Pure Wafer, a company that provides silicon wafer reclaim services, has announced its first full year profit.

At its reclaim facility in Swansea, Pure Wafer specialises in the re-processing of used silicon test wafers - thin slices of semi-conducting material, such as a silicon crystal, upon which microcircuits can be built - allowing semiconductor manufacturers to gain further efficiencies as a part of cost control initiatives within their production processes.

The company reported a rise in revenues of 58 % to £14.52m for the year to June, turning around losses of £0.14m to pre-tax profits of £2.04, thanks to a 79% increase in 300mm wafer reclaim services.

Around 25% of semiconductor manufacturers globally now use the cheaper 300mm wafer (as opposed to the 200mm), expected to rise to 50% within the next three to four years. As this occurs, new 300mm capable fabrication plants are expected to emerge; growth in the market on which Pure Wafer hopes to capitalise.

The company has recently doubled its capacity to process such wafers and intends to do the same again in the coming year, focusing on this growth area in which it already boasts an established position.

House broker Numis Securities upgraded its recommendation to ‘buy’ on the back of the group's continued strong growth, but did point out that as ‘almost all revenues are dollar-denominated and almost all costs are in sterling’, the weaker US dollar may have a negative impact.

Profits of £3.6m look achievable this year on sales of £20.1m, giving earnings of 13.4p, rising to 20.7p in 2008. At the current 240p, Pure Wafer trades on forward multiples of 17.9 and 11.6. The shares look appealing. Buy.