Semiconductor manufacturer IQE (IQE) swung back into the black in the first half of the year with an adjusted operating profit of £4.3m. However, statutory losses deepened after the group ceased the development of one if its technologies and impaired the related intangibles.
That is not to undermine progress in the period: the company posted record revenues as both its key wireless and photonics divisions grew – boosting adjusted operating profit by 111 per cent and 294 per cent, respectively, compared with last year. It is perhaps not surprising then that the manufacturer felt confident enough to reintroduce guidance for the full year, placing revenues at £165m, which suggests growth of at least 18 per cent.
Elsewhere, a strong cash conversion rate pulled back net debt by more than half to £7.4m excluding lease liabilities, compared with £16m at the end of 2019. Management has also decided to close a site in Pennsylvania and consolidate its US MBE activities in North Carolina by 2024.
Broker Peel Hunt forecasts adjusted pre-tax profits of £1.8m and adjusted losses per share of 0.8p in the 2020 full year.
| IQE (IQE) | ||||
| ORD PRICE: | 61p | MARKET VALUE: | £ 486m | |
| TOUCH: | 61-61.3p | 12-MONTH HIGH: | 200p | LOW: 75p |
| DIVIDEND YIELD: | nil | PE RATIO: | NA | |
| NET ASSET VALUE: | 34p* | NET DEBT: | 21% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2019 | 66.7 | -3.7 | -1.38 | nil |
| 2020 | 89.9 | -6.2 | -0.66 | nil |
| % change | +35 | - | - | - |
| Ex-div: | na | |||
| Payment: | na | |||
| *Includes intangible assets of £115m, or 14p a share | ||||
