TIDMCML
RNS Number : 3628I
CML Microsystems PLC
14 June 2011
CML Microsystems Plc
PRELIMINARY RESULTS
CML Microsystems Plc ("CML"), which designs, manufactures and
markets a broad range of semiconductors, primarily for global
communication and storage markets, announces Preliminary Results
for the year ended 31 March 2011, which show a return to
profitability and the reinstatement of a dividend payment.
Financial Highlights:
-- Revenues up 23% to GBP22.12m (2010: GBP18.02m)
-- Gross profit up 23% to GBP15.37m (2010: GBP12.49m)
-- Profit before tax of GBP2.32m (2010: loss of GBP386k)
-- EPS of 17.64p diluted (2010: loss of 0.16p)
-- Net cash inflow of GBP4.41m (2010: GBP1.78m)
-- Cash reserves at 31 March 2011 of GBP6.25m (2010:
GBP3.88m)
-- Net cash position of GBP2.33m (2010: net debt of
GBP2.09m)
-- Final dividend of 3.5p per ordinary share (2010: nil)
Operational Highlights:
-- Wireless: (c. 43% of revenues) - 28% growth with healthy
contribution from the RF portfolio along with established silicon
platform technology, FirmASIC
-- Storage: (c. 40% of revenues) - 22% growth from the majority
of CML's main customers
-- Wireline telecom: (c. 12% of revenues) - double-digit growth
reversing trend of the last 2 years
-- Equipment: (c. 4% of revenues) - 7% growth due to higher
demand for wireless telemetry products from UK utility
companies.
Regarding Outlook, Chris Gurry, Managing Director of CML,
said:
"This was an important year in the Group's objective for
sustainable business growth and a much improved trading performance
was posted. General conditions within the majority of our focus
market and application areas improved, following the healthier
visibility seen towards the end of the prior year.
"The Board is pleased with the progress made throughout the
period and looks forward to the further advances that are expected
to materialise over the year ahead."
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 or
paul.mcmanus@walbrookpr.com
Helen Westaway Mob: 07841 917 679 or
helen.westaway@walbrookpr.com
Chairman's statement
Introduction
These results for the full trading year provide satisfying
further evidence of the clear improvement in performance that your
Company is achieving.
Particular encouragement can be drawn from the positive sales
gains that were posted in all principal Group product areas and
also in most major market territories, as the operating and
financial review makes clear.
The achievement of a return to trading profitability provided
opportunities for your management to reduce Group borrowings from
an opening net debt position to a net cash position by the
financial year end.
Results
To summarise the results, Group revenues for the year just ended
were GBP22.12m (2010: GBP18.02m) while gross profit was GBP15.37m
(2010: GBP12.49m). A profit before tax of GBP2.32m, which is
arrived at after a GBP400k reduction in the estimated value of
investment properties, compares with a loss the previous year
(2010: loss of GBP386k).
Earnings per share of 17.64p diluted (2010: loss of 0.16p)
reflect the benefit of an income tax credit that raised the
Company's post-tax profit to GBP2.68m.
Dividend
Your Directors' believe that shareholders should receive
appropriate benefit according to the performance of their Company.
For the year ended 31 March 2008 the Board took the difficult but
necessary decision to cease payment of a dividend for the first
time since becoming a publicly listed company in 1984. I am pleased
to report that in the present circumstances, the Directors are
recommending payment of a final dividend of 3.5p per ordinary share
to be paid on 5 August 2011 to all shareholders whose names appear
on the register at close of business on 24 June 2011.
As mentioned at the interim stage, your Company transitioned to
Standard Listing status during the year. It is the view of your
Board that this is the most appropriate listing for your Company
given the rising administrative demands of a Premium Listing. This
does not prevent your Board electing to observe selected Premium
Listing rules that it deems appropriate.
Prospects
I see evidence for further progress by your Company in its aim
of continuing future growth. Subject to unforeseen circumstances, I
have confidence that my expectations will be realised.
Once again, I cannot conclude my report to you without
expressing the Board's thanks to your Company's employees for their
skills and commitment towards its success.
GW Gurry
Chairman 14 June 2011
Operating and financial review
OVERVIEW
Over the course of the year under review, we experienced the
very positive effects from the ongoing execution of our sustainable
growth strategy.
The consistent objective has been to combine our resources,
proprietary technology and system-level understanding to develop
and successfully market class-leading semiconductor products that
solve real-world customer problems.
