IQE plc: 2021 Full Year Results
IQE plc(“IQE” or the
“Group”)2021 FULL YEAR RESULTS
Cardiff, UK29 March 2022
Strong operational progress in
2021Strategic
realignment a priority for 2022
IQE plc (AIM: IQE, "IQE" or the "Group"), the
leading supplier of compound semiconductor wafer products and
advanced material solutions to the global semiconductor industry,
announces its results for the full year ended 31 December 2021.
Americo Lemos, Chief Executive Officer
of IQE, said:
“In my first few months I have been very
impressed by the quality of IQE’s people, technology and customers.
As the only global outsourced epitaxy provider and a leader in our
field, IQE is uniquely placed to capitalise on major technological
trends while navigating a challenging external environment.
To secure this growth, we must first build a
commercial engine that is orientated to our end markets, focussed
on our customers and aligned with our technology innovation. My
vision is to grow IQE through multiple strategic and long-term
customer relationships. We will be developing this strategy more
fully during 2022 and I look forward to communicating further in
due course.”
FY 2021 Financials
|
FY 2021
£’m* |
FY 2020
£’m* |
Change(%) |
Constant currency change (%) |
Revenue |
154.1 |
178.0 |
(13%) |
(7%) |
Adjusted EBITDA** |
18.7 |
30.1 |
(38%) |
(17%) |
Operating loss |
(20.0) |
(5.5) |
|
|
Adjusted operating (loss) /
profit |
(6.5) |
5.4 |
|
|
Reported loss after tax |
(31.0) |
(2.9) |
|
|
Net cash flow from
operations |
18.9 |
35.5 |
(47%) |
|
Adjusted cash flow from
operations |
17.9 |
36.3 |
(51%) |
|
Capital investment
(PP&E) |
15.1 |
5.0 |
201% |
|
Net debt / (cash***) |
(5.8) |
1.9 |
|
|
Diluted EPS (p) |
(3.87p) |
(0.41p) |
|
|
Adjusted diluted EPS (p) |
(2.41p) |
0.29p |
|
|
* All figures £’m excluding diluted and adjusted
diluted EPS. ** Adjusted Measures: Alternative performance measures
are disclosed separately after a number of adjusted non-cash,
one-off or non-operational items 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 as detailed in note
4.*** Net debt excludes IFRS16 lease liabilities.The following
highlights of the full year results are based on these adjusted
profit measures, unless otherwise stated.
Operational Highlights
- Global
site optimisation programme
- Consolidation of
US MBE production at IQE’s larger and more scalable North Carolina
site following the closure of Pennsylvania site in 2024
- Closure of IQE’s
Singapore site by mid-2022 realising c.£4.8m per annum of cash
savings as part of our MBE consolidation plan
- Completion of
the acquisition of minority interests in IQE Taiwan Corporation in
December 2021
- Business
development progress
- Long-term
strategic collaboration agreement signed with GlobalFoundries® in
Q4 2021 to develop vital GaN on Si technologies for mobile and
wireless infrastructure applications
- Multi-year
strategic partnership signed in Q3 2021 with a major semiconductor
foundry to develop epiwafers for 5G small cells in Asia
- Technology
development
- Expansion of
VCSEL portfolio with turnkey IQVCSEL™ product line, with initial
deliveries made to multiple customers
- Achievement of
key power and reliability milestones for IQDN-VCSEL™ technology for
advanced sensing applications at longer wavelengths on 150 mm GaAs
substrates, relevant to future LiDAR technologies
- Scaling of VCSEL
on Ge technology (IQGeVCSEL) to 200 mm, enabling a step-change in
industry economics in support of broader adoption of 3D
sensing
- Business
transformation progress
- Business systems
and process transformation programme commenced to provide a
consistent, agile and scalable platform for business growth,
including strategic IT transformation agreement entered into with
Critical Manufacturing
Strategic
perspectives and
Outlook
Looking ahead, the Group is completing a full
review of strategy under new CEO, Americo Lemos. The refreshed
strategy for the Group will be completed and communicated in H2 and
will be focussed on the key principles of:
- Placing
customers at the centre of everything we do
- Taking a
markets/products based approach
- Maintaining our
technology innovation leadership
- Capturing
greater value through long term and strategic agreements
- Scaling while
optimising our global footprint
Operations remain resilient in 2022 to the
challenging macro-economic and geopolitical backdrop. The Group
continues to monitor and work to mitigate potential headwinds in
global semiconductor supply chains.
In 2022 the Group will focus on building a
platform for growth to deliver further progress in 2023 and beyond.
The Group is confident this refreshed strategy will enable a
multi-year cycle of growth, driven by the macro trends of 5G, IoT
and the Metaverse, as the global economy and semiconductor markets
recover from current risks and disruption.
Overall, the Group expects to grow revenues by a
low single digit % in 2022 (at constant currency), with growth
weighted towards H2. At this level, the Group anticipates a similar
adjusted EBITDA margin % to 2021 (at constant currency). Capital
expenditure of £10-15m is expected on PP&E and £6-8m on
capitalised intangibles relating to development costs and IT
transformation.
Group Trading Performance
Group revenue
for FY 2021 was down 13% to £154.1m (FY 2020: £178.0m). The Group
experienced a FX headwind of c.£10.6m affecting GBP revenue on a
reported basis, with the majority of revenues being earned in USD.
On a constant currency basis, Group revenue was down 7% at £165m,
in line with the November 2021 trading update of £164m.
Wireless revenue of £83.2m (FY
2020: £94.2m) was down 12% year-on-year on a reported basis and
down 6% on a constant currency basis. Strong growth in demand for
wafers used in 5G handsets and WiFi 6 routers, resulted in an
increase of 19% year-on-year for Wireless GaAs. This growth was
offset by a reduction in demand for GaN wafers used in 5G
infrastructure, with revenue down by 49% year-on-year. After a
strong performance for GaN in 2020 resulting from the initial wave
of 5G mMIMO base station deployments, particularly in Asia, delays
to further global deployments were experienced in 2021. A
multi-year replacement cycle is still anticipated for 5G
infrastructure, including strong anticipated GaN content.
