Final Results

PURE WAFER PLC

(AIM: PUR)

Preliminary Results for year ended 30 June 2011

Pure Wafer plc ("Pure Wafer" or "the Group"), the provider of high quality silicon wafer reclaim services for many of the world's leading semiconductor manufacturers as an integral part of their cost control programmes, today reports its financial results for the year to 30 June 2011.

Chairman's statement

Introduction

The year to 30 June 2011 saw the semiconductor industry move from recovery to growth with Pure Wafer continuing to benefit from the additional volume business from all geographical areas in which we trade and with all customers across the various sectors of the industry.

The industry growth in general and the projected increasing worldwide demand for hand held devices and tablets also prompted some of our major customers to announce extensive capital expenditure plans for new 300mm manufacturing facilities coming on line between now and 2014 both in Asia and North America. These announcements and actions give exciting long term prospects for Pure Wafer.

During the financial year as volume demand strengthened and the confidence in a period of sustained growth returned there has been an acceptance of selling price increases across the customer base and an acknowledgement that the low prices of previous periods were unsustainable for the industry. The Group has therefore been successful in implementing price increases across its customer base.

The unfortunate events in Japan following the tsunami in February resulted in additional business for Pure Wafer in our fourth quarter, as our customers looked to ensure that their reclaim wafer supply was maintained as our Japanese competitors struggled to maintain their service.

During the financial year we saw the Pure Wafer solar panel business successfully achieve full accreditation under the Microgeneration Certification Scheme (MCS) for all our solar products and our solar installations. This enables our customers to take advantage of the UK Government's feed-in-tariff. The accreditation of our products provides us with a strong platform on which to build.

Financial results

• Turnover $29.7m (2010: $24.8m)

• EBITDA $3.2m (2010: $1.3m (pre restructuring charges))

• Operating loss $3.8m (2010: $6.8m)

• Pre-tax loss $5.1m (2010: $8.0m)

• Basic loss per share 3.6c (2010: loss per share 5.1c)

The results show significant improvement on prior years, and the board is encouraged by the actions of the management team during the period to take advantage of the market conditions to maximise revenue and to continue reducing costs across all sectors of the business.

Group Funding

During the period we successfully completed negotiations with our bank and asset funders of a further financial restructuring package which will assist the management of our working capital requirement, arising from the increased volumes of wafer reclaim and the potential growth in our solar business.

The financial agreements comprise a further 6 months of capital payments holiday on the asset based debts and a rescheduling of the capital repayments over a 42 month period commencing on 1st January 2012 and concluding by 30th June 2015. The agreement also includes an increased bank overdraft facility of up to £1.7million ($2.7million).

The Company's existing bank debt continues to be repaid in accordance with the original restructuring agreement completed in August 2009.

The latest financial restructuring agreement further demonstrates the commitment that the bank and asset funders have to Pure Wafer and shows a confidence in the recovery of the business, and I would like to thank them for their support.

Management

I would like to thank the entire team for their support and efforts during a year in which activity levels increased and our solar products were accredited.

Outlook

The current period has commenced strongly with a continuation of high volumes enjoyed during our fourth quarter. It is particularly pleasing that high and stable volumes are being seen from our customers in all geographical regions, this together with the 300mm manufacturing facilities currently under construction by the semiconductor industry and in some cases nearing completion, gives an optimistic long term outlook.

On the flip side the worldwide fear of a second recession due to the uncertainty in the financial markets and the effect of this on consumer confidence has prompted the industry to consider its levels of inventory. Many industry analysts are predicting a short term industry slowdown during our second quarter with full production returning during the beginning of the second half of our financial year.

The launch of our solar products is a very exciting time for Pure Wafer because we believe that the renewable energy market has massive potential growth both globally and significantly here in the UK, underpinned by the introduction of the government backed feed-in-tariff in April 2010. The 2012 financial year has started well, following successful accreditation of our products in 2011, a number of solar installations have been completed. Our order book is building with a mix of domestic and large commercial installations. We have been successful in being awarded a contract for a local community housing scheme for roof-top solar PV systems with a potential value of up to £1million and are well placed to win other major solar contracts in the public sector all for completion this forthcoming financial year.

