IQE refutes Shadowfall allegations, sees revenue ahead of market expectations
Source - SMW
IQE reiterated that it expects full year revenue to be ahead of market expectations and said allegations contained in the Capital & Research Shadowfall report provided a 'misleading' analysis of the company's financial position.
'ShadowFall made no attempt to review its report with IQE prior to its publication,' IQE said. IQE addressed key themes of the report including the purpose of its joint ventures in Singapore and Cardiff.
'The joint ventures in Singapore and Cardiff form an important part of IQE's strategy to be at the leading edge of compound semiconductor innovation,' IQE said. 'IQE's trade with these joint ventures is clearly reported in the notes to its annual reports and financial statements.'
'The nature of this trade is IQE sub-contracting certain external customer contracts through these joint ventures. By acting as an anchor customer, IQE is providing the joint ventures with initial business to limit their start up losses in their early years of operation.'
'These joint ventures have independent third-party shareholders and are governed by standalone boards, separate management teams and joint venture agreements that establish governance procedures and decision making.'
'As a member of the joint ventures, IQE participates in these boards, but does not have control. These joint ventures are independently audited.'
IQE also said that the license income from joint ventures has been reported in detail in regulatory announcements as well as in its annual reports and financial statements. In its most recent trading update, IQE said it highlighted license income from joint ventures will be less than £2 million in 2017.
IQE reiterated that it expects full year revenue to be ahead of market expectations, and to be not less than £150 million for the year ending 31 December 2017 amid strong wafer sales which remained on track to deliver strong double-digit growth in 2017. While annual growth in Photonics is also expected to achieve triple-digit growth.
At 8:50am: (LON:IQE) IQE PLC share price was -0.5p at 103.9p