Photonics revenue of £68.1m (FY
2020: £81.6m) was down 17% year-on-year on a reported basis and
down 11% on a constant currency basis. VCSEL revenue for 3D sensing
applications was down by 19% as a result of smaller chip sizes. The
Group maintained strong market share in its key supply chain and
remains well positioned for future product evolutions. Delays were
experienced in certain aerospace and security orders, with Infrared
revenues down 8% year-on-year. This represents a change in phasing,
with no anticipated loss of market share. InP and other revenues
were up by 16%, predominantly due to strength in datacom and
telecom markets as well as new growth areas of sensing.
CMOS++ revenue of £2.8m (FY
2020: £2.2m) was up by 28% year-on-year, adding scale to the
Group’s Si epitaxy operation which is important to the integration
of compound semiconductors on silicon.
Group Adjusted EBITDA of £18.7m
(FY 2020: £30.1m) on a reported basis is equivalent to £25.0m on a
constant currency basis. The constant currency EBITDA margin of 15%
was in line with the November 2021 trading update of c.15% margin.
The year-on-year fall in margin is predominantly related to the
Group’s operational gearing. The Group plans to improve its
profitability going forward through a global site optimisation
programme and growing margins by achieving higher volumes and hence
economies of scale at its strategic site locations.
A Reported Operating Loss of
£20.0m (FY 2020: (£5.5m)) is derived as a result of the trading
performance and a number of one-off exceptional items (see below),
with an adjusted operating loss of £6.5m (FY 2020: £5.4m
profit).
Net cashflow from operations of
£18.9m (FY 2020: £35.5m) representing 96% conversion of Adjusted
EBITDA, resulting in a net debt position (excluding lease
liabilities) of £5.8m as at 31 December 2021 (FY 2020: net cash of
£1.9m). The Group renewed a $35m revolving credit facility with
HSBC in December 2021 and had a cash position as at 31 December
2021 of £10.8m.
Capital expenditure of £15.1m
on PP&E (FY 2020: £5.0m) in line with the November trading
update of £14-17m, focussed on the deployment of additional tools
to meet growing demand for 5G handset and WiFi 6 products in
Taiwan. The Group continues to invest in research and development
with technology capitalisation of £3.3m of intangible assets (FY
2020: £5.4m).
Adjustments to Reported
Items
In order to focus the business, longer term
developments such as cREO® and Photonic Quasi Crystal are being
de-prioritised in the short term to focus our development
programmes on market driven solutions. IQE will retain the
technology, capability and IP enabling redeployment if and when
appropriate.
- An
exceptional intangible asset impairment charge of £7.4m has been
recognised within the Reported Operating Loss. This comprises a
non-cash impairment charge of £4.7m related to cREO® development
costs and patents, following a decision to pause development
activities on this technology until a commercial opportunity
arises, in line with the markets based approach set out in our
strategic priorities.
- A
non-cash impairment charge of £2.7m has also been recognised for
Quasi Photonic Crystal (QPC) and Diffusers, following a similar
decision to suspend development activities.
Exceptional restructuring costs of £3.7m have
been recognised in respect of site closures that are part of the
Group’s global site optimisation programme.
-
Restructuring costs of £0.7m (2020: £0.2m) relate to the previously
announced closure of the Group’s manufacturing facility in
Pennsylvania, USA. The Group’s MBE activities in Pennsylvania will
be consolidated into the North Carolina site by 2024.
-
Restructuring costs of £3.0m (2020: £nil) relate to the previously
announced closure of the Group’s manufacturing facility in
Singapore. The Singapore site will be closed by mid-2022 and will
result in £4.8m of annualised cash cost savings.
The Group has also recognised a non-cash Share
Based Payments charge of £1.7m (FY 2020: £0.3m) and CEO transition
costs of £0.7m (FY 2020: £nil). Excluding these exceptional charges
totalling £13.5m, the Group has recorded an Adjusted
Operating Loss in FY 2021 of £6.5m (FY 2020: £5.4m
profit).
Results Presentation
IQE will present the FY 2021 Results via webcast
at 9:00am UK time today, 29 March 2022. If you would like to view
this webcast, please register by using the below link and following
the instructions:
https://webcasting.brrmedia.co.uk/broadcast/62335d781c349d634ccb28b7
Contacts:
IQE plc+44 (0) 29 2083 9400Americo LemosTim
PullenAmy
Barlow Peel
Hunt LLP (Nomad and Joint Broker)+44 (0) 20 7418
8900Edward KnightPaul GillamJames
Smith Citigroup
Global Markets Limited (Joint Broker)+44 (0) 20 7986
4000Christopher WrenPeter
Catterall
Headland Consultancy (Financial PR) + 44
(0) 20 38054822Andy Rivett-Carnac: +44 (0) 7968 997 365Marta
Parry-Jones: +44 (0) 7884742400
Financial Review
The Group reports financial performance in
conformity with UK adopted international accounting standards (“UK
adopted IFRS”) and provides disclosure of additional alternative
non IFRS GAAP performance measures to provide further understanding
of financial performance. Details of the alternative performance
measures used by the Group including a reconciliation to reported
IFRS GAAP performance measures are set out in note 4.
The Group has experienced strong year on year
growth in demand for wireless GaAs wafers (~20%) used in 5G handset
power amplifiers and Wifi 6 routers in 2021. This is part of a
multi-year replacement cycle driven by a macro technological trend.
This has been offset by a reduction in demand for wireless GaN
wafers (~50%) for 5G infrastructure due to a slowdown in massive
MIMO deployments, particularly in Asia, when compared to 2020 and a
reduction in VCSEL 3D sensing revenues (~20%). In combination with
foreign exchange headwinds on a reported basis, this has resulted
in a reduction in revenue of ~13.4% to £154,096,000 (2020:
£178,016,000) which is equivalent to ~£165,000,000 at constant
currency, which represents a ~7.3% underlying year-on-year
reduction.
The Group’s Wireless business segment represents
the largest proportion of the Group’s revenue accounting for 54.0%
(2020: 52.9%) of total wafer sales with Photonics representing
44.2% (2020: 45.9%) and CMOSS++ representing 1.8% (2020: 1.2%).
Wireless wafer revenues decreased 11.6% (5.5% at
constant currency) to £83,217,000 (2020: £94,193,000). The decrease
in wireless wafer revenues reflects a significant decline in
wireless GaN epi-wafer sales that has only partially been offset by
increased sales of wireless GaAs epi-wafers for 5G and WiFi 6.