These factors together with our financial restructuring providing additional working capital, gives Pure Wafer a strong foundation on which to move forward.

Stephen Boyd

Chairman

3 November 2011

Chief Executive's review

Operational Review

The financial year to June 2011 continued the upward trend that we enjoyed during last financial year with continued growth in volumes across all diameter sizes of wafers both in Swansea and Prescott as the semiconductor industry continued to grow.

Volume sales for the Group grew during the period with 300mm wafer reclaim up by 27% when compared to the prior year, and 200mm wafer reclaim up 24%. Whilst we were encouraged by the volume sales for the first half of the year, the second half of the year saw even stronger growth with increases on 300mm of 22% when compared to the first half.

A significant challenge for our operational teams was to process the additional and growing volumes whilst maintaining the cost reductions and benefits gained during the prior periods, in a market where our suppliers were requesting price increases for the majority of our consumable items. I am very pleased to report that we managed to build on our past successes and reduce costs per wafer even further by 10% compared with the prior financial year. These cost savings were in part due to economies of scale but also due to successful engineering activities to reduce consumable usage and costs within our processes, all without affecting the quality of the Group's product offering.

The processing of the increased volumes was also achieved with a modest increase in headcount and thus Pure Wafer benefited from cost efficiencies as record levels of productivity were achieved in both the Swansea and Prescott facilities. I would like to thank all our employees for their hard work and support during the year, enabling Pure Wafer to continue to trade competitively throughout this period.

Highlights

§ Sales Volumes have seen continued growth

o 300mm up by 27% and 200mm up by 24% when compared to prior year

o Strong increases in volumes 2nd half over 1st half

§ Selling price increases for 300mm customers

§ Cost reductions continued, leading to a 10% reduction in cost per unit compared to prior year

§ Microgeneration Certification Scheme (MCS) accreditation of our solar products allowing us to commence trading in 2012

§ Group banking arrangements have been restructured to ease working capital demands

o Asset based debt rescheduled over existing term including an initial six month capital moratorium

o Additional banking facilities of up to £1.7 million ($2.7million)

§ Business now stabilised with low cost of manufacture, in a growing market, with significant installed capacity

Swansea site, UK

The Swansea site continued to see growing demand from our European and Asian customers during the period with 300mm volume sales growing by 28% compared to the prior year and 200mm volume sales increasing by 15%. The second half of the financial year showed strong growth compared to the first half for our 300mm volumes with a 26% increase whilst the 200mm volumes dropped by 20% as one of our major customers completed their transition from 200mm to 300mm manufacturing.

Prescott site, Arizona, USA

The Prescott, Arizona facility is now running large scale 300mm production, and has made significant progress in increasing our 300mm wafer reclaim market share in the US, where we are actively engaged with every major 300mm integrated chip manufacturer who have a manufacturing presence in the US. Volume sales grew for the period with 300mm up by 23% when compared to the prior year and 200mm up by 29%. With the quality of our offering equal to the stringent requirements of our blue chip customer base we envisage further significant market gains.

With the Group's current installed capacity for 300mm and smaller diameter wafers at Pure Wafer's high quality facilities in Swansea and Prescott, Arizona, together with the reduced cost per wafer, the Board believe that the Company is well placed for future growth.

Solar pv

This was an exciting year for the Pure Wafer solar panel business, during which we successfully achieved full accreditation of our solar products and our solar installations under the Microgeneration Certification Scheme (MCS) following delays in the accreditation process, due to a lack of testing facilities here in the UK. With the MCS accreditation, any installation by Pure Wafer or with Pure Wafer products enables our customers to take advantage of the Government feed-in-tariff. We were also able to bed in our manufacturing lines. The interest and uptake of our products has been strong and whilst revenue generation during this period has been negligible, the foundations are now in place for substantial growth. With the solar pv market being one of the fastest growing sectors in the UK currently, we see this as a exciting addition to our portfolio of products and are confident that it will provide significant revenue and profitability to the group.