Our progress is highlighted by the material increase in revenue
levels that contained a solid and growing contribution from
products that were conceived and launched more recently.
The level of new product development activities remained healthy
through the year with engineering resources being strengthened to
address the higher number of market opportunities that
materialised.
Trading for the full year matched expectations for a
traditionally slightly weaker second half and an encouraging full
year return to profit was recorded.
FINANCIAL RESULTS
Group revenues for the year ended 31 March 2011 increased to
GBP22.12m representing a 23% improvement over the prior year (2010:
GBP18.02m). This increase was broad based reflecting higher
semiconductor sales into all major geographical locations and
across the three main market areas; namely wireless, storage and
wireline telecom.
The majority of customer transactions were denominated in US
Dollars leading to a slightly positive but immaterial effect on
Group consolidated revenues. No one customer accounted for more
than 9% of total sales.
Gross profit for the year was GBP15.37m equating to a 23%
increase against the prior year (2010: GBP12.49m). The gross margin
remained stable at 69%.
The Group's distribution and administration expenses fell by 2%
to GBP12.73m (2010: 13.03m). Although direct staffing costs
increased year on year, lower depreciation and amortisation charges
coupled with a GBP124k foreign exchange benefit (2010: GBP318k
loss) resulted in an overall positive effect.
At the operating level, prior to other operating income, the
result was a GBP2.64m profit highlighting a GBP3.18m positive swing
from the previous year (2010: GBP0.54m loss).
Other operating income fell from GBP0.56m (2010) to GBP0.39m as
a direct result of lower EU grant monies and a reduction in rental
income from certain of the Group's investment property assets.
The Board decided to act prudently in the face of a difficult
commercial property environment and, after seeking appropriate
advice, reduced the value of its investment properties by
GBP400k.
Net finance costs amounted to GBP260k (2010: GBP303k).
The firm sales growth coupled with stable margins and tight cost
control enabled a profit before tax of GBP2.32m to be recorded
(2010: GBP0.39m loss).
The Group made solid progress with its cash position. Net cash
inflow for the year was GBP4.41m (2010:GBP1.78m) facilitating the
transition from a net debt position of GBP2.09m at 1 April 2010
into a net cash situation of GBP2.33m at 31 March 2011.
Inventory levels at the year-end were slightly up at GBP1.67m
(2010: GBP1.49m) and well within expectations given the strong
revenue increase reported.
An income tax credit of GBP360k was received (2010: GBP363k)
mainly as a result of deferred tax on prior year losses and
development expenditure incurred.
During the year capitalised development expenses amounted to
GBP2.79m (2010: GBP2.82m) whilst a further amount of GBP574k (2010:
GBP563k) was written off to research and development. Total
development costs represented 15% of sales. The Group maintained
its focus on proprietary intellectual property development whilst
also partnering with key complementary technology leaders where
appropriate. Internal resources were strengthened as a result of
the increased number of opportunities that were presented.
Net assets rose to GBP17.52m (2010: GBP12.12m) largely assisted
by the increase in profitability and a reduced liability in respect
of the defined benefit pension scheme. The scheme was closed in
prior years in respect of new entrants and future accruals.
MARKETS REVIEW
Wireless
During the period, wireless product shipments accounted for
close to 43% of Group sales and also represented the largest growth
percentage year on year at approximately 28%. This solid increase
was posted across a wide customer base and consisted of gains from
a number of existing customers coupled with new revenue streams
emanating from more recent design wins.
The resulting product mix included a healthy contribution from
the RF portfolio along with our now established silicon platform
technology, FirmASIC.
From a development perspective, the Group continued to widen the
scope of functionality offered by its semiconductor products.
Through the year this led to the release of a number of new ICs for
analogue and digital two-way radio markets along with data-centric
application areas such as industrial radio data modems and marine
safety (AIS) transponders.
Our development strategy to further expand the product range
continued and we made good progress with evolving towards a
comprehensive device portfolio consisting of RF, baseband and voice
coding ICs.
Storage
The shipment of flash memory controller ICs into the storage
market grew by more than 22% against the prior year culminating in
a total contribution to Group revenues from this category of 40%.
Gains were achieved at the majority of our main customers whilst
certain embryo level customers began to ramp their production
output. Improved trading was evident across each of the major
geographical regions served.
