REG - IQE PLC - IQE plc: FY 2025 Financial Results
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RNS Number : 0349G IQE PLC 28 May 2026
IQE plc
Cardiff, UK
28 May 2026
Full Year 2025 Results
- Improved H2 trading momentum carrying into 2026
- Successful conclusion of Strategic Review and fundraise transforms
Group's capital structure
- IQE positioned for long-term sustainable growth
IQE plc (AIM: IQE, "IQE" or the "Group"), the leading global supplier of
compound semiconductor wafer products and advanced material solutions, today
announces its results for the full year ended 31 December 2025.
Jutta Meier, Chief Executive Officer of IQE, commented:
"We were encouraged to see market conditions improve in the second half of the
year. This reflected a positive trajectory in key sectors including photonics
for AI and data centres, aerospace and defence, and wireless products for
consumer electronics.
"The £81m fundraise from key partners is a transformational investment for
IQE, giving us the balance sheet strength to invest in our future growth,
while maintaining our global asset base.
"IQE is uniquely positioned as a critical enabler of the world's
fastest-growing technology ecosystems. In particular, accelerating demand for
our Indium Phosphide (InP) solutions supporting data centre and AI markets is
expected to be a material growth driver throughout 2026 and beyond.
"Taken together, a stronger IQE, coupled with favourable market conditions
directly benefitting the business, gives me great confidence for the future."
FY 2025 Financial Summary:
FY 2025 FY 2024 Change
£'m
£'m
(%)
Revenue 97.3 118.0 (17.6)
Adjusted EBITDA(1) 3.2 8.1 (60.1)
Adjusted loss before tax (27.9) (22.3)
Reported loss before tax (37.0) (36.9)
Adjusted net cashflow from operations 11.2 6.1
Reported net cashflow from operations 8.1 1.3
Cash capital expenditure(2) (5.1) (11.4)
Adjusted net debt(3) (31.5) (18.8)
Cash and cash equivalents 15.7 4.7
Reported Diluted EPS (3.77p) (3.96p)
Adjusted Diluted EPS (2.82p) (2.46p)
1. Adjusted EBITDA is earnings before interest, tax, depreciation,
amortisation and certain non-cash charges, non-operational items and
significant infrequent items set out in Note 4 in the financial statements
section.
2. Cash capital expenditure stated is Property, Plant and Equipment cash
capex.
3. Adjusted net debt is calculated as cash less borrowings but excluding lease
liabilities and fair value gains/losses on derivative instruments.
FY 2025 Financial Highlights:
· Revenue for FY 2025 decreased at £97.3m (FY 2024: £118.0m).
‒ Photonics revenue of £57.1m (FY 2024: £49.9m) increased 15%
year-on-year driven by funding releases for certain US military and defence
programmes in H2 2025 and continued growth in AI and data centre-related
markets.
‒ Wireless revenue of £40.1m (FY 2024: £67.3m) decreased 40%
year-on-year reflecting uncertain macroeconomic conditions in the first half
of the year and softness in mobile handset demand with some end customer
requirements met from existing inventory.
· Adjusted EBITDA of £3.2m (FY 2024: £8.1m), decreased 60%
year-on-year, resulting in an adjusted EBITDA margin of 3% (FY 2024: 7%). This
reduction reflects a lower revenue base and the underutilisation of
manufacturing assets and capacity.
· Reported net cashflow from operations of £8.1m (FY 2024: £1.3m)
increased in the year, reflecting the impact of working capital movements.
· Cash capital expenditure (PP&E) of £5.1m (FY 2024: £11.4m) to
support the Group's strategic GaN-related capacity investment into the power
electronics and advanced display (microLED) markets and other high growth
sectors.
· Cash and cash equivalents of £15.7m as at 31 December 2025, with
adjusted net debt of £31.5m (FY 2024: £18.8m).
2026 fundraise:
Following the conclusion of the Strategic Review, IQE announced a fundraise of
£81m, with the net proceeds to be used to repay the Group's existing
Revolving Credit Facility with HSBC Bank, support the Group's working capital
requirements and ongoing strategic investment. This significantly strengthens
the Group's overall financial position.
The fundraise included a £45m strategic investment from MACOM Technology
Solutions Inc. ("MACOM") in the form of £30m of equity and £15m in new
non-interest bearing convertible loan notes. Concurrently, IQE and MACOM also
entered into long-term supply agreements.
The remainder of the fundraise comprised a £23m redemption and reinvestment
of convertible loan notes by existing noteholders, as well as a £13m Placing
and Retail Offer.
Following the completion of the fundraise and the repayment of the Group's
Revolving Credit Facility with HSBC Bank, IQE will receive net cash inflows of
£27.9m.
Current trading and outlook:
Trading in Q1 2026 was in line with management expectations, with strong
demand across all core segments. In particular, IQE is seeing accelerated
demand for the Group's InP solutions, which support optical photonics products
for data centre and AI infrastructure, and expects this to be a material
growth driver throughout FY 2026 and beyond.
Alongside this, IQE is seeing ongoing strength in aerospace and defence
markets, as well as VCSEL and wireless products supporting the consumer
smartphone industry.
Revenue for FY 2026 is expected to exceed 20% growth year-on-year, with strong
order book visibility into H2. This is expected to result in a high-single
digit to low double-digit adjusted EBITDA position.
Business update:
Connect
Accelerated demand across customer base due to rapid growth in AI-driven
hyperscale data centres, alongside mobile handsets, infrastructure and defence
· Multiple Tier 1 InP photonics design wins position the Group for
future volume production in next-generation optical interconnect markets for
data centres.
· Secured multiple development orders with leading global technology
customers developing ultra-fast GaN-on-Si microLED solutions to address
critical data centre network bottlenecks.
· Continued strong demand for GaN RF products across terrestrial,
satellite and defence radar platforms, driving further orders for
mission-critical sensing applications.
