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
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.