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IQE

16 December 2016

IQE to report greater-than-expected double-digit growth for 2016, after stronger second half

Epiwafer foundry and substrate maker IQE plc of Cardiff, Wales, UK says that, since announcing its interim results on 13 September, trading has continued to be strong across multiple markets, particularly in the photonics business. The firm is hence on track to deliver 2016 revenue and adjusted operating profit ahead of expectations. It is anticipated that revenue will reflect a double-digit growth rate year-on-year, and that second-half revenue will be up sequentially over first-half 2016.

The wireless business has largely performed as expected through 2016 and remains on track for year-on-year growth. Photonics continues to be the fastest-growing business segment (seeing strong double-digit growth year-on-year), and progress with customer qualifications during 2016 provides a solid platform for continuing strong growth. In response to this opportunity in photonics, IQE has increased its capital investment in second-half 2016. InfraRed business has performed in line with expectations, and license income has reduced from the front-loaded income seen in 2015.

Revenues (which are primarily dollar denominated) also benefitted in second-half 2016 from the devaluation of sterling following the UK's EU membership referendum on 23 June. However, the currency impact on profitability is largely presentational, as most of IQE's costs are also denominated in dollars. IQE's board is confident that IQE will exceed current full-year 2016 expectations for both revenue and adjusted operating profit. The firm will report its full-year 2016 results on 21 March 2017.

"IQE has made good progress in 2016, and is performing well against its strategic goals," comments IQE's chief executive Dr Drew Nelson. "The breadth of IQE's technologies is a competitive advantage that is enabling its continued growth, and will provide a platform for strong cash generation over the coming years."

See related items:

IQE's revenue grows 18% year-on-year in first-half 2016

IQE's first-half growth of 15% year-on-year driven by diversification

IQE's Photonics sales growth of 28% outweighs further Wireless sales drop of 11%

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