· Additionally, GaN RF infrastructure qualifications for use in
high-power space communications networks, including satellite internet
constellation platforms (Low Earth Orbit Satellites - LEOS), are progressing
simultaneously.
· Secured new design wins for 5G mobile handset power amplifier
applications, with potential for adoption across multiple future device
generations and platforms.
Sense
Strengthened position in advanced sensing platforms, with strong commercial
and strategic momentum across mobile, automotive safety, infrared imaging and
defence applications
· Successfully qualified and commenced production ramp of
second-generation 3D sensing VCSEL products for a leading global smartphone
platform, reinforcing position in premium consumer devices.
· Secured volume production orders for automotive-qualified VCSEL
products with a leading global optical sensing solutions provider, supporting
in-cabin driver safety monitoring systems.
· Long-wavelength infrared (LWIR) products qualified for production at
a Tier 1 customer, supporting demand ramp across autonomous vehicle, defence
and advanced imaging applications.
· Increasing demand for large-diameter (6 and 8-inch) GaSb-based
epiwafers from defence customers enabling more cost-effective production of
ultra-high resolution infrared sensors.
Display
Progressed technological capabilities and customer engagement in
next-generation microLED display ecosystems targeting future consumer devices
· Expanded partnership and renewed development supply agreement with a
leading multinational consumer in advanced microLED AR/VR displays, with
programmes progressing towards early-stage production.
· Delivered 8-inch RGB (red, green and blue) epitaxy for silicon
integration, expanding customer qualifications and supporting new consumer
microLED display opportunities.
· Launched advanced epitaxy capabilities through functional
wafer-surface coatings, providing customers with a single step to integrate
GaN microLEDs into silicon foundry manufacturing flows.
Power
Establishment of long-term strategic foundations and strengthening global
supply chains in next-generation GaN power to meet rising demand across data
centres, space and aerospace
· Progressing qualification of GaN-on-Si power epitaxy for
next-generation AI and hyperscale data centre power supply applications.
· Development of GaN power devices for space and aerospace
applications, including lighter, more efficient and radiation-resistant power
management circuits.
· Expanding foundry partner ecosystem to broaden geographic reach and
strengthen supply chain flexibility.
Operational updates:
· Continued focus on fiscal discipline and tight controls over
discretionary spending.
· Ongoing portfolio optimisation to ensure existing asset base is fully
focused on value creation across core customers and technologies.
· Operational excellence driving yield improvements and manufacturing
efficiencies.
· Global site optimisation programme continuing with exit from Silicon
site in South Wales completed in H2 2025, following cessation of
manufacturing operations in Q1 2025.
Board update:
· As expected following completion of the Strategic Review, Mark Cubitt
returned to the role of Non-executive Chair and Harmesh Suniara stepped down
from the Board as representative of Lombard Odier, which does not intend to
nominate an alternate representative.
· IQE's Board has approved the appointment nominations of Robert
Dennehy, MACOM Chief Operating Officer, and David O'Carroll, MACOM Vice
President, as Non-executive Directors, subject to completion of customary
Nomad due diligence.
· IQE intends to appoint a permanent Chief Financial Officer in due
course.
Results presentation:
IQE will present its FY 2025 Results via webcast at 9:00am today, 28 May 2026.
If you would like to view this webcast, please register by using the below
link and following the instructions:
https://brrmedia.news/IQE_FY25 (https://brrmedia.news/IQE_FY25)
Contacts:
IQE plc
+44 (0) 29 2083 9400
Jutta Meier
Mark Cubitt
Amy Barlow
Peel Hunt (Nomad and Joint Broker)
+44 (0) 20 7418 8900
Ben Cryer
Kate Bannatyne
Adam Telling
Deutsche Numis (Joint Broker)
+44 (0) 20 7260 1000
Hugo Rubinstein
Iqra Amin
Headland Consultancy (Financial PR)
+ 44 (0) 20 38054822
Andy Rivett-Carnac: +44 (0) 7968 997 365
Chloe Francklin: +44 (0)78 3497 4624
GLOSSARY
GaN - Gallium Nitride
GaSb - Gallium Antimonide
InP - Indium Phosphide
ABOUT IQE
http://iqep.com
(https://www.globenewswire.com/Tracker?data=yZf7NKp1JKLALUCxlBuC8wkLnLAqoe5-kjjIlkMIDci9q9W0x_02bwZV-eorSbpLXZxy4zi3xHh-O4FM8nWjeg==)
IQE is the leading global supplier of advanced compound semiconductor wafers
and materials solutions that enable a diverse range of applications across:
· Smart Connected Devices
· Communications Infrastructure
· Automotive and Industrial
· Aerospace and Security
As a scaled global epitaxy wafer manufacturer, IQE is uniquely positioned in
this market which has high barriers to entry. IQE supplies the global market
and is enabling customers to innovate at chip and OEM level. By leveraging the
Group's intellectual property portfolio including know-how and patents, it
produces epitaxy wafers of superior quality, yield and unit economics.
IQE is headquartered in Cardiff UK, with employees across manufacturing
locations in the UK, US and Taiwan, and is listed on the AIM Stock Exchange in
London.
Financial Statements
Financial Summary
2025 2024
£'000 £'000
Revenue 97,300 118,034
Adjusted EBITDA (see below) 3,237 8,112
Operating loss
• Adjusted* (20,964) (18,357)
• Reported (30,059) (32,958)
Loss after tax
• Adjusted* (27,439) (23,734)
• Reported (36,695) (38,178)
Net cash flow from operations
Adjusted* (Note 4) 11,180 6,087
Reported 8,070 1,282
Free cash flow**
Before adjusted* cash flows 2,037 (4,948)
Reported (1,073) (9,753)
Adjusted net (debt)/cash*** (31,484) (18,800)
Equity shareholders' funds 89,694 134,110
Basic EPS - adjusted**** (2.82p) (2.46p)
Basic EPS - unadjusted (3.77p) (3.96p)
Diluted EPS - adjusted**** (2.82p) (2.46p)
Diluted EPS - unadjusted (3.77p) (3.96p)
* The adjusted performance measures for 2025 and 2024 are reconciled in
Note 4.
