28th Sep 2005 07:02
Pure Wafer PLC28 September 2005 28 SEPTEMBER 2005 PURE WAFER PLC ("Pure Wafer" or "the company") Preliminary Results for year ended 30 June 2005 Pure Wafer provides high quality silicon wafer reclaim services for many of theworld's leading semiconductor manufacturers. These are Pure Wafer's first fullyear results since the company listed on AIM in December 2004. HIGHLIGHTS Financial • Turnover of £9.17m, an increase of 93% over the previous year (2004:£4.74m). • EBITDA of £1.38m (2004: EBITDA loss of £1.43 million). • Operating loss of £230k (2004: operating loss of £3.03 million). • Pre-tax loss of £142k (2004: pre-tax loss of £3.2 million). • Profitable second half of year (H1 pre-tax loss: £480k vs H2 pre-tax profit: £338k). • Loss per share of 0.59p (2004: loss per share of 14.77p). • Strong cash position, with £4.97m in the bank as at 30 June 2005. Operational • Continued increase in volumes and orders from a growing international customer base, especially in volumes of 300mm wafers, the fastest growing area of the wafer reclaim market. • £1.97m invested in new equipment, with a further £1.14m committed as at 30 June 2005. • Significant increase in capacity for 300mm wafer reclaim. Giles Clarke, Chairman of Pure Wafer, commented: "Pure Wafer has delivered an excellent performance. It proves just howsuccessful we have been in reclaiming growing volumes of silicon wafers for anincreasing number of customers, including some of the largest semiconductormanufacturers in the world. "The future is equally encouraging: not only will we grow our core 300mm waferreclaim business as more capacity comes on stream and demand continues to rise,but we also see opportunities to apply our advanced cleaning and polishingskills in a number of other industries." ENQUIRIES Pure Wafer plc (www.purewafer.com) Tel. +44 (0) 20 7651 8688 (today)Keith Baker, Chief Executive +44 (0) 1792 311 200 (thereafter)James Dearing, Group Finance Director ICIS Tel. +44 (0) 20 7651 8688Archie BerensCaroline Evans-Jones NOTES FOR EDITORS About Wafer Reclaim During the many stages of the manufacturing process of semiconductors, largequantities of test wafers are used to check the accurate calibration ofequipment. Once used, these test wafers have no further use, unless they can bereclaimed. Reclaiming them for re-use thus represents a substantial cost savingfor semiconductor manufacturers. The semiconductor industry is currently seeing a rapid transition to 300mmwafers. In order for manufacturers to continue to increase functionality at areduced cost, the industry has sought to increase the size of wafers on whichsemiconductors are manufactured. 300mm wafer processing now represents thefastest growing area of the semiconductor industry. However, wafer reclaim is a highly specialised and technically sophisticatedprocess. Only a few companies worldwide are able to meet the exacting standardsrequired by semiconductor manufacturers for the reclaim of 300mm wafers, ofwhich Pure Wafer is one. About Pure Wafer Pure Wafer is an industry leading provider of silicon wafer reclaim services.Pure Wafer cleans and polishes silicon wafers sent for reclaim by many of theworld's largest semiconductor manufacturers. Pure Wafer operates a state of theart foundry that has received over £40m of investment to meet the stringentstandards of purity and flatness required by its customers. Pure Wafer is listed on the Alternative Investment Market of the London StockExchange. Headquartered in the UK, it operates on a global basis through aninternational sales force throughout Europe, United States and South East Asia. Pure Wafer plc Preliminary Results for Year Ended 30 June 2005 Chairman's Statement Introduction I am pleased to report that Pure Wafer has delivered an excellent performance inthe financial year ended 30 June 2005, where we have not only met but exceededour original expectations for the period. This performance is a real indicationof the traction Pure Wafer is gaining in its market place, the true potential ofits capabilities and evidence of the level of demand that exists for ourservices. Financial Results • In the year to 30 June 2005, Pure Wafer achieved sales of £9.17m, an increase of 93% compared to the corresponding period last year (£4.74m). • Earnings before interest, tax, depreciation and amortisation ("EBITDA") were £1.38m compared to an EBITDA loss of £1.43m for the year ended 30 June 2004. • The operating loss for the period was £230,000 (2004: operating loss of £3.03m). • Pre-tax losses were £142,000, compared to a pre-tax loss of £3.2m for the year ended 30 June 2004. • The loss per share for the period was 0.59p (2004: loss per share of 14.77p). • Strong cash position, with £4.97m in the bank as at 30 June 2005. Market Position Pure Wafer has an unusual business model, in that its service is rapidlybecoming an integral part of customers' production processes, very differentfrom the normal position of a supplier. The process of attaining this statustakes years of qualification and represents a major investment for the customer,as well as Pure Wafer. Qualification and further integration into asemiconductor manufacturer's production process forms the basis of the long termsupply relationship with our