Throughout the year customers utilised our flash memory
controller ICs within a variety of removable media card and solid
state drive applications predominantly targeted at the very robust
storage requirements of the global telecom, networking and embedded
computing markets.
Research and development activities were focused around
maintaining a leading position in the growing sub-markets already
addressed together with expanding the semiconductor portfolio to
embrace similar application areas and opportunities. In this
respect, we sampled first silicon from an announced co-operation
with Toshiba Electronics Europe by the end of the year.
Wireline telecom
The sale of semiconductors into the wireline telecom arena
posted a double-digit increase and reversed the annual trend of the
prior two years. Shipments amounted to just under 12% of Group
revenues. The encouraging signs seen at the end of the previous
year, where newer devices were starting to create design-win
momentum, translated to real gains as customer end products
achieved market acceptance.
A major contributor to the growth achieved was the sale of modem
ICs to customers who manufacture payment terminals for China's
recently established self-service electronic payment service, "Pay
Easy". Traditional applications such as security alarm panels
continued to contribute meaningful revenues.
Development activities were centred on ensuring that the telecom
product range remained price and performance competitive for the
sub-markets addressed. The level of customer design-in activity
continued to be healthy.
Equipment
The Group's equipment division, RDT, posted a 7% revenue
increase to GBP769k (2010: GBP722k) as a consequence of the higher
demand for wireless telemetry products from public utility
companies located in the UK. The UK commercial CCTV market
continued to be quite stagnant from a wireless video product
perspective. Overall contribution to Group sales was just under
4%.
Just prior to the year end the Company signed an agreement with
a large UK water company for the continued supply of telemetry and
data transmission products as part of a multi-year programme.
A new product development project that will permit entry into
the GPRS M2M market neared completion during the final quarter.
Approximately 1% of Group revenues were derived from the sale of
products or services that are categorised outside of the market
areas highlighted in this report.
SUMMARY AND OUTLOOK
This was an important year in the Group's objective for
sustainable business growth and a much improved trading performance
was posted. General conditions within the majority of our focus
market and application areas improved, following the healthier
visibility seen towards the end of the prior year.
Products that emerged from the comparatively high levels of
development expenditure in recent times enabled our global sales
teams and sales channel partners to address a wider scope of
opportunities. As we go forward, that continuing strategy is
expected to drive consistent growth.
There are a number of clear drivers within our wireless
semiconductor markets that should generate a further increase in
sales. These include the gradual analogue to digital migration from
the two-way radio users, expansion of the available market for the
more mature TETRA digital radio standard and continuing escalation
of the mandated use of certain marine safety products (AIS). The
Company has evolved to offer a range of semiconductors with
complementary functionality into each of these sub-sectors and is
well positioned to benefit as the markets advance.
For the storage markets, our expectations are that the majority
of existing customers will continue to grow their business levels
and that we will also continue to expand our customer base. To
date, Group semiconductor solutions for storage markets have been
focused on the mature interface standards used within industrial
and commercial high-reliability application areas. Through this
coming year we will start to deliver flash memory controller ICs
that address complementary areas of the wider market that demand
alternative standard interfaces. These products will be based upon
an evolution of our patented proprietary technology that was first
launched in 1999. This should increase the total available market
noticeably.
The objectives for the year to March 2012 are to maintain a
robust level of appropriate new product development activities
while continuing to expand our global customer base, both directly
and in conjunction with our extensive sales channels. The
escalating product portfolio should enable us to penetrate
customers and secure market opportunities that were previously
closed to us. The overriding objective is to field class leading
semiconductors by having a thorough system-level understanding of
the customer's application.
The Board is pleased with the progress made throughout the
period and looks forward to the further advances that are expected
to materialise over the year ahead.