** Free cash flow is defined as net cash inflow of £11,155,000 (2024:
outflow of £910,000) before cash inflows from financing activities of
£15,821,000 (2024: £12,160,000) and net interest paid of £3,593,000 (2024:
£3,317,000).
*** Adjusted net (debt)/cash is defined as cash less borrowings but excluding
lease liabilities and fair value gains/losses on derivative instruments.
**** Adjusted EPS measures exclude the impact of certain non-cash
charges, non-operational items and significant infrequent items that would
distort period on period comparability (see Note 5).
Consolidated income statement for the year ended 31 December 2025
2025 2024
£'000 £'000
Revenue 97,300 118,034
Cost of sales (95,948) (113,588)
Gross profit 1,352 4,446
Selling, general and administrative expenses (27,758) (29,982)
Impairment loss on intangible assets (9,586) (3,772)
Impairment loss on property, plant and equipment (402) (4,615)
Impairment loss on right-of-use asset (245) (31)
Gain on disposal of foreign operation 8,167 -
Gain on remeasurement of right-of-use asset - 202
Impairment loss on trade receivables and contract assets (787) (3)
(Loss)/profit on disposal of intangible assets and property, plant and (800) 797
equipment
Operating loss (30,059) (32,958)
Finance income 294 -
Finance costs (7,269) (3,947)
Adjusted loss before income tax (27,939) (22,304)
Adjustments (9,095) (14,601)
Loss before income tax (37,034) (36,905)
Taxation 339 (1,273)
Loss for the year (36,695) (38,178)
Loss attributable to:
Equity shareholders (36,695) (38,178)
(36,695) (38,178)
Loss per share attributable to owners of the parent during the year
Basic loss per share (3.77p) (3.96p)
Diluted loss per share (3.77p) (3.96p)
Adjusted basic and diluted loss per share are presented in note 5.
All items included in the loss for the year relate to continuing operations.
Consolidated statement of comprehensive income for the year ended 31 December
2025
2025 2024
£'000 £'000
Loss for the year (36,695) (38,178)
Exchange differences on translation of foreign operations* (3,508) (826)
Cumulative exchange differences on disposal of foreign operations** (8,167) -
Total comprehensive expense for the year (48,370) (39,004)
Total comprehensive expense attributable to:
Equity shareholders (48,370) (39,004)
(48,370) (39,004)
* Items that may subsequently be reclassified to profit or loss.
** During the year the Group liquidated it's Singapore entities, MBE
Technology Pte Ltd and CSDC Private Ltd. On liquidation, the cumulative
foreign exchange translation gain of £8,167,000 previously recognised in
equity was reclassified to profit or loss in accordance with IAS 21.48(c). No
proceeds were received on liquidation.
Items in the statement above are disclosed net of tax.
Consolidated balance sheet as at 31 December 2025
2025 2024
£'000 £'000
Non-current assets
Intangible assets 17,244 28,950
Property, plant and equipment 95,253 113,674
Right-of-use assets 38,146 42,210
Deferred tax assets 282 -
Total non-current assets 150,925 184,834
Current assets
Inventories 18,665 20,009
Trade and other receivables 28,093 37,424
Cash and cash equivalents 15,653 4,660
Assets held for resale - 120
Total current assets 62,411 62,213
Total assets 213,336 247,047
Current liabilities
Trade and other payables (29,345) (34,405)
Current tax liabilities (27) (428)
Bank borrowings (26,816) -
Convertible loan notes (20,321) -
Lease liabilities (4,691) (5,658)
Provisions for other liabilities and charges (645) (774)
Total current liabilities (81,845) (41,265)
Non-current liabilities
Trade and other payables (1,683) (2,035)
Bank borrowings - (23,460)
Lease liabilities (39,862) (44,872)
Deferred tax liabilities - (774)
Provisions for other liabilities and charges (252) (531)
Total non-current liabilities (41,797) (71,672)
Total liabilities (123,642) (112,937)
Net assets 89,694 134,110
Equity attributable to the shareholders of the parent
Share capital 9,783 9,672
Share premium 155,972 155,972
Retained losses (122,339) (85,644)
Exchange rate reserve 19,946 31,621
Other reserves 26,332 22,489
Total equity 89,694 134,110
Consolidated statement of changes in equity for the year ended 31 December
2025
Share Share premium Retained Exchange Rate reserve Other reserves Total
capital
earnings / (losses)
equity
£'000
£'000 £'000
£'000 £'000 £'000
At 1 January 2025 9,672 155,972 (85,644) 31,621 22,489 134,110
Comprehensive expense
Loss for the year - - (36,695) - - (36,695)
Other comprehensive expense for the year - - - (11,675) - (11,675)
Total comprehensive expense for the year - - (36,695) (11,675) - (48,370)
Transactions with owners
Share-based payments - - - - 3,637 3,637
Proceeds from shares issued 111 - - - - 111
Equity component of convertible loan notes - - - - 206 206
Total transactions with owners 111 - - - 3,843 3,954
At 31 December 2025 9,783 155,972 (122,339) 19,946 26,332 89,694
Share Share premium Retained earnings/ Exchange Rate Other reserves Total
capital
reserve
equity
£'000 (losses)
£'000
£'000
£'000 £'000
£'000
At 1 January 2024 9,615 155,844 (47,466) 32,447 19,345 169,785
Comprehensive expense
Loss for the year - - (38,178) - - (38,178)
Other comprehensive expense for the year - - - (826) - (826)
Total comprehensive expense for the year - - (38,178) (826) - (39,004)
Transactions with owners
Share-based payments - - - - 3,177 3,177
Tax relating to share options - - - - (33) (33)
Proceeds from shares issued 57 128 - - - 185
Total transactions with owners 57 128 - - 3,144 3,329
At 31 December 2024 9,672 155,972 (85,644) 31,621 22,489 134,110
Other reserves relate to share-based payments.
