TIDMCML
RNS Number : 5972N
CML Microsystems PLC
15 June 2010
CML MICROSYSTEMS Plc
PRELIMINARY RESULTS
CML Microsystems Plc ("CML"), which designs, manufactures and markets a broad
range of semiconductors, primarily for global communication and data storage
markets, announces its Preliminary Results for the year ended 31 March 2010.
Commenting on the results, George Gurry, Chairman of CML, said:
"I am pleased to report an improved financial performance given the difficult
trading conditions that were present through a large part of the year. The
Interim Statement during November 2009 commented on my belief that actions being
taken would further our aims for a return to profitability and I can report the
Group traded positively during the second half."
Financial Highlights:
· Revenue up 12.0% to GBP18.02m (2009: GBP16.09m)
· Gross profit up 22.5% to GBP12.49m (2009: GBP10.2m)
· Profit before tax of GBP21,000 (2009: Loss of GBP1.78m)
· Loss per share of 0.16p (2009: Loss of 14.29p)
· Net cash inflow of GBP1.78m (2009: outflow GBP0.69m)
· Cash reserves at 31 March 2010 of GBP3.88m
· Net debt position reduced to GBP2.09m (2009: GBP3.78m)
· No dividend
Operational highlights:
· Wireless: (41% of revenues) - up 3%, FirmASIC products gained traction, RF
portfolio expanded.
· Storage: (40% of revenues) - up 40%, reduced customer dependency, new
design wins to widen applications.
· Telecom: (13% of revenues) - fractionally down, opportunities to take
market share from competition.
Regarding outlook, Chris Gurry, Managing Director of CML, said:
"The healthier visibility reported in the IMS of 16 February 2010 has continued
beyond the year end and it is hoped that recent trading conditions can be
maintained and built upon in the course of the current financial year. Our focus
for FY2011 is to maintain operating costs in the region of existing levels,
leverage the ongoing investment in new product developments and continue to grow
our customer base in pursuit of sustainable growth in revenue and a return to
annual profitability."
Enquiries:
+-------------------------------+-----------------------------+
| CML Microsystems plc | www.cmlmicroplc.com |
+-------------------------------+-----------------------------+
| Nigel Clark, Financial | Tel: 01621 875 500 |
| Director | |
+-------------------------------+-----------------------------+
| Chris Gurry, Managing | |
| Director | |
+-------------------------------+-----------------------------+
| | |
+-------------------------------+-----------------------------+
| Cenkos Securities plc | |
+-------------------------------+-----------------------------+
| Jeremy Warner Allen (Sales) | Tel: 020 7397 8900 |
+-------------------------------+-----------------------------+
| Stephen Keys (Corporate | |
| Finance) | |
+-------------------------------+-----------------------------+
| | |
+-------------------------------+-----------------------------+
| Walbrook PR Ltd | Tel: 020 7933 8780 |
+-------------------------------+-----------------------------+
| Paul McManus | Mob: 07980 541 893 |
| | paul.mcmanus@walbrookpr.com |
+-------------------------------+-----------------------------+
Chairman's Statement
I am pleased to report an improved financial performance given the difficult
trading conditions that were present through a large part of the year. The
Interim Statement during November 2009 commented on my belief that actions being
taken would further our aims for a return to profitability and I can report the
Group traded positively during the second half.
Revenue rose by 12% to GBP18.02m. Tight control of expenses and healthier
margins enabled the Group to post a profit of GBP21k at the operating level
(prior to share based payments, finance costs and taxation), which compares to a
loss of GBP1.77m for the previous year.
The Group generated over GBP1.7m of cash and the reported loss per ordinary
share is 0.16p (2009: 14.29p loss per share).
Prior to 2008, the Company declared payment of a dividend in each of the 24
years it traded as a public company. Despite the pleasing second half
performance your Directors consider that the priority is to reduce Group debt
through improved trading and conclude that payment of a dividend would not be an
appropriate use of resources at this present time.
The directors therefore do not recommend payment of a dividend for the year
ending 31 March 2010.
Within the financial statements, other operating income relates predominantly to
UK freehold commercial properties that the Group owns and leases to third
parties. The Board continued to devote appropriate resources to realising
capital value from these assets although no transactions occurred during the
year under review.
As reported in a statement released 29 March 2010, the Board is proposing to
adopt a standard listing under the FSA's revised listing rules and a circular
will be sent to shareholders later this month.
Prospects
The Company has experienced one of the most turbulent multi-year periods in its
long history. During this time we have improved gross margins, streamlined the
cost base, and strategically expanded our addressable market area while
continually investing in the key product development programs that will help
drive our future growth. As a result of the ongoing commitment and contribution
from our global employee base, the Company is well placed to capitalise on the
opportunities ahead. On behalf of the Board I would like to thank them for the
vital role they play.
Subject to unforeseen circumstances, I have confidence that we will see a
present full year return to profitability.
GW Gurry
Chairman
14th June 2010
Operating and Financial Review
OVERVIEW
Throughout the year to 31March 2010 we continued the drive towards our ultimate
objective for sustainable business growth.
We increased revenues in our major target markets by continuing to define,
develop and deliver high-quality, innovative semiconductor solutions to our
customers, enabling them to produce world-class products for global
communications and data storage applications. We increased our customer base
and the size of our total addressable markets by releasing a number of new
devices offering compelling solutions to real world commercial and technical
issues.
Trading for the full year to 31 March 2010 comprised two materially different
six-month periods. The weak market environment to 30 September 2009 subsequently
translated into a firmer second half performance enabling the business to
recover a substantial amount of the losses that were reported at the interims.
By the year-end, market conditions within certain segments had reached an
improved level and order book visibility extended beyond the prevailing four to
six week timeframe.
Throughout the period, we continued with forward-looking new product development
expenditure whilst maintaining focus on the cost efficiencies initiated over the
prior two years.
