Interim Results

11 March 2014

PURE WAFER PLC

("Pure Wafer" or "the Company")

Interim Results for the six months ended 31 December 2013

Strong trading momentum maintained; net cash of $1.3m at period-end

Pure Wafer plc, the provider of high quality silicon wafer reclaim services for many of the world's leading semiconductor manufacturers, today reports its interim results for the 6 months to 31 December 2013.

HIGHLIGHTS

Financial Highlights

· Group revenue of $18.2m (6 months to 31 December 2012: $18.5m);

· Operating profit up 34% at $2.2m (6 months to 31 December 2012: $1.6m);

· Pre-tax profit up 46% at $2.1m (2012: $1.4m);

· Net cash inflow from operating activities of $3.2m (2012: $2.8m);

· Net cash of $1.3m at period-end (2012: Net debt $3.4m);

· Balance sheet further strengthened;

Operational Highlights

· Continuing increase in 300mm volume sales, 6.5% increase over comparative period

· Planned capacity expansion substantially completed

· Continued tight cost control and monitoring through engineering led activities

Stephen Boyd, Chairman, commented,

"We are delighted that Pure Wafer has significantly increased its pre-tax profitability during this period of trading. This strong trading performance has combined with increased cash generation and has moved the Company into a net cash position, signifying long term stability for the Company. With the semiconductor industry forecast to continue on its growth path for a number of years and the installation of our planned capacity expansion expected to be fully operational before the year-end, we are confident of benefiting further from this continued industry growth.

"Given the Company's strong cash generation and net cash position, the introduction of dividend payments is under active consideration by the Board and, in the absence of unforeseen circumstances, the Directors currently expect to be able to recommend the payment of a final dividend in respect of the results for the current year as a whole."

ENQUIRIES

Interim Results for the six months ended 31 December 2013

Chairman's Statement

Introduction

I am delighted to report that the interim results for the period to 31 December 2013 shows a significant increase in pre-tax profitability, continued strong cash generation, with net cash of $1.3m at the period-end. These results once again demonstrate the significant strides forward that the Company continues to make in consolidating its standing within the semiconductor industry as one of the leading wafer reclaim companies in the world, reflected in the increased levels of demand for our core product and technical expertise.

Whilst group revenue is marginally lower than for the comparative period, this follows a further planned reduction in the Group's solar division activities, reflecting reduced demand for domestic solar systems largely due to a change in UK government policy to reduce feed-in-tariffs. Core wafer reclaim revenue increased during the period with volume sales of 300mm wafers increasing six and a half per cent compared with the comparative period.

During the period we continued to benefit from the continued strength of the global semiconductor industry, particularly in Asia, which was reflected in increases in volume demand.

On the back of growing demand within the semiconductor industry which industry analysts currently forecast will continue until 2018, and with many of our customers having made substantial capital investment in 300mm silicon chip manufacturing facilities, we embarked upon a capacity expansion programme, with a planned increase of 40% to our 300mm capacity across both of our manufacturing sites. I am pleased to report that this investment has already been substantially completed at Swansea and is scheduled to be completed by June 2014 at our Prescott facility.

Financial performance

· Group revenue of $18.2m (6 months to 31 December 2012: $18.5m);

· Operating profit up 34% at $2.2m (6 months to 31 December 2012: $1.6m);

· Pre-tax profit up 46% at $2.1m (2012: $1.4m);

· Net cash inflow from operating activities of $3.2m (2012: $2.8m);

· Net cash at period-end of $1.3m (2012: Net debt $3.4m);

· Basic earnings per share 7.6c (2012: 9.2c);

Whilst earnings per share is showing a decrease against the comparative period this is the result of the following: In November 2012, the Company issued a total of 140,905,232 Ordinary Shares of 2 pence each following a successful Placing and Open Offer. The timing of this share issue within the six month period ended 31 December 2012 has had a significant impact on the calculation of the weighted average number of Ordinary Shares. Therefore the current earnings per share as stated above is lower than that for the comparative period. If this share issue had occurred at the beginning of the six month period ended 31 December 2012 then the earnings per share figures for the comparative period would have been circa 5.6c (basic) and 5.0c (diluted).

Operational

During the period we have continued to experience rises in volume sales achieved in recent periods with an increase in 300mm wafer reclaim volume sales of 6.5% when compared to the comparative period to 31 December 2012, whilst 200mm volumes increased by 8.5% during the period.

The increased volumes have come not only from industry growth but also from an increased market share, which has enabled the Group to raise production levels without any significant increases in labour costs and to operate at record levels of productivity.

The majority of production equipment required for the increased capacity in Swansea, UK has been ordered and delivered with several key items already installed and currently in production. The remainder will be production-ready during the second half of FY2014.

The installation of the additional manufacturing equipment for Prescott, US will commence and become operational during the second half of FY2014.

The Group's emphasis on tight cost control and monitoring through engineering led activities together with the maintenance of high productivity levels, continues to ensure that performance is optimised without compromising the quality of our product offering.

Corporate

The work of restructuring and strengthening the balance sheet which commenced with our refinancing in November 2012 has continued with the successful completion of a one-for-ten share consolidation last November to reduce administrative costs and a share capital reduction which eliminated the historic deficit. This has put the Company in a position from which it will be able to pay future dividends. Given the Company's strong cash generation and net cash position, the introduction of dividend payments is under active consideration by the Board and, in the absence of unforeseen circumstances, the Directors currently expect to be able to recommend the payment of a final dividend in respect of the results for the current year as a whole.

Outlook

With semiconductor industry analysts projecting continued growth through to 2018 as the world's appetite for multifunctional handheld devices show no sign of abating, Pure Wafer's confidence in the long term outlook remains positive.