Consolidated cash flow statement for the year ended 31 December 2025
2025 2024
£'000 £'000
Cash flows from operating activities
Adjusted cash inflow from operations 11,180 6,087
Cash impact of adjustments (3,110) (4,805)
Cash generated from operations 8,070 1,282
Interest received 294 -
Interest paid (3,887) (3,317)
Income tax paid (754) (841)
Net cash generated from/(used in) operating activities 3,723 (2,876)
Cash flows from investing activities
Purchase of property, plant and equipment (5,092) (11,359)
Purchase of intangible assets (165) (1,609)
Capitalised development expenditure (3,096) (1,877)
Proceeds from disposal of property, plant and equipment and intangible assets 114 4,906
Acquisition of subsidiary, net of cash received* (150) (255)
Adjusted cash used in investing activities (8,503) (15,022)
Cash impact of adjustments - proceeds from disposal of property, plant and 114 4,828
equipment
Net cash used in investing activities (8,389) (10,194)
Cash flows from financing activities
Proceeds from issuance of ordinary shares 111 185
Issue of convertible loan notes 18,000 -
Expenses associated with the issuance of convertible loan notes (715) -
Proceeds from borrowings 4,105 19,493
Repayment of borrowings - (4,048)
Payment of lease liabilities (5,680) (3,470)
Net cash generated from financing activities 15,821 12,160
Net increase/(decrease) in cash and cash equivalents 11,155 (910)
Cash and cash equivalents at 1 January 4,660 5,617
Exchange losses on cash and cash equivalents (162) (47)
Cash and cash equivalents at 31 December 15,653 4,660
*Acquisition of subsidiary, net of cash received relates to deferred
consideration paid in respect of the Group's acquisition of Compound
Semiconductor Centre Limited in 2023.
1. General information
IQE plc ('the Company') and its subsidiaries (together 'the Group') develop,
manufacture and sell advanced semiconductor materials. The Group has
manufacturing facilities in Europe, United States of America and Asia and
sells to customers located globally.
IQE plc is a public limited company incorporated in the United Kingdom under
the Companies Act 2006. The Company is domiciled in the United Kingdom and is
quoted on the Alternative Investment Market (AIM). The address of the
Company's registered office is Pascal Close, St Mellons, Cardiff, CF3 0LW.
2. Material accounting policies
The principal accounting policies applied in the preparation of these
consolidated financial statements are set out below. These policies have been
consistently applied to all years presented.
2.1 Basis of preparation
The financial statements have been prepared and approved by the Directors in
accordance with UK adopted international accounting standards ('UK adopted
IFRS'). The financial statements have been prepared under the historical cost
convention except where fair value measurement is required by IFRS. The
preparation of financial statements in conformity with IFRS requires the use
of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the Group's accounting
policies.
2.2 Going concern
The Directors have prepared forecasts and cash flow projections for a period
of at least 12 months from the date of approval of these financial statements.
These forecasts include the impact of the Fundraising completed on 28 May 2026
(see Note 7). Whilst cash has not yet been received, the directors have
assessed the risk of not receiving the cash as remote.
Base case
The Directors' base case is derived from the Group's latest Board-approved
FY26 and H1 FY27 forecasts.
The base case incorporates an expected improvement in market conditions and
has been prepared using the following key assumptions:
· the Fundraising will be used to repay existing CLNs and existing
bank debt in Q2 FY26
· revenue growth of at least 20% in FY26 and H1 FY27, consistent
with guidance and current analyst consensus
· a GBP: USD exchange rate of 1.34 applied throughout the forecast
period
· direct wafer product margin broadly consistent with 2025 actual
performance
· labour cost increases in line with market expectations and
non-labour cost inflation consistent with the current environment; and
· capital expenditure of mid-single digit £ millions in FY26 and
H1 FY27.
Under the base case scenario, the Group is expected to comply with its banking
covenants before repayment of loans, then maintain sufficient liquidity to
meet its liabilities as they fall due over the forecast period. Liquidity
headroom is forecast to reduce from £11.7m in December 2025 to £6.1m in May
2026, prior to receipt of funds from the Fundraising, and to increase
thereafter to a minimum of £34.0m.
Severe but plausible downside
The Directors have also considered a severe but plausible downside scenario.
The severe but plausible downside case was prepared by applying the following
downsides with no mitigating actions:
· revenue is assumed 9% down on the base case for H1 2026, 20% down
for H2 2026 and 24% down for H1 2027 resulting from a combination of delays in
expected market recovery and the impact of greater forecasting uncertainty the
further out into the future
· in line with the revenue reduction in both years, there is a
reflective reduction in variable operating costs for 2026 and H1 2027.
Under the severe but plausible downside scenario, the Group is expected to
comply with its banking covenants before repayment of loans, then maintain
sufficient liquidity to meet its liabilities as they fall due over the
forecast period. Liquidity headroom is forecast to reduce from £11.7m in
December 2025 to £6.0m in May 2026, prior to receipt of funds from the
Fundraising, before increasing following the Fundraising and subsequently
declining to a minimum of £23.6m within the forecast period to June 2027.
The Group is forecast to maintain a strong positive liquidity position
throughout the 2026 and H1 2027 going concern assessment period, under both
the base case and severe but plausible downside scenario. Accordingly, the
Directors are satisfied that the Group and Company have adequate cash
resources to continue in operational existence and to meet their liabilities
as they fall due for a period of at least 12 months from the date of approval
of these financial statements. The Directors therefore consider it appropriate
to adopt the going concern basis of accounting in the preparation of the Group
consolidated financial statements and the Company financial statements.