Demand for wireless GaN epi-wafers has been weak due to end-market
dynamics, including significantly lower levels of massive MIMO base
station deployments in Asia and the slow rate of
deployments in Western markets. GaN epi-wafers remain an essential
material for 5G infrastructure and demand is expected to recover
over the multi-year deployment cycle. Demand for wireless GaAs
epi-wafers has continued to grow in 2021 despite some softening of
demand in Q4, driven by 5G penetration of the smartphone handset
market and WiFi 6, a dynamic which has resulted in high utilisation
of manufacturing capacity at the Group’s Taiwan facility,
where the Group has invested in eight new and refurbished tools
which are currently being commissioned to support further growth in
wireless GaAs epi-wafer demand in 2022 and beyond.
Photonics wafer revenues decreased 16.6% (10.4%
at constant currency) to £68,067,000 (2020: £81,627,000). The
decrease in photonics wafer revenues reflects lower demand for
VCSEL’s used in 3D sensing which has primarily arisen from a
combination of chip design changes and softening in smartphone
supply chains towards the end of 2021 and as a result of lower
other photonic product sales linked to a combination of factors
including the re-phasing of certain defence and security orders
associated with large programmes into 2022 and the slower
introduction of sales of certain new products.
Statutory gross profit decreased from
£33,150,000 to £17,644,000. The decrease in gross profit reflects a
combination of lower trading volumes and a reduction in overall
gross profit margin percentage to 11.5% (2020: 18.6%) as the Group
has experienced a reduction in utilisation of manufacturing
capacity at some of its sites, in the current year. Adjusted gross
profit, which excludes the charge for share based payments,
decreased from £33,327,000 to £18,771,000 with a decline in gross
margin from 18.7% to 12.2%.
Selling, general and administrative (‘SG&A’)
expenses increased from £34,697,000 to £37,699,000. Adjusted
SG&A, which excludes adjustments for share based payments,
restructuring costs, Chief Executive Officer recruitment costs and
certain non-current asset impairments decreased from £27,759,000 to
£25,302,000. Decreases in adjusted SG&A primarily reflect
certain employee related cost savings and reductions in certain
other areas of corporate expenditure that have been required
commensurate with the decline in current year revenue.
As part of the Group’s global footprint
optimisation plan restructuring costs totalling £3,681,000 (2020:
£162,000) have been incurred relating to costs associated with the
announced closures of the Group’s manufacturing facilities in
Singapore and Pennsylvania, USA. Within the restructuring costs are
£3,020,000 (2020: £nil) relating to a combination of site
decommissioning and employee related costs in Singapore and
£661,000 (2020: £162,000) relating to employee related costs in
Pennsylvania, USA. These site closures are part of the Group’s
global footprint optimisation plan.
Chief Executive Officer recruitment costs of
£741,000 (2020: £nil) include settlement costs and legal fees of
£318,000 associated with the transition of the former Chief
Executive Officer to a non-executive role and external recruitment
fees of £423,000.
Impairment of intangibles of £7,411,000 (2020:
£6,537,000) relates to the write-down in value of the Group’s cREO™
filter technology development cost and patent assets totalling
£4,693,000 (2020: £nil) and the impairment of Photonic quasi
crystal technology related development costs and patent assets
totalling £2,718,000 (2020: £nil) where the Group has taken the
decision to pause development related activities given the current
lack of visibility over the timeline to commercialisation of each
of the technologies.
A reported operating loss of £19,978,000 has
been incurred (2020: Loss of £5,517,000). Reflecting the
adjustments noted above, an adjusted operating loss of £6,454,000
in 2021 compares to an adjusted operating profit of £5,386,000 in
2020 with the loss in 2021 principally reflecting the impact of the
decline in year-on-year revenue. The segmental analysis in note 4
reflects the adjusted operating margins for the primary segments
(before central corporate support costs). Wireless adjusted
operating margins and photonics operating margins declined from
12.1% and 11.1% in 2020 to 8.8% and 2.6% in 2021, primarily
reflecting reductions in volume and the associated under-
utilisation of certain manufacturing capacity.
Finance costs have remained broadly consistent
year-on-year at £2,213,000 (2020: £2,165,000) and reflect £905,000
(2020: £949,000) of bank and other interest costs primarily related
to the Group’s HSBC Bank plc asset finance facility and the
interest expense on lease liabilities of £1,308,000 (2020:
£1,216,000).
The tax charge of £8,811,000 (2020: £1,001,000
credit) consists of a current tax charge of £1,124,000 (2020:
£1,132,000) primarily relating to taxable profits generated by the
Group’s Taiwanese operations and a deferred tax charge of
£7,687,000 (2020: £2,133,000 credit) which principally reflects the
partial reversal and de-recognition of previously recognised UK and
US tax losses. Deferred tax asset recognition has been restricted
in the UK to reflect future forecast profitability, an assessment
that includes the impact of the Group’s consolidation and
investment in central and functional roles in the UK whilst US
deferred tax asset recognition has been restricted in the US to
reflect lower future forecast profitability arising from a
combination of the Group’s consolidation of its US manufacturing
operations and the continued shift in the balance of future
forecast manufacturing and hence profits from the Group’s US
operations to its UK and Asian operation. The effective tax rate of
13.3% (2020: 21.4%) applicable to the tax charge of £1,803,000
(2020: £1,520,000) on adjusted items is less than the UK statutory
tax rate of 19% primarily due to the non-recognition of deferred
tax assets for current year UK, US and Singapore trading losses
which include the adjusted Chief Executive Officer recruitment and
Singapore and Pennsylvania site closure costs.
The increase in the loss for the year to
£31,002,000 (2020: £2,893,000) reflects a combination of the
decline in revenue in the wireless and photonics business segments,
reduced profitability within both segments as the Group has
experienced an increase in under-utilisation of manufacturing
capacity and the impact of adjusted non-cash and other
non-operational items which at an adjusted level, has reduced the
loss to £19,281,000 (2020: £2,702,000 profit).
Basic and diluted loss per share has increased
from a loss per share of 0.41p to a loss per share of 3.87p in the
current year with adjusted basic loss per share of 2.41p (2020:
0.29p earnings) and adjusted diluted loss per share of 2.41p (2020:
0.29p earnings) reflecting the Group’s loss at a statutory and
adjusted profit level.
