Guided by chief executive Keith Baker, an experienced semiconductor industry man, Pure Wafer provides silicon wafer reclaim services to major semiconductor manufacturers as a key part of their cost control programmes.

The Swansea-based group’s services drive efficiencies through the increased reuse of silicon test wafers within production processes, a compelling sell in good times and bad. Furthermore, the company is the leading 300mm wafer reclaim player outside Japan, and blue-chip clients are transitioning at pace from 200mm wafers to larger 300mm – great news given the number of 300mm fabrication facilities outside Japan is set to double by the end of 2008. Pure Wafer has been upping the capacity ante in expectation that burgeoning 300mm production levels will drive further reclaim demand.

Results to June, issued last September, revealed a first annual profit for Pure Wafer in only its second set of full-year numbers on AIM. Turnover rose 58% to £14.5m, and losses of £140,000 were converted to pre-tax profits of more than £2m. A net cash inflow from operations of £2.68m was announced, versus a small outflow for 2005, and second-half PBT weighed in 91% higher than the first at £1.34m. This year, a jump in profits to £3.6m achieved from £20.1m sales looks likely, giving earnings of 13.4p and a forward multiple of 18.2.

Growth Company Investor believes that rating is too low, given the 76% earnings per share growth forecast for the current year, and the value-looking PEG ratio of only 0.24. One significant bear point looms though in the shape of the US dollar. Sales are almost exclusively denominated in dollars while costs are predominately taken in sterling, leaving the group highly sensitive to dollar weakness. Regardless, Pure Wafer looks an intelligent investment offering investors exposure to strong growth.