2.3 Changes in accounting policy and disclosures
a) New standards, amendments and interpretations
The following new standards, amendments and interpretations have been adopted
by the Group for
the first time for the financial year beginning on 1 January 2025:
· Amendment to IAS 21 'The Effects of Changes in Foreign Exchange
Rates' which establishes how a spot exchange rate is estimated when a currency
lacks exchangeability.
The adoption of this amendment has not had a material impact on the financial
statements of the Group or parent company.
b) New standards, amendments and interpretations issued but not effective and
not adopted early
Several new standards, amendments to standards and interpretations which are
set out below are effective for annual periods beginning after 1 January 2026
and have not been applied in preparing these consolidated financial
statements:
· Annual Improvements to IFRS Accounting Standards-Volume 11 which
contains various improvement and enhancements to existing standards
· IFRS 18 'Presentation and disclosure in financial statements'
which includes new requirements for presentation and disclosure with a focus
on the income statement
· IFRS 19 'Subsidiaries without public accountability: disclosures'
is a voluntary standard that contains a reduced disclosure framework for use
by eligible subsidiaries that prepare financial statements applying IFRS
Accounting Standards
· Amendments to the Classification and Measurement of Financial
Instruments (Amendments to IFRS 9 and IFRS 7) which provides further
clarification and requirements for the recognition and derecognition criteria
for financial assets and liabilities, the classification requirements for
financial assets and disclosure requirements related to the amendments to the
classification requirements
· Amendments to contracts referencing nature-dependent Electricity
(Amendments to IFRS 9 and IFRS 7) for power purchase agreements
· Amendments to sale or contribution of assets between an investor
and its associate or joint venture (Amendments to IFRS 10 and IAS 28)
The Directors anticipate that at the time of this report none of the new
standards, amendments to standards or interpretations are expected to have a
material effect on the financial statements of the Group or parent company.
2.4 Alternative performance measures
Income Statement
Alternative income statement performance measures are disclosed separately in
the financial statements after several adjusted non-cash items,
non-operational items and significant infrequent items that would distort
period-on-period comparability, where it is deemed necessary by the Directors
to do so to provide further understanding of the financial performance of the
Group. Adjusted items are material items of income or expense that have been
shown separately due to the significance of their nature or amount. The tax
impact of adjusted items is calculated applying the relevant enacted tax rate
for each adjusted item. Details of the adjusted items are included in Note 4.
Balance Sheet
Alternative balance sheet performance measures for net debt are disclosed
separately in the financial statements after adjustments to exclude lease
liabilities and fair value gains/losses on derivative instruments where it is
deemed necessary by the Directors to do so to provide further understanding of
the financial position, gearing and liquidity of the Group.
Cash flow Statement
Alternative cash flow statement performance measures are disclosed separately
in the financial statements that reflect the cash impact of adjusted items
included in alternative income statement performance measures. Adjusted items
are material items of income or expense that have been shown separately due to
the significance of their nature or amount. Details of the adjusted items are
included in Note 4.
3. Segmental analysis
3.1 Description of segments and principal activities
The Chief Operating Decision-Maker is defined as the Executive Leadership Team
('ELT'). The ELT consists of the Chief Executive Officer and Chief Financial
Officer, Chief Technology and Operating Officer, Chief Revenue Officer and the
Executive VP General Counsel, Company Secretary and Chief People Officer. The
ELT consider the group's performance from a product perspective and have
identified three primary reportable segments:
• Wireless - this part of the business manufactures and sells compound
semiconductor material for the wireless market which includes radio frequency
devices that enable wireless communications.
• Photonics - this part of the business manufactures and sells compound
semiconductor material for the photonics market which includes applications
that either transmit or sense light, both visible and infrared.
• CMOS++ - this part of the business manufactured and sold advanced
semiconductor materials related to silicon which included the combination of
the advanced properties of compound semiconductors with those of lower-cost
silicon technologies. The Group has continued to report the CMOS++ segment
separately during 2025 due to the significance of the restructuring costs
associated with the cessation of activities in this area and the closure of
its silicon manufacturing site in South Wales. Starting in 2026, the Group
will no longer report CMOS++.
The ELT primarily use revenue and a measure of adjusted EBITDA to assess the
performance of the operating segments. Measures of total assets and
liabilities for each reportable segment are not reported to the ELT and
therefore have not been disclosed.
3.2 Adjusted EBITDA
Adjusted EBITDA excludes the effects of significant non-cash, non-operational
or significant and infrequent items of income and expenditure which may have
an impact on the quality of earnings, such as restructuring costs, CEO and CFO
recruitment costs, CEO severance costs and impairments where the impairment is
the result of an isolated, non-recurring event. Adjusted EBITDA also excludes
the effects of equity settled share-based payments.
Finance costs are not allocated to segments because treasury and the cash
position of the group is managed centrally.
Revenue 2025 2024
£'000 £'000
Wireless 40,101 67,295
Photonics 57,134 49,876
CMOS++ 65 863
Revenue 97,300 118,034
Adjusted EBITDA
Wireless 6,565 16,205
Photonics 8,398 5,840
CMOS++ (122) (1,517)
Central corporate costs (11,604) (12,416)
Adjusted EBITDA 3,237 8,112
Depreciation (19,613) (20,343)
Amortisation (4,588) (6,390)
Gain on remeasurement - 202
Profit on disposal of PPE - 62
Adjusted operating loss (20,964) (18,357)
Wireless (3,016) 6,520
Photonics (5,410) (10,568)
CMOS++ (226) (1,663)
Central corporate costs (12,312) (12,646)
Adjusted items (see note 4)
Wireless 6,810 (7,441)
Photonics (9,209) (5,974)
CMOS++ (4,385) (669)
Central corporate costs (2,311) (517)
Operating loss (30,059) (32,958)
Wireless 3,794 (921)
Photonics (14,619) (16,542)
CMOSS++ (4,611) (2,332)
Central corporate costs (14,623) (13,163)
Finance income 294 -
Finance costs (7,269) (3,947)
Loss before tax (37,034) (36,905)
Adjusted items include £10,233,000 (2024: £8,418,000) of non-cash impairment
charges of which £nil (2024: £5,519,000) relates to the wireless segment,
£7,984,000 (2024: £3,259,000) relates to the photonics segment and
£2,249,000 (2024: £nil) relates to the CMOS++ segment.
