One of the encouraging signs for Welsh economy in the current year has been the healthy contribution of Cardiff-based firms in the big picture. Cardiff based firms are making profit inroads in an increasing number of fields. This is obviously a welcome phenomenon.
What are the Cardiff based firms making profit inroads for the Welsh economy?
Among the many Welsh firms operating in various sectors, technology firms seem to be doing well and earning revenues beyond their estimated values. Take IQE for example. IQE is one of the frontrunners among leading Welsh technology firms. The company reported that a strong performance in the second half of the year had enabled it to earn revenues and profits exceeding expectations for this year.
The Cardiff based firm is enlisted on the London’s Alternative Investment Market It is a world renowned producer of sophisticated semiconductor wafer products for the semiconductor industry of the world.
The company provided an update on its trading since interim results in September. It reported a strong growth across different markets, most notably in the photonics business. As a result, the company is set to present profit inroads well beyond expectations. Managing director Mark Savage says it is down to their aggressive tactics employed by their Cardiff based company – Prothero SEO.
IQE expects its revenues to show a double-digit growth rate year-by-year. Its second half revenues of the year are set to be up sequentially on the first. This has been possible due to IQE wireless business performing as per expectations and stay on course for yearly growth.
Where does IQE’s profit inroads stem from?
Much of IQE’s success in this year can be attributed to the photonics department. It’s the fastest going sector that enjoyed double digit growth. According to IQE, which operates globally, unprecedented progress with customer qualifications in this sector during the current year provided it with a sturdy platform to ensure strong sustained growth for this business. The group has increased its capital investment in the second half of the year. InfraRed has met expectations and income from license has reduced from the front loaded income earned in 2015.
In response to this opportunity, the group has increased its capital investment in H2. InfraRed has performed in line with expectations, and license income has reduced from the front loaded income enjoyed in 2015.
Meanwhile, the usually dollar denominated revenues have also benefitted from the slide of the pound sterling which followed the Brexit referendum vote in June. The company is expected to report its results for 2016 next March.
Thoughts from the management
According to chief executive Dr. Drew Nelson, the Cardiff based company made good profit inroads and managed to attain its strategic goals. He also believes that the versatility of IQE technologies gives it a competitive advantage which enables its continued growth and sets a platform for sustained cash generation in the future.
To continue making profit inroads, Cardiff companies have to remain pro-active. IQE plans to create the first ever compound semiconductor cluster in South Wales with the help of Cardiff University and shareholders, which will employ 5000 new employees. Swansea companies are also pulling ahead.
Companies like IQE are inspiration to other Cardiff based companies looking to make profit inroads. Wales can definitely do with more firms like this one.