customers in this repeat order business whereswitching costs are high. These characteristics in our business give us a highdegree of confidence in predicting further sustained growth. In our last update, we stated we were investigating other applications of ourtechnology and facilities, and we continue to make good progress in these areas. AIM listing Another highlight of the first half of the year was the completion of PureWafer's successful introduction to the AIM market, which provided the funds forinvestment in additional capacity. It is this support that, more recently inJune 2005, made easier the placing with institutions of the shareholdings of IBMand HBOS. These were early stage investors in Pure Wafer and their combinedshareholdings represented 27% of the company. Since flotation we have purchasedseveral key items of manufacturing equipment, which are now installed andworking satisfactorily. Management In December 2004, as part of the process of achieving its listing on AIM, theboard was strengthened by two appointments: I became Non-executive Chairman andEurfyl ap Gwilym was appointed as a Non-executive Director. Since the end of thefinancial year, the board has been further strengthened with the arrival ofJames Dearing as the Group Finance Director. Outlook Pure Wafer is in an enviable position within its target market and has shownexcellent progress over the period. Looking further forward, we have builtourselves a well established position within the silicon wafer reclaim market,and also have the capabilities to apply our technical expertise and resources toother markets where we consider there to be significant opportunity. Finally, I would like to thank the staff of Pure Wafer for their hard work andcommitment over the past year. Giles ClarkeChairman28 September 2005 Pure Wafer plc Preliminary Results for Year Ended 30 June 2005 Chief Executive's ReviewIntroduction Pure Wafer provides a world-class wafer reclaim service through an internationalsales network to an impressive and growing list of semiconductor manufacturersaround the world. High quality wafer reclaim provides an opportunity to achievesignificant cost savings for our customers. Joint development programmes toexpand the applications for reclaimed wafers are in place at several customersites, enabled by the high quality offering of our products. We have now reached the point where we are trading profitably, growing volumeson a month-by-month basis and increasing our share of a rapidly growing market.Importantly, our listing on AIM has provided the necessary funds to continue ourprogramme of investment in new capacity that will be required to meet theincreasing levels of demand for our services. Operational review During the financial year, we have more than doubled our monthly rate of reclaimof 300mm wafers due to a combination of capital investment and operationalimprovements. In addition, the funds raised from our listing on AIM in December 2004 haveprovided the financial resources to embark on a significant expansion plan toincrease the capacity of the facility. Even with this additional capacityinstalled, there remains additional scope for further expansion within our highvolume manufacturing facility. The company has built up a varied portfolio of customers both geographicallydispersed and extending over most technologies. The company is supplying leadingmerchant semiconductor manufacturers and Asian foundries as well as leadingresearch and development facilities. The products are used to control processesfor all types of semiconductor manufacturing including DRAMs, microprocessors,logic, flash memory, ASICs and communication chips. It is thus extremely pleasing that in the last year, Pure Wafer has been able toreclaim more wafers for an increasing number of customers, demonstrating theconfidence they have in our technical capabilities. Even more encouragingly, weare experiencing increasing expressions of interest from the semiconductorindustry's leading players to reclaim significantly larger numbers of 300mmwafers. Market dynamics The 300mm wafer market will continue to be our key area of focus and thisproduct offering will play a significant role in fuelling our continued growthas the leading semiconductor manufacturers continue with the transition to themore efficient 300mm wafers. With a strong growth in the rate of increase in theuse of 300mm test wafers expected, wafer recycling programmes will form anintegral part of the semiconductor industry's drive to achieve greaterefficiencies. Despite a difficult year for the semiconductor industry, thestrong drive of our customers to expand their 300mm manufacturing capabilitieshas resulted in very strong growth in the market we service. New technology The company has maintained its position at the leading edge of technology andthrough engineering innovation has developed several significant proprietarytechnologies for increasing the capital efficiency of its manufacturing line andincreasing the yields of the wafer reclaim process. The high specificationachieved in the manufacturing process which is now operational in the50-nanometre range has opened up several new product opportunities each withstrong customer demand. Strategy for growth It has always been our aim