4. Adjusted performance measures ('APM')
The Directors assess the operating performance of the Group based on both
statutory and adjusted measures. Adjusted measures include adjusted earnings
before interest, tax, depreciation, amortisation, impairment and profit/loss
on disposal of PPE and intangibles (AEBITDA), AEBITDA margin, adjusted
operating loss, adjusted loss before income tax and adjusted losses per share.
These measures are collectively described as Adjusted Performance Measures
(APMs). The Directors believe that APMs provide a useful comparison of
business trends and performance and allow management and other stakeholders to
better compare the performance of the Group between periods, excluding the
effects of certain non-cash charges, non-operational items and significant
infrequent items that would distort period on period comparability. The Group
uses these APMs for internal planning, budgeting, reporting and assessment of
the performance of the business. The term adjusted is not defined under IFRS
and therefore the APMs may not be directly comparable with similarly titled
measures used by other companies.
Adjusted profit measures
The following table summarises the statutory and adjusted profit and loss
account measures for the year together with the adjustments made to each line
item.
Adjusted Adjusted 2025 Adjusted Adjusted 2024
Results Items Reported Results Items Reported
£'000 £'000 Results £'000 £'000 Results
£'000 £'000
Revenue 97,300 - 97,300 118,034 - 118,034
Cost of sales (94,868) (1,080) (95,948) (112,543) (1,045) (113,588)
Gross profit/(loss) 2,432 (1,080) 1,352 5,491 (1,045) 4,446
SG&A (22,609) (5,149) (27,758) (24,109) (5,873) (29,982)
Impairment of intangibles - (9,586) (9,586) - (3,772) (3,772)
Impairment of PPE - (402) (402) - (4,615) (4,615)
Impairment of right-of-use assets - (245) (245) - (31) (31)
Gain on disposal of foreign operation - 8,167 8,167 - - -
Gain on remeasurement of right-of-use asset - - - 202 - 202
Impairment loss on trade receivables and contract assets (787) - (787) (3) - (3)
(Loss)/profit on disposal of PPE and assets held for sale - (800) (800) 62 735 797
EBITDA 3,237 (6,229) (2,992) 8,112 (6,918) 1,194
Depreciation (19,613) - (19,613) (20,343) - (20,343)
Amortisation (4,588) - (4,588) (6,390) - (6,390)
Impairment of intangibles - (9,586) (9,586) - (3,772) (3,772)
Impairment of PPE - (402) (402) - (4,615) (4,615)
Impairment of right-of-use assets - (245) (245) - (31) (31)
Gain on disposal of foreign operation - 8,167 8,167
Gain on remeasurement of right-of-use asset - - - 202 - 202
(Loss)/profit on disposal of PPE and assets held for sale - (800) (800) 62 735 797
Operating loss (20,964) (9,095) (30,059) (18,357) (14,601) (32,958)
Finance income 294 - 294 - - -
Finance costs (7,269) - (7,269) (3,947) - (3,947)
Loss before tax (27,939) (9,095) (37,034) (22,304) (14,601) (36,905)
Taxation 500 (161) 339 (1,430) 157 (1,273)
Loss for the period (27,439) (9,256) (36,695) (23,734) (14,444) (38,178)
Loss per share attributable to owners of the parent company during the year
Basic loss per share (2.82p) 0.95p (3.77p) (2.46p) 1.50p (3.96p)
Diluted loss per share (2.82p) 0.95p (3.77p) (2.46p) 1.50p (3.96p)
Adjustments to operating profit
2025 Cost of sales £'000 SG&A Impairments Loss on disposal 2025 Tax 2025
£'000 £'000 £'000 Adjusted Impact Adjusted
Pre-Tax £'000 Items
Other gains Items £'000
£'000 £'000
Share-based payments (1,080) (2,379) - - - (3,459) (161) (3,620)
Share-based payments - CFO recruitment - (116) - - - - (116)
(116)
CEO severance - (21) - - - (21) - (21)
Photonics CGU impairment - - (7,984) - - (7,984) - (7,984)
Restructuring - (2,633) (2,249) (800) 8,167 2,485 - 2,485
Total (1,080) (5,149) (10,233) (800) 8,167 (9,095) (161) (9,256)
2024 Cost of sales £'000 SG&A Impairments Profit on disposal 2024 Tax 2024
£'000 £'000 £'000 Adjusted Impact Adjusted
Pre-Tax £'000 Items
Items £'000
£'000
Share-based payments (1,045) (1,929) - - (2,974) 157 (2,817)
Share-based payments - CEO recruitment - (77) - - - (77)
(77)
Share-based payments - CFO recruitment - (123) - - - (123)
(123)
CEO recruitment - (307) - - (307) - (307)
CEO severance - (416) - - (416) - (416)
Wireless CGU impairment - - (3,066) - (3,066) - (3,066)
Restructuring - (3,021) (5,352) 735 (7,638) - (7,638)
Total (1,045) (5,873) (8,418) 735 (14,601) 157 (14,444)
The nature of the adjusted items is as follows:
Share-based payments
The £3,459,000 (2024: 2,974,000) charge relates to share-based payments
recorded in accordance with IFRS 2 'Share-based payment'. Share-based payments
which arise each financial year are classified as an APM due to the non-cash
charge being partially outside of the Group's control as it is based on
factors such as share price volatility and interest rates which may be
unrelated to the performance of the Group during the period in which the
expense occurred.