FINANCIAL RESULTS
Group revenues for the year ended 31 March 2010 were GBP18.02m representing an
increase of 12% over the prior year (2009: GBP16.09m). This increase reflected
marginal percentage growth in the value of semiconductors shipped into the
Group's largest market segment, wireless, coupled with stronger unit shipment
growth from the storage segment. The strengthening of the US dollar against
sterling positively assisted reported sales levels.
Gross profit for the year was GBP12.49m (2009: GBP10.2m), an increase of 22%.
The overall gross margin improved to 69% (2009: 63%) as a combined result of
product mix and cost efficiencies initiated during the prior year.
Distribution and administration costs increased to GBP13.03m (2009: GBP12.47m)
predominantly due to a loss on foreign exchange being recorded of GBP318k
against a prior year profit of GBP1m. One inter group loan accounted for a large
proportion of the year on year swing and, prior to the year end, currency
exposure was removed by placing the loan with the operating company to which it
relates and denominating it in the local currency.
Net finance costs increased to GBP303k (2009: GBP218k) as a result of lower
interest income and higher pension finance costs.
The higher revenue level and improved gross margin narrowed the reported loss
before tax to GBP386k (2009: GBP2.09m loss).
Net cash inflow for the year was GBP1.78m (2009: outflow GBP0.69m) resulting in
cash reserves of GBP3.88m at 31 March 2010. The Group's net debt position was
GBP2.09m (2009: GBP3.87m).
Inventory levels increased slightly to GBP1.49m (2009: GBP1.37m) in response to
improved sales levels whilst capital expenditure remained negligible at GBP49k
(2009: GBP66k).
Overall, the Company received a net tax refund of GBP237k, principally due to
R&D tax credits from an ongoing extensive engineering program.
Development expenses fell to GBP2.82m (2009: GBP3.97m) following a headcount
reduction during the previous financial year and lower development costs
associated with certain proprietary software configurable silicon platforms. A
number of customer-specific programs complemented a healthy level of standard
new product introductions and development activities.
The effect on the income statement of accounting for pensions under
international accounting standards (as opposed to cash accounting) was to
decrease the administration costs by GBP105k (2009: increase of GBP391k) and to
increase the finance costs by GBP117k (2009: income of GBP72k). Net assets fell
to GBP12.12m (2009: GBP14.79m) mainly due to a pension fund liability increase
that grew to GBP5.73m (2009: GBP1.99m) despite a GBP2.2m improvement in the
value of the plan assets. This increase in liability is a result of significant
changes in the principal actuarial assumptions used. The scheme has been closed
to new entrants for a number of years and was closed in respect of future
accruals to existing members on 31 March 2009.
MARKETS REVIEW
Wireless
During the year under review, the Group developed and marketed semiconductor
devices performing a range of functions within customer end products that serve
sub-segments of the overall wireless communications market. These customer
products include voice-centric professional, business and leisure two-way radios
along with data-only paging, marine safety (AIS) and narrowband wireless
equipment. Our customer base was global and included a number of military
accounts.
Sales revenue from the wireless segment overall was marginally up against the
prior year with the largest contributing territories being the Far East and
Europe. Notable gains were recorded from our proprietary FirmASIC technology and
we continued to take market share in the large and mature analogue two way radio
market whilst simultaneously positioning ourselves to be a leading technology
supplier for the newer digital radio standards as they emerge.
The early stage RF product portfolio expanded to include quadrature modulator,
transceiver and direct conversion products and we continued to build a good
reputation in this key market area.
Storage
Within the storage market, the prominent applications for our semiconductors
were inclusion within removable memory cards and solid-state drive products in
varying form factors. Customer products containing our IC's were typically used
as an alternative to rotating hard disk media in commercial and industrial
application areas that demand high-reliability under arduous operating
conditions.
Volume and revenue growth in this segment was particularly strong and came from
a combination of existing and new customers. Advances were recorded in all major
regions although geographically, the majority of revenue came from customers
headquartered in the USA.
The Company achieved a number of design-wins inside customer products aimed at
emerging opportunities for secure storage cards within the mobile financial
services sector and content protection facilities for the software industry.
New product development resources were directed at standard products that will
expand our total addressable market and were complemented by a number of
customer-specific programs expected to start generating meaningful revenues over
the next twelve to eighteen months.
Telecom
Unit shipments into the telecom segment were flat year on year and did not
follow the Group's overall trading pattern of a stronger second half. We saw
encouraging signs that the newer devices within the product range were starting
to create momentum at the expense of the legacy product portfolio although
visibility within this market area remained variable.
Customers located in Europe and the Far East comprised the majority of revenues
from this segment. Applications were numerous and included industrial wireline
communication modules, commercial alarm panels, telephone exchanges and dial-up
modems for the healthcare industry.
Equipment
The Group's non-semiconductor division, RDT, suffered a reduction in revenues to
GBP722k (2009: GBP979k) as a result of the economic conditions in the UK
delaying the placement of commercial orders for CCTV transmission equipment.
The market showed early signs of improvement just prior to the financial year
end although forward order book visibility remained at low levels through the
period end.
New product developments were focussed on expanding the addressable sub market
application areas for wireless video systems and data transmission products.
Sales recorded from the wireless and storage segments accounted for 80% of Group
revenues. Overall, no single customer accounted for more than 10% of Group
revenues and only two customers accounted for more than 5%.
SUMMARY AND OUTLOOK
Notwithstanding the recording of a trading loss, the year under review resulted
in a better outcome than expected at the midway point and a significant
sequential improvement. The effects of global economic events on our markets
improved during the second half and, coupled with a lower cost base and higher
gross margin, the Company made satisfactory progress.
The healthier visibility reported in the IMS of 16 February 2010 has continued
beyond the year end and it is hoped that recent trading conditions can be
maintained and built upon in the course of the current financial year. Our focus
for FY2011 is to maintain operating costs in the region of existing levels,
leverage the ongoing investment in new product developments and continue to grow
our customer base in pursuit of sustainable growth in revenue and a return to
annual profitability.