C.A. Gurry
Managing Director
CML Microsystems Plc
Condensed consolidated income statement
Unaudited Audited
2011 2010
GBP GBP
---------------------------------------------- ------------- -------------
Continuing operations
Revenue 22,121,646 18,023,139
Cost of sales (6,754,114) (5,533,377)
---------------------------------------------- ------------- -------------
Gross profit 15,367,532 12,489,762
Distribution and administration costs (12,728,955) (13,031,511)
---------------------------------------------- ------------- -------------
2,638,577 (541,749)
Other operating income 388,712 562,889
---------------------------------------------- ------------- -------------
Profit from operations 3,027,289 21,140
Share-based payments (43,134) (103,937)
---------------------------------------------- ------------- -------------
Profit/(loss) after share-based payments 2,984,155 (82,797)
Revaluation of investment properties (400,000) -
Finance costs (270,834) (307,344)
Finance income 11,289 4,029
---------------------------------------------- ------------- -------------
Profit/(loss) before taxation 2,324,610 (386,112)
Income tax credit 359,900 362,698
---------------------------------------------- ------------- -------------
Profit/(loss) after taxation attributable to
equity owners of the parent 2,684,510 (23,414)
---------------------------------------------- ------------- -------------
Profit/(loss per share)
Basic 17.87p (0.16)p
---------------------------------------------- ------------- -------------
Diluted 17.64p (0.16)p
---------------------------------------------- ------------- -------------
Condensed consolidated statement of comprehensive income
Unaudited Unaudited Audited Audited
2011 2011 2010 2010
GBP GBP GBP GBP
-------------------------- ---------- ---------- ------------ ------------
Profit/(loss) for the
year 2,684,510 (23,414)
Other comprehensive
income
Foreign exchange
differences (47,869) (68,940)
Actuarial gain/(loss) on
retirement benefit
obligations 2,811,000 (3,726,000)
Income tax on actuarial
gain/(loss) (800,120) 1,043,280
-------------------------- ---------- ---------- ------------ ------------
Net profit/(loss) for the
year directly recognised
in equity/other
comprehensive income 1,963,011 (2,751,660)
-------------------------- ---------- ---------- ------------ ------------
Total comprehensive
income for the year 4,647,521 (2,775,074)
-------------------------- ---------- ---------- ------------ ------------
CML Microsystems Plc
Condensed consolidated statement of financial position
Unaudited Unaudited Audited Audited
2011 2011 2010 2010
GBP GBP GBP GBP
-------------------------------- --------- ---------- --------- ----------
Assets
Non-current assets
Property, plant and equipment 5,230,759 5,303,868
Investment properties 3,450,000 3,850,000
Development costs 3,624,105 4,189,081
Goodwill 3,512,305 3,512,305
Deferred tax asset 2,534,390 3,096,635
-------------------------------- --------- ---------- --------- ----------
18,351,559 19,951,889
Current assets
Inventories 1,665,529 1,488,839
Trade receivables and
prepayments 1,513,209 2,802,359
Current tax assets 5,581 141,468
Cash and cash equivalents 6,245,694 3,883,238
-------------------------------- --------- ---------- --------- ----------
9,430,013 8,315,904
Non-current assets classified as
held for sale properties 419,773 441,408
-------------------------------- --------- ---------- --------- ----------
Total assets 28,201,345 28,709,201
-------------------------------- --------- ---------- --------- ----------
Liabilities
Current liabilities
Bank loans and overdrafts 3,919,411 5,968,290
Trade and other payables 2,524,534 2,679,145
Current tax liabilities 49,244 38,064
-------------------------------- --------- ---------- --------- ----------
6,493,189 8,685,499
Non-current liabilities
Deferred tax liabilities 1,577,253 2,172,206
Retirement benefit obligation 2,607,000 5,728,000
-------------------------------- --------- ---------- --------- ----------
4,184,253 7,900,206
-------------------------------- --------- ---------- --------- ----------
Total liabilities 10,677,442 16,585,705
-------------------------------- --------- ---------- --------- ----------
Net assets 17,523,903 12,123,496
-------------------------------- --------- ---------- --------- ----------
Capital and reserves
attributable to equity owners of
the parent
Share capital 785,335 747,381
Share premium 4,820,086 4,148,288
Share-based payments reserve 297,886 254,752
Foreign exchange reserve 326,480 374,349
Accumulated profits 11,294,116 6,598,726
-------------------------------- --------- ---------- --------- ----------
Shareholders' equity 17,523,903 12,123,496
-------------------------------- --------- ---------- --------- ----------
CML Microsystems Plc
Condensed consolidated cash flow statement
