Pure Wafer (PUR), a provider of silicon wafer reclamation services to blue-chip companies, turned a profit in the year to 30 June for the first time in half a decade. The company looks to have finally put the financial difficulties of the past few years behind it and is now firmly in recovery mode.
This is attested by the record manufacturing volumes being achieved at both its Swansea and Prescott, Arizona, facilities. Increased volumes are driving economies of scale and manufacturing costs per wafer are down 4 per cent year on year. An ongoing capital investment programme is meant to further increase capacity of 300mm wafers by 40 per cent later this year, too, and is being financed entirely from cash flow.
Most encouragingly, Pure Wafer's balance sheet has been greatly strengthened. A £4.5m placing and open offer during the period allowed the company to successfully refinance its debt. Net debt has subsequently fallen from $12.5m (£7.7m) a year ago to a paltry $1.6m at the year-end. Strong trading so far in the current financial year and positive industry trends in the semiconductor market should help Pure Wafer turn net cash positive by the year-end, according to analysts at WH Ireland.
The broker forecasts current year adjusted pre-tax profits of $3.9m and EPS of 1.5¢, up from $3m and 1.4¢ in fiscal 2013.
PURE WAFER (PUR) | ||||
|---|---|---|---|---|
| ORD PRICE: | 8.25p | MARKET VALUE: | £22.1m | |
| TOUCH: | 7.75-8.25p | 12-MONTH HIGH: | 10.5p | LOW: 3.4p |
| DIVIDEND YIELD: | nil | PE RATIO: | 9 | |
| NET ASSET VALUE: | 12¢* | NET DEBT: | 5% | |
| Year to 30 Jun | Turnover ($m) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 27.8 | -7.82 | -29.4 | nil |
| 2010 | 24.8 | -8.02 | -5.1 | nil |
| 2011 | 29.7 | -5.10 | -3.6 | nil |
| 2012 | 35.8 | -0.68 | -0.2 | nil |
| 2013 | 37.0 | 2.97 | 1.4 | nil |
| % change | +3 | - | - | - |
*Includes intangible assets of $7m, or 2.6¢ a share £1=$1.62 | ||||