In closing I would like to echo the Chairman's comments and thank each and every
one of our employees for their loyal support and vital contribution to the
future success of the Company.
C.A. Gurry
Managing Director
CML Microsystems Plc
Condensed Consolidated Income Statement
+-------------------------------------+--------------+--+--------------+
| | Unaudited | | Audited |
+-------------------------------------+--------------+--+--------------+
| | Year End | | Year End |
| Continuing operations | 31 March | | 31 March |
| | 2010 | | 2009 |
+-------------------------------------+--------------+--+--------------+
| | GBP'000 | | GBP'000 |
+-------------------------------------+--------------+--+--------------+
| | | | |
+-------------------------------------+--------------+--+--------------+
| Revenue | 18,023 | | 16,089 |
+-------------------------------------+--------------+--+--------------+
| Cost of sales | (5,533) | | (5,887) |
+-------------------------------------+--------------+--+--------------+
| Gross Profit | 12,490 | | 10,202 |
+-------------------------------------+--------------+--+--------------+
| | | | |
+-------------------------------------+--------------+--+--------------+
| Distribution and administration | (13,032) | | (12,466) |
| costs | | | |
+-------------------------------------+--------------+--+--------------+
| | (542) | | (2,264) |
+-------------------------------------+--------------+--+--------------+
| | | | |
+-------------------------------------+--------------+--+--------------+
| Other operating income | 563 | | 489 |
+-------------------------------------+--------------+--+--------------+
| Profit/(loss) before share based | 21 | | (1,775) |
| payments | | | |
+-------------------------------------+--------------+--+--------------+
| | | | |
+-------------------------------------+--------------+--+--------------+
| Share based payments | (104) | | (101) |
+-------------------------------------+--------------+--+--------------+
| Loss after share based payments | (83) | | (1,876) |
+-------------------------------------+--------------+--+--------------+
| | | | |
+-------------------------------------+--------------+--+--------------+
| Revaluation of investment | - | | 5 |
| properties | | | |
+-------------------------------------+--------------+--+--------------+
| Finance costs | (307) | | (333) |
+-------------------------------------+--------------+--+--------------+
| Finance income | 4 | | 115 |
+-------------------------------------+--------------+--+--------------+
| Loss before taxation | (386) | | (2,089) |
+-------------------------------------+--------------+--+--------------+
| | | | |
+-------------------------------------+--------------+--+--------------+
| Income tax credit/(expense) | 363 | | (47) |
+-------------------------------------+--------------+--+--------------+
| | | | |
+-------------------------------------+--------------+--+--------------+
| Loss after taxation attributable to | | | |
| equity owners of the Parent | (23) | | (2,136) |
+-------------------------------------+--------------+--+--------------+
| | | | |
+-------------------------------------+--------------+--+--------------+
| Loss per share | | | |
+-------------------------------------+--------------+--+--------------+
| Basic | (0.16)p | | (14.29)p |
+-------------------------------------+--------------+--+--------------+
| Diluted | (0.16)p | | (14.29)p |
+-------------------------------------+--------------+--+--------------+
Condensed Consolidated Statement of Comprehensive Income
+-------------------------------------+--------------+--+--------------+
| | Unaudited | | Audited |
+-------------------------------------+--------------+--+--------------+
| | Year End | | Year End |
| | 31 March | | 31 March |
| | 2010 | | 2009 |
+-------------------------------------+--------------+--+--------------+
| | GBP'000 | | |
+-------------------------------------+--------------+--+--------------+
| | | | |
+-------------------------------------+--------------+--+--------------+
| Loss for the year | (23) | | (2,136) |
+-------------------------------------+--------------+--+--------------+
| Other comprehensive income: | | | |
+-------------------------------------+--------------+--+--------------+
| Foreign exchange differences | (69) | | 397 |
+-------------------------------------+--------------+--+--------------+
| Actuarial loss on retirement | (3,726) | | (1,671) |
| benefit obligations | | | |
+-------------------------------------+--------------+--+--------------+
| Income tax on actuarial loss | 1,043 | | 507 |
+-------------------------------------+--------------+--+--------------+
| Net loss for the year directly | | | |
| recognised in equity/other | (2,752) | | (767) |
| comprehensive income | | | |
+-------------------------------------+--------------+--+--------------+
| | | | |
+-------------------------------------+--------------+--+--------------+
| Total comprehensive income for the | (2,775) | | (2,903) |
| year | | | |
+-------------------------------------+--------------+--+--------------+
CML Microsystems Plc
Condensed Consolidated Statement of Financial Position
+-------------------------------------+--------------+--+--------------+
| | Unaudited | | Audited |
+-------------------------------------+--------------+--+--------------+
| | 31 March | | 31 March |
| | 2010 | | 2009 |
+-------------------------------------+--------------+--+--------------+
| | GBP'000 | | GBP'000 |
+-------------------------------------+--------------+--+--------------+
| Assets | | | |
+-------------------------------------+--------------+--+--------------+
| Non current assets | | | |
+-------------------------------------+--------------+--+--------------+
| Property, plant and equipment | 5,304 | | 5,931 |
+-------------------------------------+--------------+--+--------------+
| Investment properties | 3,850 | | 3,850 |
+-------------------------------------+--------------+--+--------------+
| Development costs | 4,189 | | 5,192 |
+-------------------------------------+--------------+--+--------------+
| Goodwill | 3,512 | | 3,512 |
+-------------------------------------+--------------+--+--------------+
| Deferred tax asset | 3,097 | | 2,019 |
+-------------------------------------+--------------+--+--------------+
| | 19,952 | | 20,504 |
+-------------------------------------+--------------+--+--------------+
| Current assets | | | |
+-------------------------------------+--------------+--+--------------+
| Inventories | 1,489 | | 1,366 |
+-------------------------------------+--------------+--+--------------+
| Trade receivables and prepayments | 2,802 | | 2,504 |
+-------------------------------------+--------------+--+--------------+
| Current tax assets | 142 | | 355 |
