21st Aug 2009 07:30
PURE WAFER PLC ("Pure Wafer" or "the Company") Interim Results for 6 months ended 31 December 2008
Pure Wafer, 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 interim results for the 6 months to 31 December 2008.
Stephen Boyd, Chairman, Pure Wafer, commented,
"Since the end of this half year the recession has significantly accelerated the decline of the semiconductor market and for our services in reclaiming wafers."
ENQUIRIES
Pure Wafer plc (www.purewafer.com) Tel. +44 (0) 1792 311 200 Peter Harrington, Chief Executive
PURE WAFER PLC ("Pure Wafer" or "the Company") Interim Results for 6 months ended 31 December 2008 Chairman's Statement
Background
The Board today announces its interim results of the six months to 31 December 2008. The Board has also today announced an agreement to restructure its existing debt facilities, provide new working capital facilities and raise up to £2.3 million (before expenses) by way of a Placing and Open Offer. The new facilities are conditional upon shareholder approval for the Placing, further details of which are set out in a document posted to shareholders today.
Introduction
The severe downturn in the semiconductor industry, coupled with the worldwide economic recession has severely affected Pure Wafer's trading during the interim period to 31 December 2008, continuing up to the end of the year ended 30 June 2009, evidenced by a particularly sharp decline in trade volume during the second and third quarters of that financial year. Since then the Board is pleased to announce that, during the recent months, the Company has experienced a greater stability in trading coupled with some signs of recovery.
Operational
During the six months ended 31 December 2008, and subsequent period of difficult trading conditions, the Company concentrated on reducing its cost base. The Board has undertaken significant operational restructuring processes which has significantly reduced the production costs per wafer and thus enhanced the competitiveness of the Group's products over the last year. Further successful, engineering led cost reduction activities have enabled the Group to reduce the consumable costs per wafer and certain fixed costs, all without affecting the quality of the Group's product offering.
New products
The Company continues to actively look into new products and technologies that will be a synergistic fit to the current product portfolio, as part of its long-term strategy.
Management
Following the resignation of the Company's interim group financial officer, Stephen Young, the Board is pleased to announce the appointment of Timothy Lowe as Group Finance Director, and as a member of the Company's Board with immediate effect.
Tim qualified as a chartered accountant in 1988 with Touche Ross, and then joined their management consultantcy division where he remained until 1991. After this Tim joined Resource Ltd as Finance Director before moving to become Group Finance Director of PKL Holdings plc (an AIM listed company) in 2003. In 2005, Tim was appointed Group Finance Director of Stradform Limited where in 2008 he led the negotiations which resulted in the sale of the business to one of the largest contractors in Europe, before agreeing to join Pure Wafer as Group Finance Director.
Stephen Boyd replaced Eurfyl ap Gwilym as Chairman of the group on 1 February 2009. I would like to thank all of our staff for their hard work during the period.
Stephen Boyd Chairman 21 August 2009
PURE WAFER PLC Interim Results for 6 months ended 31 December 2008 Consolidated Income Statement
|
6 months ended 31 December 2008 |
6 months ended 31 December 2007 |
Year ended 30 June 2008 |
|
|
Notes |
£'000 |
£'000 |
£'000 |
|
Revenue |
10,248 |
12,156 |
22,268 |
|
Cost of sales |
(7,528) |
(7,667) |
(16,088) |
|
|
|
|
|
|
Gross profit |
2,720 |
4,489 |
6,180 |
|
Depreciation and Amortisation |
(1,696) |
(1,409) |
(2,932) |
|
Share-based payments credit/(charge) |
- |
234 |
426 |
|
Refinancing costs |
(198) |
- |
- |
|
Bad Debts |
(464) |
- |
- |
|
Other administrative expenses |
(1,771) |
(1,844) |
(3,157) |
|
Total administrative expenses |
4,129 |
3,019 |
5,663 |
|
Restructuring costs |
- |
- |
(355) |
|
EBITDA |
287 |
2,879 |
3,094 |
|
Depreciation and Amortisation |
(1,696) |
(1,409) |
(2,932) |
|
Operating (loss)/profit |
(1,409) |
1,470 |
162 |
|
Investment revenue |
38 |
56 |
182 |
|
Finance costs |
(443) |
(290) |
(777) |
|
2 Other losses and gains |
(912) |
(277) |
(366) |
|
|
|
|
|
|
(Loss)/profit on ordinary activities before taxation |
(2,726) |
959 |
(799) |
|
|
|
|
|
|
Tax on (loss)/profit on ordinary activity |
- |
(288) |
(5,331) |
|
|
|
|
|
|
(Loss)/profit for the period |
(2,726) |
671 |
(6,130) |
|
|
|
|
|
|
3 (Loss)/earnings per share |
|||
|
Basic |
(10.3)p |
2.5p |
(23.1)p |
|
Diluted |
(10.3)p |
2.5p |
(23.1)p |
|
|
|
|
|
The results stated above arose entirely from continuing activities.