Cash generated from operations decreased in the
year to £18,883,000 (2020: £35,457,000) reflecting the Group’s
reduced trading performance partially offset by strong management
of working capital. The Group has continued to invest in growing
capacity to meet demand with capital expenditure of £15,051,000
(2020: £4,993,000) principally focused in Taiwan to support future
forecast growth in wireless GaAs epi-wafer demand, intangible asset
expenditure of £345,000 (2020: £731,000) focused on a combination
of intellectual property and the Group’s multi-year strategic IT
transformation programme and investment in targeted capitalised
technology development of £2,994,000 (2020: £4,678,000).
The decrease in cash generated from operations,
combined with investing activity cash costs of £18,305.000 (2020:
£10,402,000), repayment of bank borrowings of £6,145,000 (2020:
£7,030,000), repayment of lease liabilities (including interest) of
£5,013,000 (2020: £3,764,000) and payment of the final cash costs
of £1,792,000 (2020: £1,363,000) associated with the prior period
acquisition of the minority interest in the Group’s Taiwanese
subsidiary, IQE Taiwan ROC have combined to reduce the Group’s cash
balances from £24,663,000 in 2020 to £10,791,000 in 2021 resulting
in a full year net debt position of £5,804,000 (excluding lease
liabilities) compared to a net funds position of £1,923,000
(excluding lease liabilities) in 2020.
Equity shareholder funds total £234,621,000
(2020: £260,435,000) with the movement from 2020 primarily
reflecting the loss for the year, the impact of finalisation of the
prior year acquisition of the Taiwanese minority interest and
foreign exchange differences arising on the retranslation of net
investments in overseas subsidiaries.
Financial
Statements
Financial summary
|
2021£’000 |
2020£’000 |
Revenue |
154,096 |
178,016 |
Adjusted EBITDA (see below) |
18,679 |
30,101 |
Operating (loss)/profit |
|
|
• Adjusted* |
(6,454) |
5,386 |
• Reported |
(19,978) |
(5,517) |
(Loss)/profit after tax |
|
|
• Adjusted* |
(19,281) |
2,702 |
• Reported |
(31,002) |
(2,893) |
Net cash flow from operations |
|
|
Before
adjustments (note 5) |
17,940 |
36,324 |
Reported |
18,883 |
35,457 |
Free cash flow** |
|
|
Before
exceptional cash flows |
(1,640) |
24,929 |
Reported |
(697) |
24,062 |
|
|
|
Net (debt)/cash excluding lease
liabilities*** |
(5,804) |
1,923 |
|
|
|
Equity shareholders’ funds |
234,621 |
260,435 |
Basic EPS – adjusted**** |
(2.41p) |
0.29p |
Basic EPS – unadjusted |
(3.87p) |
(0.41p) |
|
|
|
Diluted EPS – adjusted**** |
(2.41p) |
0.29p |
Diluted EPS – unadjusted |
(3.87p) |
(0.41p) |
* The adjusted
performance measures for 2021 and 2020 are reconciled in note 4.
The adjusted performance measures for 2017-2019 are reconciled in
those financial statements.
** Free cash flow
is defined as net cash flow outflow of £14,080,000 (2020:
£16,003,000 inflow) before cash flows from financing activities of
£11,170,000 (2020: £5,701,000) and net interest paid of £2,213,000
(2020: £2,358,000).
*** Net
(debt)/cash is defined as cash less borrowings but excluding lease
liabilities.
**** 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 2021
|
2021£’000 |
2020£’000 |
Revenue |
154,096 |
178,016 |
Cost of sales |
(136,452) |
(144,866) |
Gross profit |
17,644 |
33,150 |
Selling,
general and administrative expenses |
(37,699) |
(34,697) |
Impairment loss on financial assets |
- |
(3,788) |
Profit on disposal of property, plant and equipment |
77 |
(182) |
Operating loss |
(19,978) |
(5,517) |
Finance
costs |
(2,213) |
(2,165) |
Reversal/share of losses of joint ventures accounted for using the
equity method |
- |
3,788 |
Adjusted (loss)/profit before income
tax |
(8,667) |
3,221 |
Adjustments |
(13,524) |
(7,115) |
Loss before income tax |
(22,191) |
(3,894) |
Taxation |
(8,811) |
1,001 |
Loss for the year |
(31,002) |
(2,893) |
|
|
|
Loss attributable to: |
|
|
Equity
shareholders |
(31,002) |
(3,271) |
Non-controlling interest |
- |
378 |
|
(31,002) |
(2,893) |
|
|
|
Loss per share attributable to owners of the parent during
the year |
|
|
Basic
loss per share |
(3.87p) |
(0.41p) |
Diluted loss earnings per share |
(3.87p) |
(0.41p) |
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.
Non-controlling interest relates to minority shareholder
interests in the Group’s subsidiary, IQE Taiwan ROC, prior to the
acquisition of the minority shareholding on 5 October 2020.
The company has elected to take the exemption under section 408
of the Companies Act 2006 from presenting the parent company profit
and loss account.
Consolidated statement of comprehensive income for the
year ended 31 December 2021
|
2021£’000 |
2020£’000 |
Loss for the year |
(31,002) |
(2,893) |
Exchange differences on translation of foreign operations* |
4,744 |
(6,104) |
Total comprehensive expense for the year |
(26,258) |
(8,997) |
|
|
|
Total comprehensive expense attributable to: |
|
|
Equity
shareholders |
(26,258) |
(9,482) |
Non-controlling interest |
- |
485 |
|
(26,258) |
(8,997) |
* Items that may
be subsequently be reclassified to profit or loss.
Items in the statement above are disclosed net of tax.