+-------------------------------------+--------------+--+--------------+
| Cash and cash equivalents | 3,883 | | 2,192 |
+-------------------------------------+--------------+--+--------------+
| | 8,316 | | 6,417 |
+-------------------------------------+--------------+--+--------------+
| Non current assets classified as | | | |
| held for | 441 | | 468 |
| sale - properties | | | |
+-------------------------------------+--------------+--+--------------+
| | | | |
+-------------------------------------+--------------+--+--------------+
| Total assets | 28,709 | | 27,389 |
+-------------------------------------+--------------+--+--------------+
| | | | |
+-------------------------------------+--------------+--+--------------+
| Liabilities | | | |
+-------------------------------------+--------------+--+--------------+
| Current liabilities | | | |
+-------------------------------------+--------------+--+--------------+
| Bank loans and overdrafts | 5,968 | | 6,062 |
+-------------------------------------+--------------+--+--------------+
| Trade and other payables | 2,680 | | 2,069 |
+-------------------------------------+--------------+--+--------------+
| Current tax liabilities | 38 | | 15 |
+-------------------------------------+--------------+--+--------------+
| | 8,686 | | 8,146 |
+-------------------------------------+--------------+--+--------------+
| | | | |
+-------------------------------------+--------------+--+--------------+
| Non current liabilities | | | |
+-------------------------------------+--------------+--+--------------+
| Deferred tax liabilities | 2,172 | | 2,459 |
+-------------------------------------+--------------+--+--------------+
| Retirement benefit obligation | 5,728 | | 1,990 |
+-------------------------------------+--------------+--+--------------+
| | 7,900 | | 4,449 |
+-------------------------------------+--------------+--+--------------+
| | | | |
+-------------------------------------+--------------+--+--------------+
| Total liabilities | 16,586 | | 12,595 |
+-------------------------------------+--------------+--+--------------+
| | | | |
+-------------------------------------+--------------+--+--------------+
| Net Assets | 12,123 | | 14,794 |
+-------------------------------------+--------------+--+--------------+
| | | | |
+-------------------------------------+--------------+--+--------------+
| Capital and reserves attributable | | | |
| to equity owners of the Parent | | | |
+-------------------------------------+--------------+--+--------------+
| Share capital | 747 | | 747 |
+-------------------------------------+--------------+--+--------------+
| Share premium | 4,148 | | 4,148 |
+-------------------------------------+--------------+--+--------------+
| Share based payments reserve | 255 | | 151 |
+-------------------------------------+--------------+--+--------------+
| Foreign exchange reserve | 374 | | 443 |
+-------------------------------------+--------------+--+--------------+
| Accumulated profits | 6,599 | | 9,305 |
+-------------------------------------+--------------+--+--------------+
| Shareholders' equity | 12,123 | | 14,794 |
+-------------------------------------+--------------+--+--------------+
CML Microsystems Plc
Condensed Consolidated Cash Flow Statement
+-------------------------------------+--------------+--+--------------+
| | Unaudited | | Audited |
+-------------------------------------+--------------+--+--------------+
| | Year End | | Year End |
| | 31 March | | 31 March |
| | 2010 | | 2009 |
+-------------------------------------+--------------+--+--------------+
| | GBP'000 | | GBP'000 |
+-------------------------------------+--------------+--+--------------+
| Operating activities | | | |
+-------------------------------------+--------------+--+--------------+
| Net loss for the year before income | (386) | | (2,089) |
| taxes | | | |
+-------------------------------------+--------------+--+--------------+
| Adjustments for: | | | |
+-------------------------------------+--------------+--+--------------+
| Depreciation | 661 | | 437 |
+-------------------------------------+--------------+--+--------------+
| Amortisation of development costs | 3,750 | | 4,183 |
+-------------------------------------+--------------+--+--------------+
| Movement in pensions deficit | (105) | | 319 |
+-------------------------------------+--------------+--+--------------+
| Share based payments | 104 | | 101 |
+-------------------------------------+--------------+--+--------------+
| Interest expense | 307 | | 333 |
+-------------------------------------+--------------+--+--------------+
| Interest income | (4) | | (115) |
+-------------------------------------+--------------+--+--------------+
| Decrease in working capital | 183 | | 132 |
+-------------------------------------+--------------+--+--------------+
| Cash flows from operating | 4,510 | | 3,301 |
| activities | | | |
+-------------------------------------+--------------+--+--------------+
| Income tax refunded | 237 | | 225 |
+-------------------------------------+--------------+--+--------------+
| Net cash flows from operating | 4,747 | | 3,526 |
| activities | | | |
+-------------------------------------+--------------+--+--------------+
| | | | |
+-------------------------------------+--------------+--+--------------+
| Investing activities | | | |
+-------------------------------------+--------------+--+--------------+
| Purchase of property, plant and | (49) | | (66) |
| equipment | | | |
+-------------------------------------+--------------+--+--------------+
| Investment in development costs | (2,815) | | (3,969) |
+-------------------------------------+--------------+--+--------------+
| Disposals of property, plant and | 9 | | 38 |
| equipment | | | |
+-------------------------------------+--------------+--+--------------+
| Interest income | 4 | | 115 |
+-------------------------------------+--------------+--+--------------+
| Net cash flows from investing | (2,851) | | (3,882) |
| activities | | | |
+-------------------------------------+--------------+--+--------------+
| | | | |
+-------------------------------------+--------------+--+--------------+
| Financing activities | | | |
+-------------------------------------+--------------+--+--------------+
| (Decrease)/increase in short term | (62) | | 987 |
| borrowings | | | |
+-------------------------------------+--------------+--+--------------+
| Interest expense | (190) | | (333) |
+-------------------------------------+--------------+--+--------------+
| Net cash flows from financing | (252) | | 654 |
| activities | | | |
+-------------------------------------+--------------+--+--------------+
| | | | |
+-------------------------------------+--------------+--+--------------+
| Increase in cash and cash | 1,644 | | 298 |
| equivalents | | | |