Pure Wafer is well positioned to take advantage of this sustained growth as the business is scaled to accommodate increasing demand, through our record levels of productivity which underpin a lower cost of manufacture. We continue to invest in and actively demonstrate our technology advancement, keeping abreast of the requirements of our blue chip, world leading customer base, working with individual customers to provide the bespoke service and technical excellence that they demand.

Stephen Boyd

Chairman

11 March 2014

PURE WAFER PLC

Interim Results for the six months ended 31 December 2013

Consolidated Income Statement

The results stated above arose entirely from continuing activities.

There have been no recognised gains or losses for the current or prior financial periods other than as stated in the income statement and, accordingly, no separate statement of comprehensive income is presented.

 Consolidated Balance Sheet

Consolidated Cash Flow Statement

Notes to the Accounts

1. Basis of preparation

The consolidated interim financial statements of the Company have been prepared in accordance with the recognition and measurement criteria of IFRS and the disclosure requirements of the AIM Rules using the accounting policies set out in the Group's 30 June 2013 statutory accounts. The AIM Rules do not require compliance with the requirements of IAS 34 "Interim Financial Statements" and these consolidated interim financial statements have been prepared in compliance with the disclosure requirements of that standard. The consolidated interim financial statements have not been audited or reviewed and do not constitute the Company's statutory accounts within the meaning of Section 435 of the Companies Act 2006.

Clarification on the restatement of consolidated income statement costs

Cost of sales and other administrative expenses for the six month period ended 31 December 2012 and the year ended 30 June 2013 have been restated in order to ensure that the presentation of the prior period results is consistent with the current year. Certain expenses have been reclassified as the Directors consider this to be a more appropriate classification. The impact of the restatement is to increase cost of sales and decrease other administrative expenses by $490k and $942k respectively. The reclassification has had no impact on earnings before interest, taxation, depreciation and amortisation, operating profit or the net assets of the comparative periods.

Depreciation and amortisation charge for the six month period ended 31 December 2012 has been restated in line with the Directors' review of useful lives which was completed during the year ended 30 June 2013. The impact of the restatement is to decrease the depreciation and amortisation charge by $1,172k.

Going concern

The Group's business activities, together with the factors likely to affect its future development, performance and position, are set out in the Chairman's Statement on page 2. The Directors have considered the Group's performance to date and reviewed the cashflow forecasts for the forthcoming period. The Directors believe the facilities that are in place will be sufficient for the business to continue trading for the foreseeable future. Accordingly, the Directors have a reasonable expectation that the Group and the Company have adequate resources to continue in operational existence for the foreseeable future. For this reason, the interim financial statements continue to be prepared on a going concern basis.

2. Business and geographical segments

3. Reconciliation of other gains and losses

4. Earnings per share

The basic earnings per share is calculated by dividing profit attributable to ordinary shareholders by the weighted average number of ordinary shares in issue during the year. For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares.

Earnings per share have been calculated as follows:

The comparative calculations above have been restated to reflect the 1 for 10 Ordinary Share consolidation exercise, which was approved by Shareholders on 27 November 2013.

In November 2012, the Company issued a total of 140,905,232 Ordinary Shares of 2 pence each following a successful Placing and Open Offer. The timing of this share issue within the six month period ended 31 December 2012 has had a significant impact on the calculation of the weighted average number of Ordinary Shares as stated above. Therefore the current earnings per share as stated above is lower than that for the comparative period. If this share issue had occurred at the beginning of the six month period ended 31 December 2012 then the earnings per share figures for the comparative period would have been circa 5.6c (basic) and 5.0c (diluted).

5. Cash flows from operating activities

6. Changes in equity

On 8 October 2013 the Company issued and allotted 100,000 Ordinary Shares of 2 pence each pursuant to the exercise of share options under the Company's Enterprise Management Incentive Share Option Scheme at a price of 2 pence each.

On 15 October 2013 the Company issued and allotted 7,500,000 Ordinary Shares of 2 pence each pursuant to the partial exercise of the RBS share warrants at a price of 2 pence per share.

On 18 October 2013 the Company issued and allotted 200,000 Ordinary Shares of 2 pence each pursuant to the exercise of share options under the Company's Enterprise Management Incentive Share Option Scheme at a price of 2 pence each.

On 24 October 2013 the Company issued and allotted 100,000 Ordinary Shares of 2 pence each pursuant to the exercise of share options under the Company's Enterprise Management Incentive Share Option Scheme at a price of 2 pence each.

On 27 November 2013, following approval by Shareholders, all existing Ordinary Shares of 2 pence each were consolidated into New Ordinary Shares of 20 pence each.

On 4 December 2013 the Company issued and allotted 20,000 Ordinary Shares of 20 pence each pursuant to the exercise of share options under the Company's Enterprise Management Incentive Share Option Scheme at a price of 20 pence each.

On 24 December 2013 the Company issued and allotted 15,000 Ordinary Shares of 20 pence each pursuant to the exercise of share options under the Company's Enterprise Management Incentive Share Option Scheme. 10,000 of these Shares were issued at a price of 20 pence each and 5,000 were issued at a price of 40 pence each.

On 27 December 2013 the Company issued and allotted 305,000 Ordinary Shares of 20 pence each, of which 255,000 are pursuant to the exercise of warrants exercisable at a price of 20 pence each and 50,000 are pursuant to the Company's Executive Management Incentive Scheme, 25,000 of which are exercisable at a price of 20 pence each and 25,000 are exercisable at a price of 40 pence each.

7. Circulation

A copy of this announcement is available from the Company Secretary, Pure Wafer plc, Central Business Park, Swansea Vale, Swansea, SA7 0AB. A copy is also available on the Company's website: www.purewafer.com.