Consolidated balance sheet as at 31 December
2021
|
2021£’000 |
2020£’000 |
Non-current assets |
|
|
Intangible assets |
95,866 |
105,772 |
Fixed
asset investments |
- |
– |
Property, plant and equipment |
129,730 |
126,229 |
Right of
use assets |
44,267 |
37,339 |
Deferred
tax assets |
- |
7,821 |
Other financial assets |
- |
– |
Total non-current assets |
269,863 |
277,161 |
Current assets |
|
|
Inventories |
31,710 |
30,887 |
Trade
and other receivables |
38,860 |
38,575 |
Cash and cash equivalents |
10,791 |
24,663 |
Total current assets |
81,361 |
94,125 |
Total assets |
351,224 |
371,286 |
Current liabilities |
|
|
Trade
and other payables |
(37,083) |
(35,605) |
Current
tax liabilities |
(1,342) |
(1,426) |
Bank
borrowings |
(6,230) |
(6,201) |
Lease
liabilities |
(4,694) |
(4,798) |
Provisions for other liabilities and charges |
(3,686) |
(515) |
Total current liabilities |
(53,035) |
(48,545) |
Non-current liabilities |
|
|
Bank
borrowings |
(10,365) |
(16,539) |
Lease
liabilities |
(49,693) |
(42,226) |
Deferred
tax liabilities |
(2,060) |
(2,054) |
Provisions for other liabilities and charges |
(1,450) |
(1,487) |
Total non-current liabilities |
(63,568) |
(62,306) |
Total liabilities |
(116,603) |
(110,851) |
Net assets |
234,621 |
260,435 |
|
|
|
Equity attributable to the shareholders of the
parent |
|
|
Share
capital |
8,036 |
8,004 |
Share
premium |
154,632 |
154,185 |
Retained
earnings |
29,295 |
62,089 |
Exchange
rate reserve |
26,035 |
21,291 |
Other reserves |
16,623 |
14,866 |
|
234,621 |
260,435 |
Non-controlling interest |
- |
– |
Total equity |
234,621 |
260,435 |
Consolidated statement of changes in equity for the year
ended 31 December 2021
|
Share capital£’000 |
Share premium£’000 |
Retained earnings£’000 |
Exchange Rate
reserve£’000 |
Other reserves£’000 |
Non-controlling
interests£’000 |
Total equity£’000 |
|
|
|
|
|
|
|
|
At 1 January 2021 |
8,004 |
154,185 |
62,089 |
21,291 |
14,866 |
- |
260,435 |
|
|
|
|
|
|
|
|
Comprehensive expense |
|
|
|
|
|
|
|
Loss for
the year |
- |
- |
(31,002) |
- |
- |
- |
(31,002) |
Other comprehensive income for the year |
- |
- |
- |
4,744 |
- |
- |
4,744 |
Total comprehensive expense for the year |
- |
- |
(31,002) |
4,744 |
- |
- |
(26,258) |
|
|
|
|
|
|
|
|
Transactions with owners |
|
|
|
|
|
|
|
Share
based payments |
- |
- |
- |
- |
1,850 |
- |
1,850 |
Tax
relating to share options |
- |
- |
- |
- |
(93) |
- |
(93) |
Proceeds
from shares issued |
32 |
447 |
- |
- |
- |
- |
479 |
Acquisition of non-controlling interest |
- |
- |
(1,792) |
- |
- |
- |
(1,792) |
Total transactions with owners |
32 |
447 |
(1,792) |
- |
1,757 |
- |
444 |
|
|
|
|
|
|
|
|
At 31 December 2021 |
8,036 |
154,632 |
29,295 |
26,035 |
16,623 |
- |
234,621 |
|
Share capital£’000 |
Share premium£’000 |
Retained earnings£’000 |
Exchange Rate
reserve£’000 |
Other reserves£’000 |
Non-controlling
interests£’000 |
Total equity£’000 |
|
|
|
|
|
|
|
|
At 1 January 2020 |
7,961 |
152,385 |
63,826 |
27,502 |
14,919 |
3,850 |
270,443 |
|
|
|
|
|
|
|
|
Comprehensive expense |
|
|
|
|
|
|
|
(Loss)/profit for the year |
– |
– |
(3,271) |
– |
– |
378 |
(2,893) |
Other comprehensive expense for the year |
– |
– |
– |
(6,211) |
– |
107 |
(6,104) |
Total comprehensive expense for the year |
– |
– |
(3,271) |
(6,211) |
– |
485 |
(8,997) |
|
|
|
|
|
|
|
|
Transactions with owners |
|
|
|
|
|
|
|
Share
based payments |
– |
– |
– |
– |
55 |
– |
55 |
Tax
relating to share options |
– |
– |
– |
– |
57 |
– |
57 |
Proceeds
from shares issued |
17 |
388 |
– |
– |
(165) |
– |
240 |
Acquisition of non-controlling interest |
26 |
1,412 |
1,534 |
– |
– |
(4,335) |
(1,363) |
Total transactions with owners |
43 |
1,800 |
1,534 |
– |
(53) |
(4,335) |
(1,011) |
|
|
|
|
|
|
|
|
At 31 December 2020 |
8,004 |
154,185 |
62,089 |
21,291 |
14,866 |
– |
260,435 |
Other reserves relate to share based payments.
Consolidated cash flow statement for the year ended 31
December 2021
|
2021£’000 |
Restated2020£’000 |
Cash flows from operating activities |
|
|
Adjusted cash inflow from
operations |
17,940 |
36,324 |
Cash impact of adjustments |
943 |
(867) |
Cash generated from operations |
18,883 |
35,457 |
Net interest paid |
(2,213) |
(2,358) |
Income tax paid |
(1,275) |
(993) |
Net cash generated from operating activities |
15,395 |
32,106 |
Cash flows from investing activities |
|
|
Purchase
of property, plant and equipment |
(15,051) |
(4,993) |
Purchase
of intangible assets |
(345) |
(731) |
Capitalised development expenditure |
(2,994) |
(4,678) |
Proceeds
from disposal of property, plant and equipment |
85 |
– |
Net cash used in investing activities |
(18,305) |
(10,402) |
Cash flows from financing activities |
|
|
Acquisition of minority interest |
(1,792) |
(1,363) |
Proceeds
from issuance of ordinary shares |
472 |
240 |
Proceeds
from borrowings |
- |
5,000 |
Repayment of borrowings |
(6,145) |
(7,030) |
Payment of lease liabilities |
(3,705) |
(2,548) |
Net cash used in financing activities |
(11,170) |
(5,701) |
Net (decrease)/increase in cash and cash
equivalents |
(14,080) |
16,003 |
Cash and
cash equivalents at 1 January |
24,663 |
8,800 |
Exchange losses on cash and cash equivalents |
208 |
(140) |
Cash and cash equivalents at 31 December |
10,791 |
24,663 |
The comparative financial information for 2020 has been restated
to reclassify cash flows associated with Acquisition of minority
interest from investing activities to financing activities and to
reclassify interest lease cash flows from financing activities to
net interest paid in cash generated from operating activities. The
reclassifications have had no impact on net assets, loss after tax
or total cash flow for 2020.
Notes to the financial statements for the year ended 31
December 2021
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. Significant 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 international accounting standards in
conformity 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. The areas involving a
higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the consolidated
financial statements are disclosed in note 3.