+-------------------------------------+--------------+--+--------------+
| | | | |
+-------------------------------------+--------------+--+--------------+
| Movement in cash and cash | | | |
| equivalents: | | | |
+-------------------------------------+--------------+--+--------------+
| At start of year | 2,192 | | 1,891 |
+-------------------------------------+--------------+--+--------------+
| Increase in cash and cash | 1,644 | | 298 |
| equivalents | | | |
+-------------------------------------+--------------+--+--------------+
| Effects of exchange rate changes | 47 | | 3 |
+-------------------------------------+--------------+--+--------------+
| At end of year | 3,883 | | 2,192 |
+-------------------------------------+--------------+--+--------------+
CML Microsystems Plc
Condensed Consolidated Statement of Changes in Equity
+-------------------+-------+--+---------+--------+----------+----------+----------+----------+-------------+---------+
| | | | Share Based Payments | Foreign | Accumulated | |
| Unaudited | Share | Share | | Exchange | Profits | Total |
| | Capital |Premium | | Reserve | | |
+-------------------+----------+---------+-----------------------------------------+----------+-------------+---------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+-------------------+----------+---------+-----------------------------------------+----------+-------------+---------+
| | | | | | | |
+-------------------+----------+---------+-----------------------------------------+----------+-------------+---------+
| At 31 March 2008 | 747 | 4,148 | 50 | 46 | 12,605 | 17,596 |
+-------------------+----------+---------+-----------------------------------------+----------+-------------+---------+
| Loss for year | | | | | (2,136) | (2,136) |
+-------------------+----------+---------+-----------------------------------------+----------+-------------+---------+
| Other comprehensive | | | | | | |
| income: | | | | | | |
+---------------------------+--+---------+-----------------------------------------+----------+-------------+---------+
| Foreign Exchange | | | | | | |
| differences | | | | 397 | | 397 |
+-------------------+----------+---------+-----------------------------------------+----------+-------------+---------+
| Defined benefit | | | | | | |
| pension scheme | | | | | (1,671) | (1,671) |
+-------------------+----------+---------+-----------------------------------------+----------+-------------+---------+
| Tax on defined | | | | | | |
| benefit pension | | | | | 507 | 507 |
| scheme | | | | | | |
+-------------------+----------+---------+-----------------------------------------+----------+-------------+---------+
| Total | | | | | | |
| comprehensive | - | - | - | 397 | (3,300) | (2,903) |
| income for the | | | | | | |
| year | | | | | | |
+-------------------+----------+---------+-----------------------------------------+----------+-------------+---------+
| | | | | | | |
+-------------------+----------+---------+-----------------------------------------+----------+-------------+---------+
| | 747 | 4,148 | 50 | 443 | 9,305 | 14,693 |
+-------------------+----------+---------+-----------------------------------------+----------+-------------+---------+
| Transactions with owners in their capacity as | | | | | | |
| owners: | | | | | | |
+-------------------------------------------------+----------+----------+----------+----------+-------------+---------+
| Share based | | | 101 | | | 101 |
| payments | | | | | | |
+-------------------+----------+---------+-----------------------------------------+----------+-------------+---------+
| | | | | | | |
+-------------------+----------+---------+-----------------------------------------+----------+-------------+---------+
| At 31 March 2009 | 747 | 4,148 | 151 | 443 | 9,305 | 14,794 |
+-------------------+----------+---------+-----------------------------------------+----------+-------------+---------+
| Loss for year | | | | | (23) | (23) |
+-------------------+----------+---------+-----------------------------------------+----------+-------------+---------+
| Other comprehensive | | | | | | |
| income: | | | | | | |
+---------------------------+--+---------+-----------------------------------------+----------+-------------+---------+
| Foreign Exchange | | | | (69) | | (69) |
| differences | | | | | | |
+-------------------+----------+---------+-----------------------------------------+----------+-------------+---------+
| Defined benefit | | | | | | |
| pension scheme | | | | | (3,726) | (3,726) |
+-------------------+----------+---------+-----------------------------------------+----------+-------------+---------+
| Tax on defined | | | | | | |
| benefit pension | | | | | 1,043 | 1,043 |
| scheme | | | | | | |
+-------------------+----------+---------+-----------------------------------------+----------+-------------+---------+
| Total | | | | | | |
| comprehensive | - | - | - | (69) | (2,706) | (2,775) |
| income for the | | | | | | |
| year | | | | | | |
+-------------------+----------+---------+-----------------------------------------+----------+-------------+---------+
| | | | | | | |
+-------------------+----------+---------+-----------------------------------------+----------+-------------+---------+
| | 747 | 4,148 | 151 | 374 | 6,599 | 12,019 |
+-------------------+----------+---------+-----------------------------------------+----------+-------------+---------+
| Transactions with owners in their capacity as | | | | | | |
| owners: | | | | | | |
+-------------------------------------------------+----------+----------+----------+----------+-------------+---------+
| Share based | | | | | | |
| payments | | | | | | |
+-------------------+----------+---------+-----------------------------------------+----------+-------------+---------+
| | | | 104 | | | 104 |
+-------------------+----------+---------+-----------------------------------------+----------+-------------+---------+
| At 31 March 2010 | 747 | 4,148 | 255 | 374 | 6,599 | 12,123 |
+-------------------+----------+---------+-----------------------------------------+----------+-------------+---------+
| | | | | | | | | | | |
+-------------------+-------+--+---------+--------+----------+----------+----------+----------+-------------+---------+
CML Microsystems Plc
Notes to the condensed financial statements
1. Segmental Analysis
+------------------+----+----+----------+----------------+-----------+-----------+----------------+-----------+
| | Unaudited | Audited |
+------------------+-------------------------------------------------+----------------------------------------+
| | Year End | Year End |
+------------------+-------------------------------------------------+----------------------------------------+
| | 31 March 2010 | 31 March 2009 |
+------------------+-------------------------------------------------+----------------------------------------+