Chief Financial Officer recruitment
The charge of £116,000 (2024: £123,000) relates to the share-based payment
charge for new starter awards granted to the CFO, Jutta Meier, who is also now
the Group CEO.
Chief Executive Officer Severance
The charge of £21,000 (2024: £416,000) relates to costs, primarily related
to payments in lieu of notice, associated with the termination of the former
CEO's employment.
Photonics CGU impairment
An impairment was identified in the year relating to the Photonics CGU
determined based on value-in-use calculations. The non-cash impairment loss of
£7,984,000 predominately relates to the Group's UK related photonics assets
and has been allocated to goodwill and the relevant UK based intangible and
tangible assets which has resulted in a non-cash intangible asset impairment
charge of £7,337,000 (including £7,215,000 relating to goodwill), non-cash
property, plant and equipment impairment charge of £402,000 and a non-cash
right-of-use asset impairment of £245,000.
Restructuring
The credit of £2,485,000 (2024: £7,638,000 charge) relates to the
consolidation of the Group's US, UK and Asian manufacturing operations and the
restructuring of the Group's Executive Leadership Team.
Group Restructuring
· Group restructuring charges of £145,000 (2024: £266,000)
consist of employee costs related to the restructuring of the Group's
Executive Leadership Team.
UK Restructuring
· UK restructuring charges of £4,259,000 (2024: £1,584,000)
relating to the consolidation of the Group's South Wales activities into its
Newport manufacturing site consist of employee-related costs of £198,000
(2024: £447,000), site decommissioning costs of £1,012,000 (2024:
£897,000), non-cash property, plant and equipment asset impairments of £nil
(2024: £343,000), non-cash intangible development and patent cost
impairments of £2,249,000 (2024: £nil) and loss on disposal of PPE of
£800,000 (2024: £103,000 profit on disposal). As of 31 December 2025,
cumulative restructuring charges of £5,483,000 (2024: £1,584,000) have been
incurred.
Asian Restructuring
· Taiwanese restructuring charges of £1,244,000 (2024: £155,000)
consist of £784,000 (2024: £155,000) legal and professional fees and
£460,000 (2024: £nil) of employee costs related to the Group's Strategic
Review and potential sale of its Taiwanese manufacturing operations. The
Strategic Review completed in the post balance sheet period (see Note 7) and
has not resulted in the sale of the Taiwanese operations. As of 31 December
2025, cumulative charges of £1,399,000 (2024: £155,000) linked to the
restructuring and potential sale of the manufacturing operation have been
incurred.
· Singapore restructuring credit of £8,167,000 (2024: £19,000)
relates to the gain on liquidation of the Singapore entities (MBE Technology
Pte Ltd and CSDC Private Limited) within the year. The gain arises as a result
of the cumulative foreign exchange translation gain of £8,167,000 previously
recognised in equity being reclassified to profit or loss in accordance with
IAS 21.48(c). No proceeds were received on liquidation. Prior year £19,000
relates to certain final cash receipts linked to the voluntary liquidation of
the Group's Singapore subsidiaries, where manufacturing operations ceased in
June 2022.
US Restructuring
· US restructuring charges of £nil (2024: £763,000) relating to
the closure of the Group's manufacturing facility in Pennsylvania.
· US restructuring charges of £34,000 (2024: £4,889,000) relating
to the strategic re-positioning of the Group's Massachusetts and North
Carolina manufacturing sites consist of non-cash property, plant and equipment
asset impairments of £nil (2024: £2,002,000), non-cash intangible
development cost impairments of £nil (2024: £2,887,000) and reactor
decommissioning costs of £34,000 (2024: £nil).
Wireless CGU impairment - prior period
An impairment was identified in the prior year relating to the Wireless CGU
determined based on value-in-use calculations. The non-cash impairment loss of
£3,066,000 related to the Group's US related wireless assets and was
allocated to the relevant US based intangible and tangible assets which
resulted in a non-cash intangible asset impairment charge of £885,000 and a
non-cash property, plant and equipment impairment charge of £2,181,000.
Chief Executive Officer recruitment - prior period
The charge of £nil (2024: £77,000) relates to the share-based payment charge
for new starter awards granted to the former CEO upon recruitment. The charge
of £nil (2024: £307,000) relates to costs associated with the cash element
of the new starter award granted to the former CEO upon recruitment.
Cash impact of adjusting items
The cash impact of adjusting items is set out below:
Cash Impact Cash from operations £'000 Investing activities 2025 Cash from operations Investing activities 2024
£'000 Total £'000 £'000 Total
£'000 £'000
Reported cash flows 8,070 (8,389) (319) 1,282 (10,194) (8,912)
Share-based payments - social security 94 - 94 123 - 123
CEO severance 240 - 240 196 - 196
Onerous contract 240 - 240 394 - 394
Restructuring 2,536 (114) 2,422 4,092 (4,828) (736)
Total adjusted items 3,110 (114) 2,996 4,805 (4,828) (23)
Adjusted cash flows 11,180 (8,503) 2,677 6,087 (15,022) (8,935)
Onerous contract
Onerous contract cash flows reflect royalty payments relating to the Group's
cREO™ technology where development activity ceased in prior periods totals
£240,000 (2024: £394,000).
Restructuring
Cash defrayed in the year from the restructuring of the Group's Executive
Leadership Team and the consolidation of the Group's US, UK and Asian
manufacturing operations totalled £2,422,000 (2024: £736,000 cash generated)
Group Restructuring
· Cash costs defrayed of £247,000 (2024: £64,000) consist of
employee-related costs related to the restructuring of the Group's Executive
Leadership Team following the departure of the former CEO.