PURE WAFER PLC Interim Results for 6 months ended 31 December 2008 Consolidated Balance Sheet
|
31 December 2008 |
31 December 2007 |
30 June 2008 |
|
|
Notes |
£'000 |
£'000 |
£'000 |
|
Non-current assets |
|||
|
Property, plant and equipment |
31,021 |
24,265 |
24,254 |
|
Intangible assets |
161 |
163 |
146 |
|
Goodwill |
4,420 |
3,340 |
3,348 |
|
|
|
|
|
|
35,602 |
27,768 |
27,748 |
|
|
|
|
|
|
|
Current assets |
|||
|
Inventory |
3,635 |
3,829 |
3,311 |
|
Trade and other receivables |
3,768 |
6,038 |
5,177 |
|
Derivative financial instruments |
- |
- |
50 |
|
Deferred taxation asset |
- |
5,046 |
- |
|
Assets held for sale |
- |
- |
735 |
|
Cash and cash equivalents |
473 |
2,373 |
962 |
|
|
|
|
|
|
7,876 |
17,286 |
10,235 |
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
43,478 |
45,054 |
37,983 |
|
|
|
|
|
|
Current liabilities |
|||
|
Trade and other payables |
(4,222) |
(5,161) |
(3,541) |
|
Derivative financial instruments |
(821) |
(148) |
(150) |
|
Deferred consideration |
(1,290) |
- |
(943) |
|
Short-term borrowings |
(3,237) |
(3,576) |
(3,894) |
|
|
|
|
|
|
(9,570) |
(8,885) |
(8,528) |
|
|
|
|
|
|
|
Non-current liabilities |
|||
|
Long-term borrowings |
(7,945) |
(6,403) |
(6,912) |
|
Deferred income |
(2,651) |
(2,037) |
(1,940) |
|
|
|
|
|
|
(10,596) |
(8,440) |
(8,852) |
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities |
(20,166) |
(17,325) |
(17,380) |
|
|
|
|
|
|
|
|
|
|
|
Net assets |
23,312 |
27,729 |
20,603 |
|
|
|
|
|
|
Equity |
|||
|
Share capital |
532 |
532 |
532 |
|
Share premium |
12,783 |
12,783 |
12,783 |
|
Merger reserve |
30,425 |
30,425 |
30,425 |
|
Retained earnings |
(24,229) |
(14,550) |
(21,503) |
|
Exchange translation reserve |
3,801 |
(1,461) |
(1,634) |
|
|
|
|
|
|
6 Total equity attributable to equity holders of the Company |
23,312 |
27,729 |
20,603 |
|
|
|
|
|
PURE WAFER PLC Interim Results for 6 months ended 31 December 2008 Consolidated Cash Flow Statement
|
6 months ended 31 December 2008 |
6 months ended 31 December 2007 |
Year ended 30 June 2008 |
|
|
Notes |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
4 Cash flows from operating activities |
1,703 |
2,000 |
1,733 |
|
|
|
|
|
|
Cash flows from investing activities |
|||
|
Net interest received |
38 |
56 |
182 |
|
Purchase of property, plant and equipment |
(863) |
(2,824) |
(4,964) |
|
Acquisition of subsidiaries - deferred consideration |
- |
- |
(857) |
|
|
|
|
|
|
Net cash used in investing activities |
(825) |
(2,768) |
(5,639) |
|
|
|
|
|
|
Cash flows from financing activities |
|||
|
Interest paid |
(443) |
(230) |
(777) |
|
Repayment of bank loans |
(611) |
- |
(1,002) |
|
Sale of Fixed Asset |
749 |
- |
- |
|
Repayment of obligations under finance leases |
(2,057) |
- |
(1,645) |
|
Increase in borrowings |
- |
368 |
5,547 |
|
|
|
|
|
|
Net cash generated from financing activities |
(2,362) |
138 |
2,123 |
|
|
|
|
|
|
5 Decrease in cash and cash equivalents |
(1,484) |
(630) |
(1,783) |
|
|
|
|
|
Consolidated Statement of Recognised Income and Expense
|
6 months ended 31 December 2008 |
6 months ended 31 December 2007 |
Year ended 30 June 2008 |
|
|
Notes |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
Exchange movements |
5,435 |
313 |
140 |
|
|
|
|
|
|
Net income recognised directly in equity |
