Wireless disappoints in otherwise solid year for IQE

Water products and services firm IQE reported on a solid year of growth on Tuesday, though it did face disappointment in its wireless arm in 2015.

The AIM-traded company reported a 2% rise in revenues to £114m,, with photonics sales up 28% to £16m. During the year, the company also added a new revenue stream with license income of £8m, though the growth was tempered by an 11% reduction in wireless sales to £79.5m.

IQE’s adjusted operating profit was up 8% to £19m, while its reported operating profit improved threefold to £21.2m.

Its reported profit after tax increased more than tenfold to £20.1m, from £2m.

Adjusted diluted earnings per share were up 7% to 2.6p, with reported diluted earnings per share up twelvefold to 2.9p. Cash generated from operations increased 41% to £21m, from £14.9m.

IQE’s balance sheet leverage was down 22% during the period to £40.3m, with net debt reducing 26% to £23.2m and deferred consideration down 17% to £17.1m.

"The group had another strong financial performance in 2015, with continued growth in revenues, profits and cash generation,” said chief executive Dr Drew Nelson.

"Our focus on building a strong IP portfolio reflects our vision of global leadership across a range of markets as advanced semiconductor materials become an increasingly important enabler of a wide range of electronics applications. This strategy underpins our strong financial performance, and the exciting outlook we see for our business,” he added.

Nelson said moving forward, the company envisaged a return to growth in wireless, accelerating growth in photonics, increasing contributions from power and solar, and continuing leverage of its IP position through licensing, new product development and introductions.

"We have had a good start to 2016, and are trading in line with our expectations. The outlook remains positive, which underpins the board's confidence that we remain on track to achieve our expectations for the full year."