Unaudited Audited
2011 2010
GBP GBP
------------------------------------------------- ----------- -----------
Operating activities
Net profit/(loss) for the year before taxation 2,324,610 (386,112)
Adjustments for:
Depreciation 321,579 660,488
Amortisation of development costs 3,276,015 3,750,089
Revaluation of investment properties 400,000 -
Movement in pensions deficit (437,000) (105,000)
Share-based payments 43,134 103,937
Finance costs 143,834 307,344
Finance income (11,289) (4,029)
Decrease in working capital 926,184 183,122
------------------------------------------------- ----------- -----------
Cash flows from operating activities 6,987,067 4,509,839
Income tax (paid)/refunded (328,310) 237,441
------------------------------------------------- ----------- -----------
Net cash flows from operating activities 6,658,757 4,747,280
------------------------------------------------- ----------- -----------
Investing activities
Purchase of property, plant and equipment (253,035) (49,065)
Investment in development costs (2,786,386) (2,815,066)
Disposal of property, plant and equipment 31,665 9,199
Finance income 11,289 4,029
------------------------------------------------- ----------- -----------
Net cash flows from investing activities (2,996,467) (2,850,903)
------------------------------------------------- ----------- -----------
Financing activities
Issue of ordinary shares 709,752 -
Finance costs (143,834) (307,344)
Decrease in bank loans and short term borrowings (2,048,879) (61,705)
------------------------------------------------- ----------- -----------
Net cash flows from financing activities (1,482,961) (369,049)
------------------------------------------------- ----------- -----------
Increase in cash and cash equivalents 2,179,329 1,527,328
------------------------------------------------- ----------- -----------
Movement in cash and cash equivalents:
At start of year 3,883,238 2,191,960
Increase in cash and cash equivalents 2,179,329 1,527,328
Effects of exchange rate changes 183,127 163,950
------------------------------------------------- ----------- -----------
At end of year 6,245,694 3,883,238
------------------------------------------------- ----------- -----------
CML Microsystems Plc
Condensed consolidated statement of changes in equity
Share Foreign
Share Share -based exchange Accumulated
capital premium payments reserve profits Total
GBP GBP GBP GBP GBP GBP
Audited
-------------- ------- --------- -------- -------- ----------- -----------
At 31 March
2009 747,381 4,148,288 150,815 443,289 9,304,860 14,794,633
-------------- ------- --------- -------- -------- ----------- -----------
Loss for year (23,414) (23,414)
Other
comprehensive
income
Foreign
exchange
differences (68,940) (68,940)
Net actuarial
losses
recognised
directly to
equity (3,726,000) (3,726,000)
Deferred tax
on actuarial
losses 1,043,280 1,043,280
-------------- ------- --------- -------- -------- ----------- -----------
Total
comprehensive
income for
the year - - - (68,940) (2,706,134) (2,775,074)
-------------- ------- --------- -------- -------- ----------- -----------
747,381 4,148,288 150,815 68,940 6,598,726 12,019,559
Transactions
with owners in
their capacity
as owners
Share-based
payments 103,937 103,937
-------------- ------- --------- -------- -------- ----------- -----------
At 31 March
2010 747,381 4,148,288 254,752 374,349 6,598,726 12,123,496
-------------- ------- --------- -------- -------- ----------- -----------
Unaudited
Profit for
year 2,684,510 2,684,510
Other
comprehensive
income
Foreign
exchange
differences (47,869) (47,869)
Net actuarial
profits
recognised
directly to
equity 2,811,000 2,811,000
Deferred tax
on actuarial
losses (800,120) (800,120)
-------------- ------- --------- -------- -------- ----------- -----------
Total
comprehensive
income for
the year - - - (47,869) 4,695,390 4,647,521
-------------- ------- --------- -------- -------- ----------- -----------
Transactions
with owners in
their capacity
as owners
Issue of
ordinary
shares 37,954 671,798 709,752
-------------- ------- --------- -------- -------- ----------- -----------
Share-based
payments in
year 43,134 43,134
-------------- ------- --------- -------- -------- ----------- -----------
At 31 March
2011 785,335 4,820,086 297,886 326,480 11,294,116 17,523,903
-------------- ------- --------- -------- -------- ----------- -----------
CML Microsystems Plc
Notes to the condensed financial statements
1. Segmental analysis
Reported segments and their results in accordance with IFRS 8,
are based on internal management reporting information that is
regularly reviewed by the chief operating decision maker (C. A.
Gurry). The measurement policies the Group uses for segmental
reporting under IFRS 8 are the same as those used in its financial
statements.
