Trading Update & Proposed Maiden Dividend

 PURE WAFER PLC

(AIM: PUR)

Trading Update

31 July 2014

Pure Wafer plc ("Pure Wafer" or "the Company"), one of the leading global providers of high quality silicon wafer reclaim services to many of the world's largest semiconductor manufacturers and foundries as an integral part of their cost control programmes, is pleased to provide the following update on current trading in advance of the announcement of the Company's preliminary results for the year ended 30 June 2014, which are expected to be released during the week commencing 6 October 2014.

Trading Update

The year to 30 June 2014 has been a significant one for Pure Wafer. As the semiconductor market has continued its growth, we have cemented our position as one of the world's leading providers of specialist services to the global wafer reclaim market. Continued and sustained strong cash generation has enabled Pure Wafer to invest in additional capacity and technology advancements to maintain our industry leading customer service and has positioned us for the payment of a maiden dividend.

We are pleased to report that underlying profits for the year are in line with market expectations. The impact of exchange rate movements has been mitigated to some extent by the Company's forward currency purchasing policy. The strength of sterling resulted in an increased sterling denominated cost base of approximately $0.2m in the year.

In addition we are pleased to report that, through increased customer engagement and a high level of customer satisfaction, the pricing pressure reported in our update in January driven by adverse USD/YEN movements, has now stabilised. Furthermore, tight cost control, operational restructuring, and an improvement in process yields have helped to ensure no material impact on profitability.

Strong cash generation has enabled the Company to close the year in a net cash position whilst, at the same time, servicing debt and investing $3.7m in capital expenditure relating to capacity increase and technological advancement.

The global semiconductor market is forecast to continue to grow for the remainder of 2014 and beyond. With both manufacturing sites running at high levels of productivity and overall levels of costs being tightly managed, these factors support our confidence in the long term profitability of the business.

Dividend

The Board is pleased to confirm that, in the absence of unforeseen circumstances, it intends to recommend the payment of a maiden final dividend to ordinary shareholders based on the results for the year ended 30 June 2014.

Our Markets

Industry analysts are forecasting continued growth through to 2017 and beyond, driven by internet-capable converging technologies and demand for mobile electronic devices. In particular demand continues to surge for tablet PCs and smartphones, which is expected to continue as global economies recover. Internet capable digital TV's have replaced 3D as the must have technology in 2014 and home appliances are being designed to interact via the internet. The "Internet of Things" is gaining momentum with no slowdown in sight.

Confidence in this sustainable growth means that our customers continue to invest heavily in additional capacity and technology advancements, which gives rise to further wafer reclaim opportunities for us.

Our Operations

With high levels of utilisation at both the Swansea and Prescott facilities, and the market forecast to grow for the foreseeable future, a programme for increasing 300mm capacity by up to 40% was implemented during the current year. We are pleased to report that this increased capacity is now fully on line and available to meet future growth in demand. During the year the Company also invested in state-of-the-art measuring equipment to ensure that Pure Wafer remains at the forefront of technology in line with customers' exacting expectations.

With our lower cost of manufacture and recently installed increased capacity, Pure Wafer is well placed to take advantage of the forecast long term growth in the industry.

Board Changes

The Board is pleased to confirm that the changes announced on 20 March 2014 have become effective as of 1 July 2014. Peter Harrington has taken the position of Non-Executive Chairman, Richard Howells has become Chief Executive Officer and Huw Lewis has assumed the role of Chief Financial Officer. Stephen Boyd remains a non-executive director.

Commenting on the Board Changes, Chairman Peter Harrington said:

"With a dynamic and youthful management team the Company is set for the next phase of its growth. The Board has implemented a controlled and well executed strategy of succession planning, which has reinvigorated the Company without losing any of the experience and knowledge gained within the semiconductor industry."

Notes to Editors:

Global market demand for semi-conductors is rising and with it the demand for "test wafers". Semi-conductor/silicon chips are manufactured on silicon wafers in highly advanced, specialist fabrication facilities. Such facilities, which require huge capital investment, use large quantities of "test" wafers for the purpose of testing, maintenance and calibration of semi-conductor manufacturing equipment. Wafer reclaim is an essential and highly specialised industrial process enabling the multiple re-use of these silicon test wafers.

Pure Wafer plc is one of the world's leading providers of these wafer reclaim services. They enable semi-conductor manufacturers to gain further efficiencies through the increased re-use of silicon test wafers which are an integral part of the extremely demanding and technically advanced production process.

Pure Wafer operates from two "State-of-the-Art" manufacturing facilities, in Swansea, South Wales and Prescott, Arizona, USA and following a period of consolidation within the industry, is now the leading European and US provider of 300mm wafer reclaim services.

Pure Wafer has an established track record, technological expertise and one of the world's most advanced wafer reclaim facilities. It has a "blue-chip" customer base that includes most of the world's largest semi-conductor manufacturers and independent foundries. It has longstanding relationships with its customers and works closely with them to design and develop a service that delivers reclaimed wafers to exact specification.