| | |Semi-conductor | | |Semi-conductor | |
| | Equipment | components | Group |Equipment | components | Group |
+------------------+--------------------+----------------+-----------+-----------+----------------+-----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------+--------------------+----------------+-----------+-----------+----------------+-----------+
| Revenue | | | | | | |
+------------------+--------------------+----------------+-----------+-----------+----------------+-----------+
| By origination | 722 | 28,257 | 28,979 | 979 | 20,928 | 21,907 |
+------------------+--------------------+----------------+-----------+-----------+----------------+-----------+
| Inter-segmental | - | (10,956) | (10,956) | - | (5,818) | (5,818) |
| revenue | | | | | | |
+------------------+--------------------+----------------+-----------+-----------+----------------+-----------+
| Segmental | 722 | 17,301 | 18,023 | 979 | 15,110 | 16,089 |
| revenue | | | | | | |
+------------------+--------------------+----------------+-----------+-----------+----------------+-----------+
| Profit/(Loss) | | | | | | |
+------------------+--------------------+----------------+-----------+-----------+----------------+-----------+
| Segmental result | (12) | (71) | (83) | 54 | (1,930) | (1,876) |
+------------------+--------------------+----------------+-----------+-----------+----------------+-----------+
| Financial | | | (307) | | | (333) |
| expense | | | | | | |
+------------------+--------------------+----------------+-----------+-----------+----------------+-----------+
| Financial income | | | 4 | | | 115 |
+------------------+--------------------+----------------+-----------+-----------+----------------+-----------+
| Revaluation of | | | | | | |
| investment | | | - | | | 5 |
| properties | | | | | | |
+------------------+--------------------+----------------+-----------+-----------+----------------+-----------+
| Income tax | | | 363 | | | (47) |
+------------------+--------------------+----------------+-----------+-----------+----------------+-----------+
| Loss after | | | 23 | | | (2,136) |
| taxation | | | | | | |
+------------------+--------------------+----------------+-----------+-----------+----------------+-----------+
| Assets and | | | | | | |
| Liabilities | | | | | | |
+------------------+--------------------+----------------+-----------+-----------+----------------+-----------+
| Segmental assets | 641 | 20,538 | 21,179 | 686 | 20,012 | 20,698 |
+------------------+--------------------+----------------+-----------+-----------+----------------+-----------+
| Unallocated corporate | | | | | | |
| assets | | | | | | |
+-----------------------+---------------+----------------+-----------+-----------+----------------+-----------+
| Investment | | | 4,291 | | | 4,317 |
| property | | | | | | |
| (Including held | | | | | | |
| for sale) | | | | | | |
+------------------+--------------------+----------------+-----------+-----------+----------------+-----------+
| Deferred | | | 3,097 | | | 2,019 |
| taxation | | | | | | |
+------------------+--------------------+----------------+-----------+-----------+----------------+-----------+
| Current tax | | | 142 | | | 355 |
| receivable | | | | | | |
+------------------+--------------------+----------------+-----------+-----------+----------------+-----------+
| Consolidated | | | 28,709 | | | 27,389 |
| total assets | | | | | | |
+------------------+--------------------+----------------+-----------+-----------+----------------+-----------+
| | | | | | | |
+------------------+--------------------+----------------+-----------+-----------+----------------+-----------+
| Segmental | 23 | 2,657 | 2,680 | 51 | 2,018 | 2,069 |
| liabilities | | | | | | |
+------------------+--------------------+----------------+-----------+-----------+----------------+-----------+
| Unallocated corporate | | | | | | |
| liabilities | | | | | | |
+-----------------------+---------------+----------------+-----------+-----------+----------------+-----------+
| Deferred | | | 2,172 | | | 2,459 |
| taxation | | | | | | |
+------------------+--------------------+----------------+-----------+-----------+----------------+-----------+
| Current tax | | | 38 | | | 15 |
| liability | | | | | | |
+------------------+--------------------+----------------+-----------+-----------+----------------+-----------+
| Bank loans and | | | | | | |
| overdrafts | | | 5,968 | | | 6,062 |
+------------------+--------------------+----------------+-----------+-----------+----------------+-----------+
| Retirement | | | | | | |
| benefit | | | 5,728 | | | 1,990 |
| obligation | | | | | | |
+------------------+--------------------+----------------+-----------+-----------+----------------+-----------+
| Consolidated | | | | | | |
| total | | | 16,586 | | | 12,595 |
| liabilities | | | | | | |
+------------------+--------------------+----------------+-----------+-----------+----------------+-----------+
| Other segmental | | | | | | |
| information | | | | | | |
+----------------------------+----------+----------------+-----------+-----------+----------------+-----------+
| Property, plant | | | | | | |
| and equipment | - | 49 | 49 | 30 | 36 | 66 |
| additions | | | | | | |
+------------------+--------------------+----------------+-----------+-----------+----------------+-----------+
| Development cost | | | | | | |
| additions | 72 | 2,743 | 2,815 | 74 | 3,895 | 3,969 |
+------------------+--------------------+----------------+-----------+-----------+----------------+-----------+
| Depreciation | 8 | 653 | 661 | 16 | 421 | 437 |
+------------------+--------------------+----------------+-----------+-----------+----------------+-----------+
| Amortisation | 72 | 3,678 | 3,750 | 73 | 4,110 | 4,183 |
+------------------+--------------------+----------------+-----------+-----------+----------------+-----------+
| | | | | | | | | |
+------------------+----+----+----------+----------------+-----------+-----------+----------------+-----------+
Geographical information
+---------------------------+---------+---------+----------+---------+----------+
| | UK | Germany | Americas | Far | Total |
| | | | | East | |
+---------------------------+---------+---------+----------+---------+----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+---------------------------+---------+---------+----------+---------+----------+
| Unaudited | | | | | |
+---------------------------+---------+---------+----------+---------+----------+
| Year ended 31 March 2010 | | | | | |
+---------------------------+---------+---------+----------+---------+----------+
| Revenue by origination | 11,003 | 7,174 | 4,373 | 6,428 | 28,978 |
+---------------------------+---------+---------+----------+---------+----------+
| Inter-segmental revenue | (4,809) | (6,138) | - | (8) | (10,955) |
