The Group has seen revenue rise by 12% after a boost in sales of their semiconductor wafers.
Companies: IQE plc
IQE (LON: IQE) has released their interims results for the first half of 2017 which outlines the increase in sales and revenue across all the Groups products, including their Wafers said to be used in the upcoming iPhone 8.
The news of IQE's products potentially being used in Apple's flagship product has seen the Group's share price grow more than 200% this year alone.
Today's interim numbers show revenue of £70.4m, an increase of 12% against H1 16, and Wafer sales of £69.4m were up 17% compared to the same period last year.
Sales in the Groups other markets were also up, including Wireless sales up 9%, Photonics up 48%, and Infrared up 19% compared with H1 of 2016. They also benefitted from a Forex tailwind of roughly 10% following the devaluation of sterling in 2016.
License income from joint ventures was down from £3.5m in H1 16 to £1m, reflecting that IQE benefitted from significant upfront license fees in H1 16. This 71% fall in licensing revenue has impacted overall profit margins for the Group, with adjusted PBT down 5% against the same period last year.
With the expected ramp up of mass market sales of the Group's products, investment in capex and product development also doubled to £15m, funded primarily through organic cash generation.
Group CEO Dr Drew Nelson is understandably optimistic about the future of the Company, commenting:
"Our broad portfolio of IP is a powerful competitive advantage which is enabling us to differentiate ourselves in the marketplace... IQE's outlook has never looked better. The broad range of customer engagements across multiple technologies and multiple end markets, provide a clear path to increase revenue diversity and accelerate growth over the coming months and years ahead."
IQE shares are trading down 5% this morning, while N+1 Singer published a note regarding the Interim results saying:
"We believe the shares remain attractive and retain our Key Buy recommendation."
IQE's share price today hovers around the 130p mark, up from 38p in January 2017. The Group's market cap is currently £947m, clearly baking in a lot of potential growth with a PE ratio of 38x versus the industry median of 24x.
With several multi-year contracts for mass market products in the pipeline, consensus forecasts the Group's already noteworthy growth to continue into 2018 and 2019.
