REG - IQE PLC - IQE plc: Trading Update

IqeAnnouncement

18/11/2024 07:00

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RNS Number : 5857M  IQE PLC  18 November 2024

IQE plc

 

 

Cardiff, UK

18 November 2024

 

 

This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 as it forms part of UK domestic law by virtue of
the European Union (Withdrawal) Act 2018 ("MAR").

 

Trading Update, Strategic Review and Proposed Financing

 

 

IQE plc (AIM:  IQE, "IQE" or the "Group"), the leading global supplier of
compound semiconductor wafer products and advanced material solutions,
provides a trading update for the year ending 31 December 2024.

Revenue for the Full Year 2024 is expected to be broadly flat year-on-year,
resulting in around £115m. In line with the rest of the industry, we are
continuing to see a slower than anticipated recovery in key sectors driven by
weak consumer demand in end markets. The group expects this to result in an
Adjusted EBITDA of at least £5m.

Strategic Review

The Board remains confident in IQE's long-term prospects because of the
Group's leading position in providing advanced compound semiconductors across
several market verticals and to a base of global marque customers. The Board
believes there is significant value in IQE that is not currently reflected in
its market capitalisation. Consequently, IQE announces today that it will be
conducting a comprehensive strategic review of its asset base to ensure that
it has a strong capital position to further invest in its core operations (the
"Strategic Review"). The Board believes there is a significant market
opportunity in IQE's core operations and remains focused on reducing its cost
structure for profitable growth, servicing its customers and maximising value
for shareholders.

In the first instance, IQE will broaden its options in relation to the
proposed IPO of its Taiwan operations to include all strategic options,
including a full sale. The Board has retained Lazard to advise on the
Strategic Review. The Strategic Review will be overseen by IQE's Board of
Directors, with input from key stakeholders.

Proposed Financing

The Group is in the process of negotiating a proposal from Lombard Odier, its
largest shareholder, regarding short-term financing to help IQE navigate the
ongoing market softness. Lombard Odier's willingness to extend up to c.£15
million via a convertible loan note with a conversion price of 15p per share
(the "Proposed Financing") is a strong demonstration of Lombard Odier's
confidence in the embedded value within the Group. The Group intends to
consult with its other major shareholders regarding the Proposed Financing
following this announcement.

The Group also continues to have a constructive dialogue with HSBC, and the
Directors do not foresee the need to raise further equity should these ongoing
discussions progress as expected.

Mark Cubitt, Executive Chair of IQE, commented:

"The impact of the slow pace of recovery in the semiconductor industry can be
seen across the sector and is reflected in our revenue expectations for FY24.
Looking ahead, the strategic review, including the broader assessment of
options for our Taiwan operations, will ensure we have a strong capital base
to continue investing in our core business and support IQE's long-term
strategy. We remain committed to delivering maximum value for our shareholders
and serving our customers. We are confident in IQE's long-term prospects and
inherent value."

Contacts:

 

IQE plc

+44 (0) 29 2083 9400

Mark Cubitt

Jutta Meier

Amy Barlow

 

Lazard (Financial Adviser)

+44 (0) 20 7187 2000

Cyrus Kapadia

Keiran Wilson

Alexander Fiallos

 

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

Simon Willis

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

 

 

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 eight manufacturing
locations in the UK, US and Taiwan, and is listed on the AIM Stock Exchange in
London.

 

IMPORTANT NOTICES

Lazard & Co., Limited ("Lazard"), which is authorised and regulated in the
United Kingdom by the Financial Conduct Authority, is acting exclusively as
financial adviser to IQE and no one else in connection with the Strategic
Review and will not be responsible to anyone other than IQE for providing the
protections afforded to clients of Lazard & Co., Limited nor for providing
advice in relation to the Strategic Review or any other matters referred to in
this announcement. Neither Lazard & Co., Limited nor any of its affiliates
owes or accepts any duty, liability or responsibility whatsoever (whether
direct or indirect, whether in contract, in tort, under statute or otherwise)
to any person who is not a client of Lazard & Co., Limited in connection
with this announcement, any statement contained herein or otherwise.

 

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