Information about revenue, profit/loss, assets and
liabilities
Unaudited Audited
2011 2010
Semiconductor Equipment Semiconductor
Equipment Components Group Components Group
GBP GBP GBP GBP GBP GBP
---------------- --------- ------------- ------------ --------- ------------- ------------
Revenue
By origination 769,067 34,997,570 35,766,637 721,945 28,256,969 28,978,914
Inter-segmental
revenue - (13,644,991) (13,644,991) - (10,955,775) (10,955,775)
---------------- --------- ------------- ------------ --------- ------------- ------------
Total segmental
revenue 769,067 21,352,579 22,121,646 721,945 17,301,194 18,023,139
---------------- --------- ------------- ------------ --------- ------------- ------------
Profit/(loss)
Segmental result 7,015 2,977,140 2,984,155 (11,483) (71,314) (82,797)
---------------- --------- ------------- --------- -------------
Revaluation of
investment
properties (400,000) -
Finance expense (270,834) (307,344)
Finance income 11,289 4,029
Income tax 359,900 362,698
---------------- --------- ------------- ------------ --------- ------------- ------------
Profit/(loss)
after taxation 2,684,510 (23,414)
---------------- --------- ------------- ------------ --------- ------------- ------------
Assets and
liabilities
Segmental assets 686,913 21,104,688 21,791,601 641,418 20,538,272 21,179,690
---------------- --------- ------------- --------- -------------
Unallocated
corporate
assets
Investment
properties 3,450,000 3,850,000
Properties held
for sale 419,773 419,773 441,408 441,408
------------- -------------
Deferred
taxation 2,534,390 3,096,635
Current tax
receivable 5,581 141,468
---------------- --------- ------------- ------------ --------- ------------- ------------
Consolidated
total assets 28,201,345 28,709,201
---------------- --------- ------------- ------------ --------- ------------- ------------
Segmental
liabilities 113,073 2,411,461 2,524,534 22,232 2,656,913 2,679,145
---------------- --------- ------------- --------- -------------
Unallocated
corporate
liabilities
Deferred
taxation 1,577,253 2,172,206
Current tax
liability 49,244 38,064
Bank loans and
overdrafts 3,919,411 5,968,290
Retirement
benefit
obligation 2,607,000 5,728,000
---------------- --------- ------------- ------------ --------- ------------- ------------
Consolidated
total
liabilities 10,677,442 16,585,705
---------------- --------- ------------- ------------ --------- ------------- ------------
Other segmental information
Unaudited Audited
2011 2010
Semiconductor Semiconductor
Equipment Components Group Equipment Components Group
GBP GBP GBP GBP GBP GBP
------------------ --------- ------------- --------- --------- ------------- ---------
Property, plant
and equipment
additions - 253,036 253,036 415 48,650 49,065
--------- ------------- --------- --------- ------------- ---------
Development cost
additions 70,724 2,715,662 2,786,386 71,931 2,743,135 2,815,066
--------- ------------- --------- --------- ------------- ---------
Depreciation 8,123 313,456 321,579 7,870 652,618 660,488
--------- ------------- --------- --------- ------------- ---------
Amortisation 72,337 3,203,678 3,276,015 72,202 3,677,887 3,750,089
--------- ------------- --------- --------- ------------- ---------
Other significant
non-cash
(income)/expenses - (37,000) (37,000) - (105,000) (105,000)
------------------ --------- ------------- --------- --------- ------------- ---------
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.