2.2 Going concern
The Group made a loss of £31,002,000 (2020: £2,893,000 loss) and
used £13,872,000 of cash and cash equivalents (2020: £15,863,000
generated) resulting in a net debt position (excluding lease
liabilities) of £5,804,000 (2020: £1,923,000 net cash) as at 31
December 2021.
The following matters have been considered by
the directors in determining the appropriateness of the going
concern basis of preparation in the financial statements:
- The Group’s operations are
geographically diversified. Manufacturing operations are located at
ten different sites across three continents, significantly
lessening the impact of potential disruption at any single site as
a result of the ongoing Coronavirus pandemic. All manufacturing
sites continue to remain operational and production has not been
affected by any disruption at any of the Group’s global sites.
- The Group dual or multi-sources
key raw materials (substrates, gases, spares and consumables)
wherever possible, from a broad range of global suppliers, reducing
the likelihood of potential disruption to production from any
single supplier. The Group continues to work closely with suppliers
and customers to manage inventory levels in order to create supply
chain resilience against potential disruption. All manufacturing
sites continue to remain operational and production has not been
affected by any supply chain disruption.
- The Group’s trading has remained
resilient throughout the year ended 31 December 2021 although
emerging softness in smartphone related demand, weakness in 5G
infrastructure demand and on-going foreign exchange headwinds have
resulted in a decline in revenue for the year to £154,096,000
(2020: £178,016,000) and an adjusted loss before tax of £8,667,000
(2020: £3,221,000 profit).
- The Group’s net debt (excluding
lease liabilities) position of £5,804,000 (2020: £1,923,000 funds)
remains low in the context of total available facilities of
£55,900,000 (2020: £55,550,000) with the increase in the net debt
position principally reflecting the Group’s investment activities
where investment in technology development and capacity expansion
in the second half of 2021 has exceeded cash generated from
operations. Net debt (excluding lease liabilities) consists of
£10,791,000 (2020: £24,633,000) of cash net of bank loans of
£16,595,000 (2020: £22,740,000) which are repayable over a period
to 29 August 2024.
- On 24 January 2019, the Group
agreed a new £25,900,000 ($35,000,000) three-year multi-currency
revolving credit facility from HSBC Bank plc. On 30 December 2021
the multi-currency revolving credit facility was extended for an
additional 15-month period to 30 April 2023 and includes an option
that requires HSBC Bank plc consent to extend the facility for a
further 12-month period to 30 April 2024. The Group has complied
with all covenants associated with the facility.
- On 29 August 2019, the Group
agreed a new £30,000,000 five-year Asset Finance Loan facility from
HSBC Bank plc of which £25,000,000 has been drawn. The Group has
complied with all covenants associated with the facility.
- The Group generated cash from
operating activities of £15,395,000 (2020: £32,106,000) and its
financial forecasts and projections for the period up to and
including 31 December 2023 show that the Group is forecast to
continue to comply with its banking covenants and has adequate cash
resources to continue operating for the foreseeable future.
- The Group’s severe but plausible
downside financial forecasts have been prepared with significant
reductions to future forecast revenues, designed to reflect severe
downside scenarios associated with demand risks for the period to
31 December 2023. The severe but plausible downside scenario,
applied to the Group’s financial forecasts, which take account of
current trading and customer demand, assumes a ~17% reduction in
2022 revenue and a ~31% reduction in 2023 revenue partially offset
by mitigations within the control of the company, including
deferred investment in employee related costs and certain capital
projects across the forecast period. The severe but plausible
downside scenario illustrates that the Group is forecast to
continue to comply with its banking covenants but would require
either the exercise of the extension option contained in the
revolving credit facility from HSBC Bank plc, or refinancing of the
revolving credit facility at the extension option date in April
2023. The severe but plausible downside scenario illustrates that a
facility of ~£16,500,000, significantly below the Group’s current
committed revolving credit facility of £25,900,000 could be
required in 2023. The Group has a long-standing and trusted
relationship with its bankers, HSBC Bank plc, who remain supportive
and who have, at the date of this report, formally extended the
Group’s £25,900,000 ($35,000,000) revolving credit facility until
April 2023 with an option, that requires HSBC Bank plc consent, to
extend the facility for a further 12-month period. On this basis,
the directors believe that the group has, or will have access, to
adequate cash resources to continue operating for the foreseeable
future even in a severe but plausible downside scenario.
The Group meets its day-to-day working capital and other cash
requirements through its bank facilities and available cash. The
Group’s cash flow forecasts and projections, in conjunction with
the level of assessed covenant headroom on the Group’s committed
bank facilities show that the Group and the Company have adequate
cash resources to continue operating and to meet its liabilities as
they fall due for a period of at least 12 months from the date of
approval of the financial statements, such that the directors
consider it appropriate to adopt the going concern basis of
accounting in preparing the consolidated 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 2021:
- Amendments to IFRS 9 ‘Financial
Instruments’, IAS 39 ‘Financial Instruments: Recognition and
Measurement’, IFRS 7 ‘Financial Instruments: Disclosures, IFRS 4
‘Insurance Contracts’, IFRS 16 ‘Leases’ related to interest rate
benchmark reform (phase two) and the issues that arise from the
implementation of the reforms, including the replacement of one
benchmark with an alternative one.
- Amendment to IFRS 16 ‘Leases’
which provides an optional practical expedient for lessees from
assessing whether a rent concession related to COVID-19 is a lease
modification.
- Amendments to IFRS 16 ‘Leases’
which provides an extension to an optional practical expedient for
lessees from assessing whether a rent concession related to
COVID-19 is a lease modification beyond 30 June 2021.
The adoption of these standards, amendments and interpretations
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
A number of new standards, amendments to standards and
interpretations which are set out below are effective for annual
periods beginning after 1 January 2021 and have not been applied in
preparing these consolidated financial statements.
- Amendment to IFRS 3 ‘Business
combinations’ to update references to the Conceptual Framework for
Financial Reporting without changing the accounting requirements
for business combinations.
- Amendments to IAS 16 ‘Property,
plant and equipment’ to prohibit the deduction from cost of
property, plant and equipment amounts received from selling items
produced while preparing the asset for its intended use with any
such sales and related cost recognised in profit or loss.