5,435 |
313 |
140 |
|
(Loss)/profit for the period |
(2,726) |
671 |
(6,130) |
|
|
|
|
|
|
Total recognised income and expense for the period attributable to equity holders of the Company |
2,709 |
984 |
(5,990) |
|
|
|
|
|
PURE WAFER PLC Interim Results for 6 months ended 31 December 2008 Notes
1. Basis of preparation
The information for the 6 months ended 31 December 2008 does not constitute statutory accounts as defined in section 240 of the Companies Act 1985. A copy of the statutory accounts for the year ended 30 June 2008 been delivered to the Registrar of Companies, upon which an unqualified audit report was given. The audit did draw attention to the going concern basis applied in the preparation of the financial statements and further detail on this is given below.
The annual financial statements of Pure Wafer plc are prepared in accordance with IFRS as adopted by the European Union. These interim results are prepared on the basis of the accounting policies which the Company will use in preparation of the financial statements for the year ended 30 June 2009. There are no changes from the policies disclosed in the 2008 financial statements.
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 at the start of the interim report. The Directors have assessed the balance sheet and likely future cash flows of the Company and Group at the date of signing the audit report and on this basis have concluded that it is appropriate to prepare the interim results on a going concern basis.
As described in the Chairman's Statement, the current environment is challenging. The Company has recorded a pre-tax loss and has relied on waivers of loan covenant tests at 31 December 2008 and subsequently in order to stay in line with banking facility arrangements. A short term overdraft facility has also been agreed.
The Company is currently in the final stages of a process to raise additional funds announced today which is expected to generate a minimum of £2.37 million of working capital facilities through a combination of bank loans and new equity. The overall restructuring is dependent on Shareholder approval to be obtained via a General Meeting on 14 September and full details of this are explained in the Document to be distributed to Shareholders on 21 August 2009.
The Directors have considered the Company's performance to date and reviewed the cashflow forecasts for the forthcoming period. The challenging conditions in the semiconductor market make the timing of the recovery difficult to predict. Although cash will need to be tightly controlled, the Directors believe the new facilities will be sufficient for the business to continue trading for the foreseeable future. In forming the conclusion about the going concern basis, the Directors have considered all the forgoing information.
The Directors have concluded that the combination of circumstances represents a material uncertainty that casts doubt upon the Group's and Company's ability to continue as a going concern. Nevertheless, after making enquiries, and considering the uncertainties described above, 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 these reasons, they continue to adopt the going concern basis in preparing the annual report and financial statements.
