensing for a variety of applications including healthcare monitoring devices.
“Our business diversification strategy also gained strong traction, and we achieved a number of significant technical and commercial milestones during 2013 which reflect the strong progress made in our other key markets including photonic sensors and lasers, advanced solar (CPV), power semiconductors, infrared, LED and advanced electronics.
“Our integration remains firmly on track, and we expect to realise significant reductions in our financial overheads, whilst benefiting greatly from the operational and technical synergies we are delivering.
“IQE is at the forefront of the enabling technologies that are at the very heart of many of the twenty-first century trends and products. We are confident that the Group is well positioned for continued growth in earnings and cash flow in 2014 and beyond.”
The firm achieved a new Group record of £126.8 million, up from £88.0 million in 2012.
This includes £30.9 million revenues from Kopin Wireless, acquired in January 2013. However, the company was affected by adverse H2 currency impact as sterling appreciated 3 percent against the US dollar.
H2 wireless sales were up 3 percent over H1 in constant currency and H2 photonic sales were up 12 percent over H1 (in constant currency). The adjusted PBT was up 51 percent to £13.0 million from £8.6 million (Reported PBT £5.2 million).
The adjusted fully diluted EPS increased 43 percent to 2.00p from 1.40p (Reported fully diluted EPS 0.89p). Cash inflow from operations before exceptional items was up 346 percent from £4.7 million to £16.2 million.
Cash conversion before exceptional items was 111 percent up from 51 percent. Net debt was £34.4 million (opening net debt £15.5 million increased primarily due to £25 million of debt to part fund the Kopin acquisition.
Drew Nelson, IQE Chief Executive, made the following statement:
“IQE’s core wireless division has again delivered a robust performance, with continued growth despite a significant downstream inventory correction in the major chip companies due to softness in the high end smartphone market. As a direct result of our customer risk mitigation strategy, which we have executed over the last 18 months and completed with the acquisition of Kopin Wireless, we are much less sensitive to market share shifts between the major chip supply companies.
“Concerns in the UK over the last year that silicon CMOS would significantly damage the Compound Semiconductor industry have proved unfounded and are not reflected in our financial performance nor in our customers’ expectation of future long term demand drivers.
“Wireless remains an attractive market for us over the coming years with demand continuing to be driven by the proliferation of wireless applications and the need for sophisticated GaAs chips to deal with the explosive growth in data traffic. Beyond this, the next waves of innovation which will drive handset replacement cycles are likely to include lasers and sensors using compound semiconductor technology, for gaming, 3D image capture, gesture recognition, and sensing for a variety of applications including healthcare monitoring devices.
“Our business diversification strategy also gained strong traction, and we achieved a number of significant technical and commercial milestones during 2013 which reflect the strong progress made in our other key markets including photonic sensors and lasers, advanced solar (CPV), power semiconductors, infrared, LED and advanced electronics.
“Our integration remains firmly on track, and we expect to realise significant reductions in our financial overheads, whilst benefiting greatly from the operational and technical synergies we are delivering.
“IQE is at the forefront of the enabling technologies that are at the very heart of many of the twenty-first century trends and products. We are confident that the Group is well positioned for continued growth in earnings and cash flow in 2014 and beyond.”