- Amendments to IAS 37 ‘Provisions,
contingent liabilities and contingent assets’ to specify which
costs a company includes when assessing whether a contract will be
loss making.
- Annual improvements to IFRSs
2018-2020 cycle to make minor amendments to IFRS 1 ‘First-time
adoption of IFRS’, IFRS 9 ‘Financial Instruments’, IAS 41
‘Agriculture’ and amendments to the illustrative examples
accompanying IFRS 16 ‘Leases’.
- IFRS 17 ‘Insurance contracts’
which establishes the principles for the recognition, measurement,
presentation and disclosure of insurance contracts and supersedes
IFRS 4 ‘Insurance Contracts’
- Amendments to IAS 1 ‘Presentation
of financial statements’ on classification of liabilities which is
intended to clarify that liabilities are classified as either
current or non-current depending upon the rights that exist at the
end of the reporting period and amendments to the disclosure of
accounting policies which will require disclosure of material
rather than significant accounting policies.
- Amendment to IAS 8 ‘Accounting
policies, changes in accounting estimates and errors’ to introduce
a new definition for accounting estimates which clarifies that an
accounting estimate is a monetary amount in the financial
statements that is subject to measurement uncertainty.
- Amendment to IAS 12 ‘Income
taxes’ to clarify the accounting treatment for deferred tax on
certain transactions with a narrowing of the scope of the initial
recognition exemption so that it does not apply to transactions
that give rise to equal and offsetting temporary differences.
The Directors anticipate that at the time of this report none of
the new standards, amendments to standards and interpretations are
expected to have a material effect on the financial statements of
the Group or parent company.
3. Segmental analysis
3.1 Description of segments and principal
activities
The Chief Operating Decision Maker is defined as the Executive
Management Board. The Executive Management Board, consisting of the
Chief Executive Officer, Chief Financial Officer, Chief Operations
Officer, Chief Technology Officer, Executive VP Global Business
Development, Wireless and Emerging Products, Executive VP Global
Business Development, Photonics & Infrared and the Global Human
Resources Director 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.
- CMOSS++ – this part of the
business manufactures and sells advanced semiconductor materials
related to silicon which include the combination of the advanced
properties of compound semiconductors with those of lower cost of
silicon technologies.
The Executive Management Board primarily use revenue and a
measure of adjusted operating profit to assess the performance of
the operating segments. Measures of total assets and liabilities
for each reportable segment are not reported to the Executive
Management Board and therefore have not been disclosed.
Revenue |
2021£’000 |
2020£’000 |
Wireless |
83,217 |
94,193 |
Photonics |
68,067 |
81,627 |
CMOS++ |
2,812 |
2,196 |
Revenue |
154,096 |
178,016 |
|
|
|
Adjusted operating (loss) / profit |
|
|
Wireless |
7,305 |
11,393 |
Photonics |
1,737 |
9,080 |
CMOS++ |
(586) |
(714) |
Central corporate costs |
(14,910) |
(14,373) |
Adjusted operating (loss) / profit |
(6,454) |
5,386 |
|
|
|
Adjusted items (see note 4) |
(13,524) |
(10,903) |
Operating loss |
(19,978) |
(5,517) |
|
|
|
Reversal/share of losses of joint venture accounted for using the
equity method |
- |
3,788 |
Finance costs |
(2,213) |
(2,165) |
Loss before tax |
(22,191) |
(3,894) |
4. Adjusted profit measures
The Group’s results report certain financial measures after a
number of adjusted items that are not defined or recognised under
IFRS including adjusted operating profit, adjusted profit before
income tax and adjusted earnings per share. The Directors believe
that the adjusted profit measures provide a useful comparison of
business trends and performance and allow 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 Group
uses these adjusted profit measures for internal planning,
budgeting, reporting and assessment of the performance of the
business.
The tables below show the adjustments made to arrive at the
adjusted profit measures and the impact on the Group’s reported
financial performance.
|
AdjustedResults£’000 |
AdjustedItems£’000 |
2021ReportedResults£’000 |
AdjustedResults£’000 |
AdjustedItems£’000 |
2020ReportedResults£’000 |
Revenue |
154,096 |
- |
154,096 |
178,016 |
– |
178,016 |
Cost of sales |
(135,325) |
(1,127) |
(136,452) |
(144,689) |
(177) |
(144,866) |
Gross profit |
18,771 |
(1,127) |
17,644 |
33,327 |
(177) |
33,150 |
SG&A |
(25,302) |
(12,397) |
(37,699) |
(27,759) |
(6,938) |
(34,697) |
Impairment loss on financial assets |
- |
- |
- |
– |
(3,788) |
(3,788) |
Profit on disposal of PPE |
77 |
- |
77 |
(182) |
– |
(182) |
Operating (loss)/profit |
(6,454) |
(13,524) |
(19,978) |
5,386 |
(10,903) |
(5,517) |
Reversal
of JV losses |
- |
- |
- |
– |
3,788 |
3,788 |
Finance costs |
(2,213) |
- |
(2,213) |
(2,165) |
– |
(2,165) |
(Loss)/profit before tax |
(8,667) |
(13,524) |
(22,191) |
3,221 |
(7,115) |
(3,894) |
Taxation |
(10,614) |
1,803 |
(8,811) |
(519) |
1,520 |
1,001 |
(Loss)/profit for the period |
(19,281) |
(11,721) |
(31,002) |
2,702 |
(5,595) |
(2,893) |
|
Pre-taxAdjustment£’000 |
TaxImpact£’000 |
2021AdjustedResults£’000 |
Pre-taxAdjustment£’000 |
TaxImpact£’000 |
2020AdjustedResults£’000 |
Share based payments |
(1,691) |
(13) |
(1,704) |
(265) |
210 |
(55) |
Chief
Executive Officer Recruitment |
(741) |
- |
(741) |
- |
- |
- |
Restructuring |
(3,681) |
- |
(3,681) |
(162) |
39 |
(123) |
Impairment – intangibles |
(7,411) |
1,816 |
(5,595) |
(6,537) |
1,242 |
(5,295) |
Onerous
contract |
- |
- |
- |
(1,840) |
350 |
(1,490) |
Patent
dispute legal fees |
- |
- |
- |
1,689 |
(321) |
1,368 |
Impairment – financial assets |
- |
- |
- |
(3,788) |
– |
(3,788) |
Share of
JV losses – financial asset |
- |
- |
- |
3,788 |
– |
3,788 |
Total |
(13,524) |
1,803 |
(11,721) |
(7,115) |
1,520 |
(5,595) |
The nature of the adjusted items is as follows:
- Share based payments – The charge
(2020: charge) relates to share based payments recorded in
accordance with IFRS 2 ‘Share based payment’ of which £1,127,000
(2020: £177,000) has been classified within cost of sales in gross
profit and £564,000 (2020: £88,000) has been classified as selling,
general and administrative expenses in operating profit. £46,000
cash has been defrayed in the year (2020: £nil) in respect of
employer social security contributions following the exercise of
unapproved employee share options.