Geographical
information
UK Germany Americas Far East Total
GBP GBP GBP GBP GBP
---------------- ----------- ----------- --------- --------- ------------
Unaudited
Year ended 31
March 2011
Revenue by
origination 13,089,263 8,480,848 5,088,589 9,107,937 35,766,637
Inter-segmental
revenue (6,262,733) (7,374,429) - (7,829) (13,644,991)
----------- ----------- --------- --------- ------------
Revenue to third
parties 6,826,530 1,106,419 5,088,589 9,100,108 22,121,646
----------- ----------- --------- --------- ------------
Property, plant
and equipment 5,109,717 81,001 20,920 19,121 5,230,759
----------- ----------- --------- --------- ------------
Investment
properties 3,450,000 - - - 3,450,000
----------- ----------- --------- --------- ------------
Properties held
for sale - - 419,773 - 419,773
----------- ----------- --------- --------- ------------
Goodwill - 3,512,305 - - 3,512,305
----------- ----------- --------- --------- ------------
Development cost 2,029,012 1,595,093 - - 3,624,105
----------- ----------- --------- --------- ------------
Total assets 21,273,261 4,364,616 1,572,651 1,236,758 28,447,282
---------------- ----------- ----------- --------- --------- ------------
Audited
Year ended 31
March 2010
Revenue by
origination 11,003,298 7,174,100 4,373,550 6,427,966 28,978,914
Inter-segmental
revenue (4,809,162) (6,138,276) - (8,337) (10,955,775)
----------- ----------- --------- --------- ------------
Revenue to third
parties 6,194,136 1,035,824 4,373,550 6,419,629 18,023,139
----------- ----------- --------- --------- ------------
Property, plant
and equipment 5,111,636 114,945 58,610 18,677 5,303,868
----------- ----------- --------- --------- ------------
Investment
property 3,850,000 - - - 3,850,000
----------- ----------- --------- --------- ------------
Property held
for sale - - 441,408 - 441,408
----------- ----------- --------- --------- ------------
Goodwill - 3,512,305 - - 3,512,305
----------- ----------- --------- --------- ------------
Development cost 2,661,499 1,527,582 - - 4,189,081
----------- ----------- --------- --------- ------------
Total assets 21,221,729 4,644,453 1,565,384 1,277,635 28,709,201
---------------- ----------- ----------- --------- --------- ------------
2. Dividend paid and proposed
No dividend has been paid in the year end 31 March 2011 or the
year end 31 March 2010. It is proposed to pay a dividend of 3.5p
per Ordinary Share of 5p in respect of the year end 31 March 2011
(2010: Nil per Ordinary Share of 5p in respect of the year end
2010).
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
2011 2010
GBP GBP
---------------------------- ---------- ----------
UK income tax 293,656 (141,734)
Overseas income tax 186,907 131,877
---------------------------- ---------- ----------
Total current tax credit 480,563 (9,857)
Deferred tax (840,463) (352,841)
---------------------------- ---------- ----------
Reported income tax credit (359,900) (362,698)
---------------------------- ---------- ----------
4. Profit/(loss) per share
The calculation of basic and diluted earnings per share is based
on the profit/(loss) attributable to ordinary shareholders, divided
by the weighted average number of shares in issue during the
year.
Weighted Weighted
average average
number of Profit number of Loss
per per
Profit shares share Loss shares share
2011 2011 2011 2010 2010 2010
GBP No p GBP No p
----------------------- ----------- ---------- -------- -------- ---------- -------
Basic profit/(loss) per
share 2,684,510 15,023,279 17.87 (23,414) 14,947,626 (0.16)
----------------------- ----------- ---------- -------- -------- ---------- -------
Diluted profit/(loss) per
share
Basic profit/(loss) per
share 2,684,510 15,023,279 17.87 (23,414) 14,947,626 (0.16)
Dilutive effect of
share options 194,177 (0.23) 21,332 -
----------------------- ----------- ---------- -------- -------- ---------- -------
Diluted profit/(loss)
per share 2,684,510 15,217,456 17.64 (23,414) 14,968,958 (0.16)
----------------------- ----------- ---------- -------- -------- ---------- -------
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 but in view
of the current market conditions the Directors considered it
prudent to reduce the value of the properties by GBP400,000.
6. Analysis of cash flow movement in net debt
Audited Audited Audited Unaudited Unaudited
Net debt Year end Net debt Year end Net debt
at 31 March at 31 March at
31 March 2010 Cash 31 March 2011 Cash 31 March
2009 Flow 2010 Flow 2011
GBP GBP GBP GBP GBP
------------- ------------ ---------- ------------ ---------- ------------
Cash and
Cash
equivalents 2,191,960 1,691,278 3,883,238 2,362,456 6,245,694
Bank loans
and
overdrafts (6,061,705) 93,415 (5,968,290) 2,048,879 (3,919,411)
------------- ------------ ---------- ------------ ---------- ------------
(3,869,745) 1,784,693 (2,085,052) 4,411,335 2,326,283
------------- ------------ ---------- ------------ ---------- ------------
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 2010 financial statements.
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 31 March
2010 is based on the statutory accounts for the financial year
ended 31 March 2010 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 31 March 2011 are
expected to be finalised and signed following approval by the board
of directors on 24 June 2011 and delivered to the Registrar of
Companies following the Company's annual general meeting on 3
August 2011.
The financial information contained in this announcement does
not constitute statutory accounts for the year ended 31 March 2011
or 2010 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 13
June 2011.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SFWFWDFFSESM
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