Comparatives
The comparatives for the 6 months ended 31 December 2007 have been reclassified to be consistent with the presentation of the June 2008 accounts. The following changes have been made:
- £625,000 gross up of sales and cost of sales to reflect the sale of wafers, which had previously been recorded as a net figure; and
- Share based payment credit of £234,000 has been moved from other losses and gains to administration expenses.
2. Reconciliation of other gains and losses
|
6 months ended 31 December 2008 |
6 months ended 31 December 2007 |
Year ended 30 June 2008 |
|
|
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
Foreign exchange loss |
(351) |
(127) |
(171) |
|
Loss on derivatives |
(561) |
(150) |
(195) |
|
|
|
|
|
|
Other losses and gains |
(912) |
(277) |
(366) |
|
|
|
|
|
3. 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:
|
6 months ended 31 December 2008 |
6 months ended 31 December 2007 |
Year ended 30 June 2008 |
|
|
'000 |
'000 |
'000 |
|
|
|
|
|
|
|
Weighted average number of ordinary shares: |
|||
|
- In issue during the period |
26,591 |
26,591 |
26,591 |
|
- Fully diluted |
26,591 |
27,171 |
26,591 |
|
|
|
|
|
|
Unadjusted earnings |
£(2,726) |
£671 |
£(6,130) |
|
Earnings per share |
6 months ended 31 December 2008 |
6 months ended 31 December 2007 |
Year ended 30 June 2008 |
|
Basic |
(10.3)p |
2.52p |
(23.1)p |
|
Basic diluted |
(10.3)p |
2.47p |
(23.1)p |
4. Cash flows from operating activities
|
6 months ended 31 December 2008 |
6 months ended 31 December 2007 |
Year ended 30 June 2008 |
|
|
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
Profit/(Loss) for the period |
(2,726) |
671 |
(6,130) |
|
Taxation |
- |
288 |
5,331 |
|
Finance expense |
443 |
290 |
777 |
|
Finance income |
(38) |
(56) |
(182) |
|
Other non-cash gains and losses |
561 |
43 |
(386) |
|
Non-monetary foreign exchange translation |
- |
- |
(322) |
|
Depreciation and amortisation |
1,696 |
1,295 |
2,932 |
|
|
|
|
|
|
Operating cash flows before movements in working capital |
(64) |
2,531 |
2,020 |
|
|
|
|
|
|
Increase in inventories |
(324) |
(1,017) |
(499) |
|
Decrease/(increase) in trade and other receivables |
(1,409) |
778 |
2,261 |
|
Increase/(decrease) in trade and other payables |
682 |
(292) |
(2,049) |
|
|
|
|
|
|
Movement in working capital |
1,767 |
(531) |
(287) |
|
|
|
|
|
|
Cash flows from operating activities |
1,703 |
2,000 |
1,733 |
|
|
|
|
|
5. Reconciliation and analysis of net debt and cash flows
|
Cash |
Deferred consideration |
Other borrowings |
Total net debt |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
As at 1 July 2008 |
962 |
(943) |
(10,806) |
(10,787) |
|
Cash flow |
(1,484) |
- |
2,668 |
1,184 |
|
Non-cash flow and foreign exchange |
995 |
(347) |
(3,044) |
(2,396) |
|
|
|
|
|
|
|
As at 31 December 2008 |
473 |
(1,290) |
(11,182) |
(11,999) |
|
|
|
|
|
|
6. Changes in equity
|
Share capital |
Share premium |
Merger reserve |
Exchange translation |
Retained earnings |
Total |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
|
|
|
|
|
|
|
|
|
|
As at 1 July 2008 |
532 |
12,783 |
30,425 |
(1,634) |
(21,503) |
20,603 |
|
Exchange movements |
- |
- |
- |
5,435 |
- |
5,435 |
|
Profit for the period |
- |
- |
- |
- |
(2,726) |
(2,726) |
|
|
|
|
|
|
|
|
|
As at 31 December 2008 |
532 |
12,783 |
30,425 |
3,801 |
(24,229) |
23,312 |
|
|
|
|
|
|
|
|
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.
Related Shares:
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