+---------------------------+---------+---------+----------+---------+----------+
| Revenue to third parties | 6,194 | 1,036 | 4,373 | 6,420 | 18,023 |
+---------------------------+---------+---------+----------+---------+----------+
| | | | | | |
+---------------------------+---------+---------+----------+---------+----------+
| Property, plant and | 5,111 | 115 | 59 | 19 | 5,304 |
| equipment | | | | | |
+---------------------------+---------+---------+----------+---------+----------+
| Investment properties | 3,850 | - | - | - | 3,850 |
+---------------------------+---------+---------+----------+---------+----------+
| Goodwill | - | 3,512 | - | - | 3,512 |
+---------------------------+---------+---------+----------+---------+----------+
| Development cost | 2,661 | 1,528 | - | - | 4,189 |
+---------------------------+---------+---------+----------+---------+----------+
| Total assets | 21,222 | 4,644 | 1,565 | 1,278 | 28,709 |
+---------------------------+---------+---------+----------+---------+----------+
| | | | | | |
+---------------------------+---------+---------+----------+---------+----------+
| Audited | | | | | |
+---------------------------+---------+---------+----------+---------+----------+
| Year ended 31 March 2009 | | | | | |
+---------------------------+---------+---------+----------+---------+----------+
| Revenue by origination | 9,043 | 3,427 | 4,569 | 4,868 | 21,907 |
+---------------------------+---------+---------+----------+---------+----------+
| Inter-segmental revenue | (2,521) | (2,794) | (503) | - | (5,818) |
+---------------------------+---------+---------+----------+---------+----------+
| Revenue to third parties | 6,522 | 633 | 4,066 | 4,868 | 16,089 |
+---------------------------+---------+---------+----------+---------+----------+
| | | | | | |
+---------------------------+---------+---------+----------+---------+----------+
| Property, plant and | 5,627 | 197 | 79 | 28 | 5,931 |
| equipment | | | | | |
+---------------------------+---------+---------+----------+---------+----------+
| Investment properties | 3,850 | - | - | - | 3,850 |
+---------------------------+---------+---------+----------+---------+----------+
| Goodwill | - | 3,512 | - | - | 3,512 |
+---------------------------+---------+---------+----------+---------+----------+
| Development cost | 3,626 | 1,566 | - | - | 5,192 |
+---------------------------+---------+---------+----------+---------+----------+
| Total assets | 20,280 | 3,883 | 1,713 | 1,513 | 27,389 |
+---------------------------+---------+---------+----------+---------+----------+
Reported segments and their results in accordance with IFRS 8, is based on
internal management reporting information that is regularly reviewed by the
chief operating decision maker (C Gurry). The measurement policies the Group
uses for segmental reporting under IFRS 8 are the same as those used in its
financial statements. No comparative figures needed restating to comply with the
fact that IFRS 8 needed to be applied retrospectively.
Inter-segmental transfers or transactions are entered into under commercial
terms and conditions appropriate to the location of the entity whilst
considering that the parties are related.
2. Dividend paid and proposed
No dividend has been paid or proposed in the year end 31 March 2010 or the year
end 31 March 2009.
3. Income tax
The directors consider that tax will be payable at varying rates according to
the country of incorporation of a subsidiary and have provided on that basis.
+------------------------------------------+------------+--+------------+
| | Unaudited | | Audited |
+------------------------------------------+------------+--+------------+
| | Year End | | Year End |
+------------------------------------------+------------+--+------------+
| | 31 March | | 31 March |
| | 2010 | | 2009 |
+------------------------------------------+------------+--+------------+
| | GBP'000 | | GBP'000 |
+------------------------------------------+------------+--+------------+
| | | | |
+------------------------------------------+------------+--+------------+
| UK income tax | (142) | | (305) |
+------------------------------------------+------------+--+------------+
| Overseas income tax | 132 | | 114 |
+------------------------------------------+------------+--+------------+
| Total current tax credit | (10) | | (191) |
+------------------------------------------+------------+--+------------+
| Deferred tax | (353) | | 238 |
+------------------------------------------+------------+--+------------+
| Reported income tax (credit)/charge | (363) | | 47 |
+------------------------------------------+------------+--+------------+
4. Loss per share
The calculation of basic and diluted earnings per share is based on the loss
attributable to ordinary shareholders divided by the weighted average number of
shares in issue during the year.
+----------------------+-----------+------------+-----------+-------------+------------+---------+
| |Unaudited | Weighted |Unaudited | Audited | Weighted |Audited |
| | Loss | average | Loss per | Loss | average | Loss |
| | | number | share | | number | per |
| | | of | | | of | share |
| | | shares | | | shares | |
+----------------------+-----------+------------+-----------+-------------+------------+---------+
| | 2010 | 2010 | 2010 | 2009 | 2009 | 2009 |
+----------------------+-----------+------------+-----------+-------------+------------+---------+
| | GBP | Number | p | GBP | Number | p |
+----------------------+-----------+------------+-----------+-------------+------------+---------+
| Basic loss per share | (23,414) | 14,947,626 | (0.16) | (2,135,844) | 14,947,626 | (14.29) |
+----------------------+-----------+------------+-----------+-------------+------------+---------+
| | | | | | | |
+----------------------+-----------+------------+-----------+-------------+------------+---------+
| Diluted loss per | | | | | | |
| share | | | | | | |
+----------------------+-----------+------------+-----------+-------------+------------+---------+
| Basic loss per share | (23,414) | 14,947,626 | (0.16) | (2,135,844) | 14,947,626 | (14.29) |
+----------------------+-----------+------------+-----------+-------------+------------+---------+
| Dilutive effect of | - | 21,332 | - | - | - | - |
| share options | | | | | | |
+----------------------+-----------+------------+-----------+-------------+------------+---------+
| Diluted loss per | (23,414) | 14,968,958 | (0.16) | (2,135,844) | 14,947,626 | (14.29) |
| share | | | | | | |
+----------------------+-----------+------------+-----------+-------------+------------+---------+
5. Investment Properties
Investment properties are revalued at each discrete period end by the directors
and every third year by independent Chartered Surveyors on an open market basis.