to become the leading best value high qualitysupplier of reclaim services to the semiconductor industry. We are makingexcellent progress in achieving this goal. The dynamics of the semiconductorindustry, in particular the continuing move to manufacturing based on 300mmwafers, combined with the way in which Pure Wafer has cultivated its customerbase and built up its capacity, are good reasons to be confident that furtherorganic growth can be achieved. In addition, we believe that our existing technical capabilities and engineeringfacilities can provide the foundation to offer high quality cleaning andpolishing services in a variety of other applications beyond test wafers, withminimal additional investment and thus little risk. We are therefore confidentof our ability to effect long-term growth, in a controlled and strategic manner.This will be based on our technical expertise and on the success we have alreadyachieved in the semiconductor industry. Keith BakerChief Executive28 September 2005 PURE WAFER PLC Preliminary Results for year ended 30 June 2005 Financial Review Turnover Turnover for the period was £9.17m (2004: £4.74m), an increase of 93%. The maindriver behind this growth was the sharp increased demand for 300mm waferreclaim, whilst 200mm wafer reclaim growth was steady. Growth was partiallyrestricted in the period by the comparatively low value of the US Dollarthroughout the year. Trading continues to be in the main geographical areas of Europe, North Americaand South East Asia, analysed as follows: 2005 2004 Europe 33% 52%North America 30% 18%Middle East 6% 6%South East Asia 31% 24% Earnings before interest, tax, depreciation and amortisation (EBITDA) The group recorded its first positive EBITDA during the period at £1.38mcompared to an EBITDA loss in 2004 of £1.43m. The significant improvement in theyear reflected the increased wafer throughput that not only benefited turnover,but also provided additional margin to cover the relatively high proportion offixed costs within the business. Earnings were further enhanced by increases inoperational efficiency, driven by economies-of-scale and technical advances inproduction processes. Loss before tax The pre-tax loss for the period was £0.14m (2004: pre-tax loss £3.20m) andrepresents a significant step towards full year profitability. The pre-tax lossincurred in the first half of the year of £0.48m was partially offset by apre-tax profit of £0.34m in the second half of the year. Dividends and loss per share The Directors do not recommend the payment of a dividend. The basic loss per share for the period was 0.59p (2004: loss of 14.77p). Cash flow Net cash inflow from operating activities was £0.05m and the group was cashpositive at £4.97m as at 30 June 2005, whilst net funds were £4.95m. Capital expenditure During the period the group acquired capital equipment with a value of £1.97m,in respect of additional manufacturing equipment. This has enabled the companyto increase capacity for 300mm wafer reclaim. At the period end the group hadplaced orders worth £1.14m to continue the capacity increase programme. Post year end, a finance leasing facility has become available to the group,which will be utilised to fund some of the capital expenditure which thedirectors feel necessary to achieve the group's full future earnings potential. International Financial Reporting Standards (IFRS) The London Stock Exchange has confirmed that companies listed on AIM will nothave to apply IFRS until accounting periods commencing on or after 1 January2007. Consequently, the first set of IFRS financial statements will not berequired until the year ending 30 June 2008. In the meantime, the group will beappraising the impact of adopting IFRS and briefing accordingly. James DearingGroup Finance Director28 September 2005 PURE WAFER PLC Preliminary Results for year ended 30 June 2005 Consolidated Profit & Loss Account Year ended Year ended 30June 30June 2005 2004Notes £000 £000 ------------------------- ------------ ------------ 2 Turnover 9,171 4,744 Cost of sales (5,956) (4,757) ------------------------- ------------ ------------ Gross profit/(loss) 3,215 (13) Administrative expenses (3,445) (3,021) ------------------------- ------------ ------------ 3 Operating loss (230) (3,034) Interest receivable 164 5 4 Interest payable and similar charges (76) (172) ------------------------- ------------ ------------ Loss on ordinary activities before taxation (142) (3,201) 5 Taxation - - ------------------------- ------------ ------------ Loss for the financial period (142) (3,201) ------------------------- ------------ ------------ 6 Loss per share On average number of ordinary shares in (0.59p) (14.77p) issue On fully diluted basis (0.58p) (14.77p) ------------------------- ------------ ------------ All activities above relate to the continuing operations of the group. There are no other gains and losses for the period other than the loss for theperiod shown above and, accordingly, a separate statement of total recognisedgains and losses has not been presented. There is no difference between the loss for the financial period stated aboveand its historical cost equivalent. PURE WAFER PLC Preliminary Results for year ended 30 June 2005 Consolidated Balance Sheet 30 