- Chief Executive Officer
recruitment – The charge of £741,000 include settlement costs and
legal fees of £319,000 associated with the transition of the former
Chief Executive Officer to a non-executive role and external
recruitment fees of £422,000. Cash costs defrayed in the year total
£152,000 (2020: £nil)
- Restructuring – The charge of
£3,681,000 relates to restructuring costs relating to the announced
closure of the Group’s manufacturing facility in Pennsylvania, USA
and the Group’s manufacturing facility in Singapore.
- Restructuring charges of £661,000
(2020: £162,000) relate to employee related costs relating to the
announced closure of the Group’s manufacturing facility in
Pennsylvania, USA. The charge was classified as selling, general
and administrative expenses within operating loss. Cash costs
defrayed in the year total £342,000 (2020: £nil).
- Restructuring charges of
£3,020,000 (2020: £nil) consist of employee related costs of
£1,540,000 (2020: £nil) and site decommissioning costs of
£1,480,000 (2020: £nil) relating to the announced closure of the
Group’s manufacturing facility in Singapore. The charge was
classified as selling, general and administrative expenses within
operating loss. Cash costs defrayed in the year total £nil (2020:
£nil).
|
2021£’000 |
2020£’000 |
Loss attributable to equity shareholders |
(31,002) |
(3,271) |
Non-controlling interest |
- |
378 |
Finance
costs |
2,213 |
2,165 |
Tax |
8,811 |
(1,001) |
Depreciation of property, plant and equipment |
13,309 |
12,983 |
Depreciation of right of use assets |
3,854 |
3,681 |
Amortisation of intangible fixed assets |
8,047 |
7,869 |
Loss/(profit) on disposal of PPE |
(77) |
182 |
Adjusted Items |
13,524 |
7,115 |
Share based payments |
1,691 |
265 |
Chief Executive Officer Recruitment |
741 |
- |
Restructuring |
3,681 |
162 |
Impairment of intangibles |
7,411 |
6,537 |
Patent dispute settlement and legal costs |
- |
(1,689) |
Onerous contract provision |
- |
1,840 |
Impairment of financial asset |
- |
3,788 |
Share of joint venture losses (financial asset) |
- |
(3,788) |
Adjusted EBITDA |
18,679 |
30,101 |
Share based payments |
(1,691) |
(265) |
Chief Executive Officer
Recruitment |
(741) |
- |
Restructuring |
(3,681) |
(162) |
Patent dispute settlement and
legal costs |
- |
1,689 |
Onerous contract
provision |
- |
(1,840) |
Impairment of financial
asset |
- |
(3,788) |
Share
of joint venture losses (financial asset) |
- |
3,788 |
EBITDA |
12,566 |
29,523 |
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 in order 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 allow 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 5.
|
2021£’000 |
2020£’000 |
Loss attributable to ordinary shareholders |
(31,002) |
(3,271) |
Adjustments to loss after tax (note 4) |
11,721 |
5,595 |
Adjusted (loss)/profit attributable to ordinary
shareholders |
(19,281) |
2,324 |
|
|
|
|
2021Number |
2020Number |
Weighted average number of ordinary shares |
801,653,662 |
797,228,579 |
Dilutive share options |
4,097,303 |
11,395,298 |
Adjusted weighted average number of ordinary
shares |
805,750,965 |
808,623,877 |
|
|
|
Adjusted
basic loss per share |
(2.41p) |
0.29p |
Basic
loss per share |
(3.87p) |
(0.41p) |
|
|
|
Adjusted diluted loss per share |
(2.41p) |
0.29p |
Diluted loss per share |
(3.87p) |
(0.41p) |
6. Cash generated from operations
Group |
2021£’000 |
2020£’000 |
|
|
|
Loss
before tax |
(22,191) |
(3,894) |
Finance
costs |
2,213 |
2,165 |
Depreciation of property, plant and equipment |
13,309 |
12,983 |
Depreciation of right of use assets |
3,854 |
3,681 |
Amortisation of intangible assets |
8,047 |
7,869 |
Impairment of intangible assets |
7,411 |
6,537 |
Impairment of PP&E |
74 |
- |
Impairment of financial assets |
- |
3,788 |
Share of
joint venture |
- |
(3,788) |
Inventory write downs (note 17) |
866 |
3,025 |
Loss/(profit) on disposal of fixed assets |
(77) |
182 |
Non-cash provision movements |
3,617 |
2,002 |
Share based payments |
1,691 |
265 |
Cash inflow from operations before changes in working
capital |
18,814 |
34,815 |
(Increase)/decrease in inventories |
(1,368) |
(4,128) |
Decrease/(increase) in trade and other receivables |
2,930 |
(7,151) |
(Decrease)/increase in trade and other payables |
(1,493) |
11,921 |
Cash inflow from operations |
18,883 |
35,457 |
The financial information set out above does not constitute the
company's statutory accounts for the years ended 31 December 2021
or 2020 but is derived from those accounts. Statutory accounts for
2020 have been delivered to the registrar of companies, and those
for 2021 will be delivered in due course. The auditor has reported
on those accounts; their reports were (i) unqualified, (ii) did not
include a reference to any matters to which the auditor drew
attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under section 498 (2) or (3) of
the Companies Act 2006.
ABOUT IQE
http://iqep.com
IQE is the leading global supplier of advanced
compound semiconductor wafers and materials solutions that enable a
diverse range of applications across:
- handset devices
- global telecoms infrastructure
- connected devices
- 3D sensing
As a scaled global epitaxy wafer manufacturer, IQE is uniquely
positioned in this market which has high barriers to entry. IQE
supplies the whole market and is agnostic to the winners and losers
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 c. 685
employees across nine manufacturing locations in the UK, US, Taiwan
and Singapore, and is listed on the AIM Stock Exchange in
London.
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