US Restructuring
· Cash costs relating to the closure of the Group's manufacturing
facility in Pennsylvania total £18,000 (2024: £2,820,000). Cash proceeds on
disposal of the Pennsylvania site included in investing activities totals
£nil (2024: £4,061,000) in the year.
· Cash costs relating to the strategic re-positioning of the
Group's Massachusetts and North Carolina manufacturing sites total £41,000
(2024: £nil). Cash proceeds on disposal of US reactors included in investing
activities totals £114,000 (2024: £nil) in the year.
UK Restructuring
· Cash costs relating to the consolidation of the Group's South
Wales activities into its Newport manufacturing site total £1,262,000 (2024:
£1,072,000). Cash proceeds on disposal of property, plant and equipment is
included in investing activities and totals £nil (2024: £767,000) in the
year.
Asian Restructuring
· Cash costs relating to the Group's Strategic Review and potential
sale of the Group's Taiwanese manufacturing operations total £968,000 (2024:
£155,000). The Strategic Review completed in the post balance sheet period
(see Note 7) and has not resulted in the sale of the Taiwanese operations.
· Final cash receipts linked to the voluntary liquidation of the
Group's Singapore subsidiaries, where manufacturing operations ceased in June
2022 total £nil (2024: £19,000).
Adjustments to net debt
Adjusted net debt 2025 2024
£'000 £'000
Net debt (76,037) (69,330)
Lease liabilities due after one year 39,862 44,872
Lease liabilities due within one year 4,691 5,658
Adjusted net debt (31,484) (18,800)
5. Loss per share
Basic loss per share is calculated by dividing the loss attributable to
ordinary shareholders by the weighted average number of ordinary shares in
issue during the year.
Diluted loss per share is calculated by dividing the loss attributable to
ordinary shareholders by the weighted average number of shares and the
dilutive effect of 'in the money' share options in issue. Share options are
classified as 'in the money' if their exercise price is lower than the average
share price for the year. As required by IAS 33, this calculation assumes that
the proceeds receivable from the exercise of 'in the money' options would be
used to purchase shares in the open market to reduce the number of new shares
that would need to be issued.
The Directors also present an adjusted earnings per share measure which
eliminates certain adjusted items. The Directors believe that the adjusted
earnings per share measure provides a useful comparison of performance and
allows management and other stakeholders to better compare the performance of
the Group between the current and prior year, excluding the effects of certain
non-cash charges, non-operational items and significant infrequent items that
would distort period on period comparability. The adjustments are detailed in
Note 4.
2025 2024
£'000 £'000
Loss attributable to ordinary shareholders (36,695) (38,178)
Adjustments to loss after tax (Note 4) 9,256 14,444
Adjusted loss attributable to ordinary shareholders (27,439) (23,734)
2025 2024
Number Number
Weighted average number of ordinary shares 972,928,093 964,315,248
Potentially dilutive share options 14,929,308 14,291,760
Potentially dilutive convertible instruments 123,866,839 -
Adjusted weighted average number of ordinary shares 1,111,724,240 978,607,008
Adjusted basic loss per share (2.82p) (2.46p)
Basic loss per share (3.77p) (3.96p)
Adjusted diluted loss per share (2.82p) (2.46p)
Diluted loss per share (3.77p) (3.96p)
6. Cash generated from operations
Group 2025 2024
£'000 £'000
Loss before tax (37,034) (36,905)
Finance income (294) -
Finance costs 7,269 3,947
Depreciation of property, plant and equipment 16,021 16,552
Depreciation of right-of-use assets 3,592 3,791
Amortisation of intangible assets 4,588 6,390
Impairment of intangible assets 9,586 3,772
Impairment of property, plant and equipment 402 4,615
Impairment of right-of-use assets 245 31
Gain on disposal of foreign operation (8,167) -
Gain on remeasurement of right-of-use assets - (202)
Inventory impairment (reversals)/write-downs (59) 391
Non-cash movement on trade receivable expected credit losses (8) 3
Impairment of contract assets 795 -
Non-cash provision movements 610 288
Loss/(profit) on disposal of fixed assets 800 (797)
Share-based payments 3,575 3,174
Cash inflow from operations before changes in working capital 1,921 5,050
Decrease in inventories 648 3,677
Decrease/(increase) in trade and other receivables 6,949 (608)
Decrease in trade and other payables (472) (3,938)
Decrease in provisions (976) (2,899)
Cash inflow from operations 8,070 1,282
7. Post balance sheet events
Convertible loan note extension
On 18 February 2026, the Group exercised its option contained in its
convertible loan notes to extend the maturity of the instruments by 6 months
to 13 September 2026.
Fundraising
On 28 May 2026, the Group completed a financing (the 'Fundraising') which
raised gross proceeds of approximately £81,000,000.
The Fundraising comprised a subscription for new ordinary shares by a
strategic investor, MACOM Technology Solutions Holdings Inc, at an issue price
of 19.8 pence per share raising approximately £30,000,000, a placing and
retail offer of new ordinary shares at an issue price of 19.8 pence per share
raising approximately £13,000,000, the issue of £15,000,000 new convertible
loan notes (the 'New CLNs') to MACOM Technology Solutions Holdings Inc, and
the restructuring of the Company's existing convertible loan notes (the
'Existing CLNs').
Under the terms of the Fundraising, holders of the Existing CLNs agreed to the
redemption of their holdings. Approximately £23 million of the amounts due on
redemption was reinvested in new ordinary shares at the issue price, with the
balance settled in cash.
As the Fundraising was announced after the reporting date and the conditions
did not exist at that date, it is treated as a non-adjusting event in
accordance with IAS 10 Events after the Reporting Period. Accordingly, no
adjustment has been made to the amounts recognised in these financial
statements.
Following completion, the Fundraising resulted in a significant net cash
position for the Group with the net proceeds used to repay the Group's
existing RCF bank debt, support the Group's working capital requirements and
ongoing strategic investment, and significantly strengthen the Group's overall
financial position.
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