June 30 June 2005 2004Notes £000 £000 ------------------------------- --------- --------- Fixed assets Tangible assets 16,432 16,366 ------------------------------- --------- --------- Current assets Stock 420 326 Debtors 3,624 1,710 Cash at bank and in hand 4,974 621 ------------------------------- --------- --------- 9,018 2,657 Creditors: amounts falling due within one year (2,370) (1,529) ------------------------------- --------- --------- Net current assets 6,648 1,128 ------------------------------- --------- --------- Total assets less current liabilities 23,080 17,494 Creditors: amounts falling due after more than one year (12) (6,643) Accruals and deferred income (3,489) (3,581) ------------------------------- --------- --------- Net assets 19,579 7,270 ------------------------------- --------- --------- Share capital 530 26,865 Share premium 12,644 4,283 Merger reserve 30,425 - Profit and loss account (24,020) (23,878) ------------------------------- --------- --------- 7 Shareholders' funds 19,579 7,270 ------------------------------- --------- --------- PURE WAFER PLC Preliminary Results for year ended 30 June 2005 Consolidated Cash Flow Statement Notes Year Year ended ended 30 June 30June 2005 2004 £000 £000 --------------------------------- ----------- ----------- 8 Net cash outflow from operating activities (52) (2,480) --------------------------------- ----------- ----------- Return on investments and servicing of finance Interest received 164 5 --------------------------------- ----------- ----------- Net cash inflow from returns on investments 164 5 and servicing of finance --------------------------------- ----------- ----------- Taxation UK corporation tax - - --------------------------------- ----------- ----------- Capital expenditure and financial investment Grants received 200 - Purchase of tangible fixed assets (1,703) (66) --------------------------------- ----------- ----------- Net cash outflow on capital expenditure (1,503) (66) and financial investment --------------------------------- ----------- ----------- Net cash outflow before use of liquid funds and (1,391) (2,541) financing ----------- ----------- --------------------------------- Financing Funds received in relation to ordinary share 7,000 2,500 capital Debenture finance received - 450 Expenses of issue of ordinary shares (1,247) - Capital repayment of finance leases (9) (5) --------------------------------- ----------- ----------- Cash inflow from financing 5,744 2,945 --------------------------------- ----------- ----------- 9 Increase in cash in the year 4,353 404 --------------------------------- ----------- ----------- Reconciliation to net debt Increase in cash 4,353 404 Cashflows from movement in borrowings 9 (445) --------------------------------- ----------- ----------- 9 Movement in funds due to cashflows 4,362 (41) Non-cash movements - Conversion of debt to equity 6,450 - - New finance leases - (35) --------------------------------- ----------- ----------- 10,812 (76) Opening net debt (5,859) (5,783) --------------------------------- ----------- ----------- 9 Closing net funds / (debt) 4,953 (5,859) --------------------------------- ----------- ----------- PURE WAFER PLC Preliminary Results for year ended 30 June 2005 Notes to the Financial Statements 1. Basis of preparation These financial statements have been prepared using accounting policies thathave been consistently applied and are those used in the preparation of thefinancial statements for the period ended 30 June 2004 of Pure WaferInternational Limited (formerly Pure Wafer Limited). The group accounts of Pure Wafer plc (formerly Pure Wafer International plc)comprise the consolidation of the accounts of the company and its subsidiaryundertaking after eliminating inter-company balances and transactions. Merger accounting has been applied to the reconstruction of the group that tookplace during the year. In consequence, the results for the period are presentedas if the Pure Wafer plc group had existed and traded in its present form forthe entire period. These financial statements do not constitute the company's statutory accountsfor the years ended 30 June 2005. The comparative data in these financialstatements are the audited financial statements for the year ended 30 June 2004of Pure Wafer International Limited (formerly Pure Wafer Limited), which havebeen delivered to the Registrar of Companies. The auditors reported on thoseaccounts; their report was unqualified and did not contain a statement unders237(2) or (3) Companies Act 1985. The statutory accounts for the year ended 30June 2005 will be delivered to the Registrar of Companies after the company'sAnnual General Meeting. The auditors have reported on those financialstatements; their report was unqualified and did not contain a statement underS237(2) or (3) of the Companies Act 1985. 