Peter Harrington

Group Chief Executive

3 November 2011

Financial review

Reporting currency

This is the second year we have reported in dollars, the currency of the industry we are in. This alignment of functional currency and reporting currency allows us to produce accounts that are clearer and more transparent without the need for the large and numerous adjustments required at the year end to deal with the difference between functional and reporting currencies.

Volumes and Revenue

The volume of 300mm equivalent wafers processed at 1,195,000 (2010: 959,000) was an increase of 25% in the year. Revenue for the year was $29.7m, an increase of 20% on last year (2010: $24.8m); reflecting the impact of increased volumes and increased selling prices. An analysis of turnover by origin and destination can be found in note 5.

Gross profit

Gross profit stood at $8.3m (2010: $5.2m), an increase of 60%, as a result of increased volumes processed and the cost saving intitiatives implemented in the period.

Operating loss

The operating loss of $3.8m (2010: loss of $6.8m) was achieved after incurring no restructuring costs. (2010: restructuring costs of $0.8m)

Administrative expenses

Administrative expenses of $12.1m (2010: $11.2m) for the group show an increase on the prior year. This increase has been driven principally by rising staff costs.

Loss before tax

The loss before tax was $5.1m (2010: $8.0m).

Foreign exchange

We continue to convert as much of the cost base as possible to US Dollars in order to provide a natural hedge against the US Dollar revenue streams.

Cash flow

Cash flow from operations this year showed a net inflow of $1.4m (2010: outlow $0.3m).

Taxation

There is no current tax charge across the group. During the year the group submitted a claim in respect of qualifying Research and Development, the amounts received are shown in note 11. Due to the losses incurred during the year, the board has taken the decision not to recognise the deferred tax asset of $9.3m (2010: $10.0m) pertaining to accumulated losses in the UK as it is not expected to be utilised within the foreseeable future.

Tim Lowe

Group Finance Director

3 November 2011

Consolidated income statement

year ended 30 June 2011

All activities derive from continuing operations.

The loss for the parent company for the year was $952k (2010: loss of $1,170k).

Consolidated statement of comprehensive income

year ended 30 June 2011

Consolidated statement of changes in equity

year ended 30 June 2011

Consolidated balance sheet

As at 30 June 2011

Consolidated cash flow statement

As at 30 June 2011

NOTES TO THE PRELIMINARY RESULTS

Year ended 30 June 2011

1. Publication of Non-Statutory Accounts

The financial information set out in this announcement does not comprise the Group`s statutory accounts for the years ended 30 June 2011 or 30 June 2010.

The financial information has been extracted from the statutory accounts of the Company for the year ended 30 June 2010 which have been delivered to the Registrar of Companies. The auditors` opinion on those accounts was unqualified and did not contain a statement under section 498 (2) or section 498 (3) Companies Act 2006 and did not include references to any matters to which the auditor drew attention by the way of emphasis.

The statutory accounts for the year ended 30 June 2011 will be finalised on the basis of the financial information presented by the directors in this announcement and will be delivered to the Registrar of Companies following the Company`s Annual General Meeting.

2. GENERAL INFORMATION

Pure Wafer plc is a company incorporated in the United Kingdom under the Companies Act 2006. The address of the registered office is Pure Wafer plc, Central Business Park, Swansea Vale, Swansea SA7 0AB.

ADOPTION OF NEW AND REVISED STANDARDS

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union as they apply to financial statements of the group for the year ended 30 June 2011 and applied in accordance with the Companies Act 2006. The financial statements have been prepared in accordance with the historical cost convention.

The following new standards, new interpretations and amendments to standards and interpretations have been issued but are not effective for the financial year beginning 1 July 2010 and have not been early adopted.

·; IAS 24 (revised) 'Related party disclosures' effective for periods beginning on or after 1 January 2011. This amends the requirements for related party disclosures but is not expected to impact the group significantly.

·; IFRS 9 'Financial instruments - classification of financial assets and financial liabilities' effective for periods beginning on or after 1 January 2013. The group is yet to assess IFRS 9's full impact however initial indications are that there will not be a material impact on adoption of the standard.

·; IFRS 10 'Consolidated financial statements' effective for periods beginning on or after 1 January 2013. This standard changes the basis of including companies in the consolidated financial statements but is not expected to impact the group financial statements signifcantly.