No depreciation is provided on freehold investment properties or on leasehold
investment properties. In accordance with IAS 40, gains and losses arising on
revaluation of investment properties are shown in the income statement. At the
31 March 2009 the investment properties were professionally valued by Everett
Newlyn, Chartered Surveyors and Commercial Property Consultants on an open
market basis.
6. Analysis of cash flow movement in net debt
+------------------+---------+---------+---------+-----------+-----------+
| |Audited |Audited |Audited |Unaudited |Unaudited |
+------------------+---------+---------+---------+-----------+-----------+
| | Net | Year | Net | Year | Net |
| |debt at | end |debt at | end | debt at |
| | 31 | 31 | 31 | 31 | 31 |
| | March | March | March | March | March |
| | 2008 | 2009 | 2009 | 2010 | 2010 |
| | | Cash | | Cash | |
| | | Flow | | Flow | |
+------------------+---------+---------+---------+-----------+-----------+
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 |
+------------------+---------+---------+---------+-----------+-----------+
| Cash and Cash | 1,891 | 301 | 2,192 | 1,691 | 3,883 |
| equivalents | | | | | |
+------------------+---------+---------+---------+-----------+-----------+
| Bank loans and | (5,075) | (987) | (6,062) | 94 | (5,968) |
| overdrafts | | | | | |
+------------------+---------+---------+---------+-----------+-----------+
| | (3,184) | (686) | (3,870) | 1,785 | (2,085) |
+------------------+---------+---------+---------+-----------+-----------+
The cash flow above is a combination of the actual cash flow and the exchange
movement.
7. Principal risks and uncertainties
Key risks of a financial nature
The principal risks and uncertainties facing the Group are with foreign
currencies and customer dependency. With the majority of the Group's earnings
being linked to the US Dollar a decline in this currency will have a direct
effect on revenue, although since the majority of the cost of sales are also
linked to the US Dollar, this risk is reduced at the gross profit line.
Additionally, though the Group has a very diverse customer base in certain
market segments, key customers can represent a significant amount of revenue.
Key customer relationships are closely monitored, however changes in buying
patterns of a key customer could have an adverse effect on the Group's
performance.
Key risks of a non-financial nature
The Group is a small player operating in a highly competitive global market,
which is undergoing continual and geographical change. The Group's ability to
respond to many competitive factors including, but not limited to pricing,
technological innovations, product quality, customer service, manufacturing
capabilities and employment of qualified personnel will be key in the
achievement of its objectives, but its ultimate success will depend on the
demand for its customers' products since the Group is a component supplier.
A substantial proportion of the Group's revenue and earnings are derived
from outside the UK and so the Group's ability to achieve its financial
objectives could be impacted by risks and uncertainties associated with local
legal requirements, the enforceability of laws and contracts, changes in the tax
laws, terrorist activities, natural disasters or health epidemics.
8. Directors' statement pursuant to the Disclosure and Transparency Rules
The directors confirm that, to the best of their knowledge:
a. the condensed consolidated financial statements, prepared in accordance
with IFRS as adopted by the EU give a true and fair view of the assets,
liabilities, financial position and loss of the company and the undertakings
included in the consolidation taken as a whole; and
b. the Chairman's Statement and Operating and Financial Review
includes a fair review of the development and performance of the business and
the position of the company and the undertakings included in the consolidation
taken as a whole together with a description of the principal risks and
uncertainties that they face.
The directors are also responsible for the maintenance and integrity of the
CML Microsystems Plc website. Legislation in the UK governing the preparation
and dissemination of the financial statements may differ from legislation in
other jurisdictions.
9. Significant accounting policies
The accounting policies used in preparation of the Annual Results
Announcement are the same accounting policies set out in the year ended 31 March
2009 financial statements except for the adoption of:
IAS 1 Presentation of Financial Statements (Revised 2007) and IFRS 8
Operating Segments
The adoption of IAS 1 (Revised 2007) makes certain changes to the format and
titles of the primary statements and to the presentation of some items within
these statements. IAS 1 affects the presentation of shareholder changes in
equity and introduces "Consolidated statement of comprehensive income". In
accordance with the new standard the entity does not present a "Statement of
recognised income and expense", as was presented in the 31 March 2009 financial
statements. Further, a "Consolidated statement of changes in equity" is now
presented as a primary statement. The adoption of IFRS 8 has not affected the
identified operating segments for the Group.
10. General
The results for the year have been prepared using the recognition and
measurement principles of International Financial Reporting Standards as adopted
by the EU.
The audited financial information for the year ended 31st March 2009 is based on
the statutory accounts for the financial year ended 31st March 2009 that have
been filed with the Registrar of Companies. The auditors reported on those
accounts: their report was (i) unqualified, (ii) did not include references to
any matters to which the auditors drew attention by way of emphasis without
qualifying the reports and (iii) did not contain statements under section 498(2)
or (3) of the Companies Act 2006.
The statutory accounts for the year ended 31st March 2010 are expected to be
finalised and signed following approval by the board of directors on 25 June
2010 and delivered to the Registrar of Companies following the Company's Annual
General Meeting on 22 July 2010.
The financial information contained in this announcement does not constitute
statutory accounts for the year ended 31st March 2010 or 2009 as defined by
Section 434 of the Companies Act 2006.
A copy of this announcement can be viewed on the company website
http://www.cmlmicroplc.com.
11. Approval
The directors approved this Annual Results Announcement on 14 June 2010.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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