2. Turnover The group's activities and turnover consist solely of the reclamation andreprocessing of silicon test wafers in the UK for external customers. The group's turnover is analysed by geographical territory of destination asfollows: Year ended Year ended 30 June 2005 30 June 2004 £000 £000----------------- -------------- ------------------ Europe 3,019 2,466North America 2,775 860Middle East 569 304South East Asia 2,808 1,114----------------- -------------- ------------------ 9,171 4,744----------------- -------------- ------------------ 3. Reconciliation of operating loss for the year to EBITDA Year ended Year ended 30 June 2005 30 June 2004 £000 £000 Operating loss for the period (230) (3,034)Depreciation 1,904 1,902Release of deferred capital grant (292) (297)------------------------ -------------- -------------Earnings/(loss) before interest, tax,depreciation and amortisation 1,382 (1,429)------------------------ -------------- ------------- 4. Interest payable and similar charges Year ended Year ended 30 June 2005 30 June 2004 £000 £000 Bank loans 17 38Other loans 59 134------------------------ -------------- ------------- 76 172------------------------ -------------- ------------- The loans on which interest accrued during the year were no longer outstandingat 30 June 2005. 5. Taxation The group has approximately £26.6m (2004: £28.7m) of taxation losses carriedforward to future years. £4.5m (2004: £6.6m) of the losses has been utilised toeliminate the requirement for a deferred tax liability. The tax assessed for the period is different to the standard rate of corporationtax in the UK: 30% (2004: 30%). The differences are analysed below: Year ended Year ended 30 June 2005 30 June 2004 £000 £000 Loss on ordinary activities before tax (142) (3,301)----------------------------- ----------- ----------Loss on ordinary activities multiplied by 30% (42) (960)Impact of:- Expenses not deductible for tax purposes 16 56- Accelerated capital allowances and other timingdifferences 26 (28)- Losses carried forward to future periods - 933- Tax at marginal rates - (1)----------------------------- ----------- ---------- Current year tax charge - ------------------------------ ----------- ---------- 6. Loss per share The basic loss per share is calculated by dividing loss attributable to ordinaryshareholders by the weighted average number of ordinary shares in issue duringthe year. The calculation for 2004 is based upon the number of shares in issue at the dateof group reconstruction. For diluted loss per share, the weighted average number of ordinary shares inissue is adjusted to assume conversion of all dilutive potential ordinaryshares. Loss per share has been calculated as follows: Year ended Year ended 30 June 2005 30 June 2004 '000 '000Weighted average number of ordinary shares:- In issue during the year 24,206 21,667- Fully diluted 24,279 21,667------------------------- ------------ ------------Losses £(142) £(3,201)------------------------- ------------ ------------ 7. Movement in shareholders' funds Share Share Other Profit Total Total capital premium reserves and loss 2005 2004 £000 £000 £000 £000 £000 £000--------------------- ------ ------- ------- ------- ------- ------- Beginning ofthe year, PureWafer Limited 26,865 4,283 - (23,878) 7,270 7,471Net proceedsof new shares 97 5,946 (290) - 5,753 3,000 Redemption ofshares (26,432) - 26,432 - - - Issue ofshares for debt - 6,698 - - 6,698 - Mergeraccountingadjustments(see below) - (4,283) 4,283 - - ---------------------- ------ ------- ------- ------- ------- ------- 530 12,644 30,425 (23,878) 19,721 10,471Loss for the period - - - (142) (142) (3,201)--------------------- ------ ------- ------- ------- ------- -------End of year,Pure Wafer plc 530 12,644 30,425 (24,020) 19,579 7,270--------------------- ------ ------- ------- ------- ------- ------- The information for 2004 (ie beginning of the year) relates to the previousgroup prior to the reorganisation and purchase by a new parent company. In the year ended 30 June 2005, the application of merger accounting principlesto the group reconstruction which involved the creation of a holding companygave rise to a difference which falls to be accounted as a merger difference andincluded within the merger reserve (shown above included within "otherreserves"). 8. Cash flow from operating activities Year ended Year ended 30 June 2005 30 June 2004 £000 £000------------------------- ------------ ------------ Operating loss (230) (3,034)Depreciation of tangible fixed assets 1,904 1,902Release of deferred income (292) (297)Increase in debtors (1,423) (1,170)(Increase)/decrease in stocks (212) 121Increase/(decrease) in creditors 201 (2)------------------------- ------------ ------------Net cash outflow from operating activities (52) (2,480)------------------------- ------------ ------------ 9. Reconciliation of movement in net funds/debt At 1 July 2004 Cash flow Non-cash flow At 30 June 2005 £000 £000 £000 £000 Cash at bank 621 4,353 - 4,974-------------- ---------- --------- ----------- ---------Debentures (2,450) - 2,450 -Mortgage (2,000) - 2,000 -Other loans (2,000) - 2,000 -Finance leases (30) 9 - (21)-------------- ---------- --------- ----------- --------- (6,480) 9 6,450 (21)-------------- ---------- --------- ----------- ---------Net funds/(debt) (5,859) 4,362 6,450 4,953-------------- ---------- --------- ----------- --------- 10. Circulation A copy of this announcement is available from the Company Secretary, Pure Waferplc, Central Business Park, Swansea Vale, Swansea, SA7 0AB. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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