·; IFRS 11 - 'Joint arrangements' effective for periods beginning on or after 1 January 2013. This standard significantly amends the accounting treatment of joint arrangements but is not expected to impact the group.

·; IFRS 12 - 'Disclosure of interests in other entities' effective for periods beginning on or after 1 January 2013. This alters the disclosure requirements for companies holding investments in subsidiaries, joint arrangements and other entities. It will amend the disclosures of the company but is not expected to have a significant impact.

·; IFRS 13 - 'Fair value measurements' effective for periods beginning on or after 1 January 2013. This standard applies to all fair value amounts and disclosures in the financial statements and may, therefore, have an impact on the group. The company has not yet assessed this potential impact.

·; Annual improvements 2010 effective for periods beginning on or after 1 January 2011. These are minor amendments to various accounting standards and are not expected to impact the group.

·; Amendment to IFRS 1 'First-time adoption - exemption for severe hyperinflation and removal of fixed dates' effective for periods beginning on or after 1 July 2011. This is not expected to impact the group

·; Amendment to IFRS 7 - 'Financial instruments: Disclosures -disclosures on transfers of financial assets' effective for periods beginning on or after 1 July 2011. This is not expected to impact the group.

·; Amendment to IAS 12 'Income taxes - deferred tax accounting for investment properties' effective for periods beginning on or after 1 January 2012. This is not expected to impact the group.

·; Amendment to IFRIC 14 'Pre-payments of a Minimum Funding Requirement' effective for periods beginning on or after 1 January 2011. This is not expected to impact the group.

3. business and geographical segments

Business and geographical segments are reported in a manner consistent with internal reporting provided to the Chief Operating Decision-Maker, which has been identified as the Pure Wafer Plc Board.

The group's activities and turnover primarily consist of the reclamation and reprocessing of silicon test wafers, in the UK and the US, for external customers. The Solar business is not deemed to be a separate segment for the purposes of the 2011 results as it did not commence commercial trading until after the year-end.

For management purposes, the group is organised into two operating divisions based on the geographical territory of origin. These divisions are the basis on which the group reports its primary segment information.

Segment information is presented below:

Analysis by-product

The revenue by-product variant was as follows:

Analysis by destination

The revenue by destination was as follows:

4. LOSS per share 

The calculation of the basic and diluted loss per share is based on the following data:

5. Interest-bearing loans and borrowings

Overdrafts are repayable on demand. Bank loans, hire purchase and finance lease obligations are repayable as follows:

Obligations under finance lease and hire purchase contracts are secured on the related assets. See note 6 for further detail on finance lease contracts. The bank loans are secured on the assets and undertakings of the group.

The fair value of the group's loan, finance leases and hire purchase obligations approximates to their carrying amount.

On 3 August 2011 the group reached an agreement with its lenders to restructure the capital repayment terms of hire purchase and finance leases. Under the terms of this revised arrangement capital repayments will not recommence until January 2012. At 30 June 2011 the relevant borrowings were classified according to the repayment profile in place at that date.

6. Obligations under finance leases

It is the group's policy to lease certain plant and machinery under finance leases.

The contractual payments in respect of finance leases based on the undiscounted cash flows and the earliest date on which the group and company can be required to pay are shown above.

For the year ended 30 June 2011, the average effective borrowing rate was 7.4% (2010: 7.4%). Interest rates are fixed at the contract date. All leases are on a fixed repayment basis and no arrangements have been entered into for contingent rental payments. The carrying amount of the borrowings approximates their fair value.

All lease obligations are denominated in USD. The fair value of the group's lease obligations approximates to their carrying amount. The group's obligations under finance leases are secured by the lessors' rights over the leased assets.

7. notes to the consolidated cash flow statement

8. Annual Report and Annual General Meeting

The Annual Report will be will be posted to shareholders on or around 11th November 2012 and will be available from the Company`s website, www.purewafer.com, shortly thereafter. The Annual Report contains notice of the Annual General Meeting of the Company which will be held at 11.00am on 14 December 2011 at Pure Wafer plc, Central Business Park , Swansea Vale, Swansea SA7 0AB.