TIDMCML
RNS Number : 4850S
CML Microsystems PLC
22 November 2011
CML Microsystems Plc
INTERIM RESULTS
CML Microsystems Plc ("CML"), which designs, manufactures and
markets a broad range of semiconductor products, primarily for the
global communication and data storage markets, announces Interim
Results for the six months ended 30 September 2011.
Financial Highlights:
-- Revenues up 9% to GBP12.29m (2010 H1: GBP11.21m)
-- Gross profit up 8% to GBP8.51m (2010 H1: GBP7.83m)
-- Profit before tax up 59% to GBP2.02m (2010 H1: GBP1.27m)
-- Basic EPS up 63% of 9.87p (2010 H1: 6.05p)
-- Net cash position of GBP4.37m (2010 H1: GBP553k) - with bank
borrowings reduced by GBP1.5m to GBP3m
Operational Highlights:
-- Strong revenue growth globally
-- Stable cost base and margins within targets
-- Solid cash flow, improved net cash position
-- Maintained investment levels for key new product development programs
Regarding Outlook, Chris Gurry, Managing Director of CML,
said:
"Trading performance through the first half year was encouraging
and reflected the Group's established multi-year strategy for
sustainable growth.
"Within our three major market areas of wireless, storage and
wireline telecom, we continue to see growth opportunities within
existing customer product portfolios in addition to general
expansion of the overall customer base.
"Following the period end, overall order book levels have
remained healthy although it is possible that the general economic
climate in some regions may affect customer buying patterns or
investment decisions. Despite this, the Board currently anticipates
positive trading conditions to prevail through what is
traditionally a slightly weaker second half."
Enquiries:
CML Microsystems Plc www.cmlmicroplc.com
Chris Gurry, Managing Director Tel: 01621 875 500
Nigel Clark, Financial
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
I am pleased to report that your Company continued to improve
its performance through the opening six-month period of the present
trading year, with increased sales revenue, pre-tax profit and
earnings-per-share the outcome for that period.
Group sales rose to GBP12.29m (2010: GBP11.21m), with gains
posted for each of the principal product market areas, while a
gross profit of GBP8.51m (2010: GBP7.83m) reflects a materially
unchanged gross profit margin.
Profit before tax grew to GBP2.02m (2010: GBP1.27m), while
diluted EPS show an increase to 9.78p per share on the enlarged
share capital (2010: 5.99p).
The Company has continued with steps to re-balance its
debt/asset cash position, resulting in net cash of GBP4.37m (2010:
GBP553k) at the end of the period and a reduction in the
outstanding bank loan to GBP3m (2010: GBP4.5m).
In the period post 30 September the Company sold one of the USA
based properties held for sale for approximately $1m. The proceeds
will be subject to appropriate taxes.
The uncertainties and negative factors that presently affect
many business areas are not helpful to near-term growth, but I
nevertheless believe that subject to unforeseen circumstances, your
Company's results for the current full trading year will meet
present market expectations.
On behalf of your Directors I once again express our
appreciation and thanks to the Group's employees for their efforts
and commitment towards its success.
G W Gurry
Chairman
21 November 2011
Operating and Financial Review
Group revenues for the six months to 30 September 2011 rose to
GBP12.29m representing a 9% increase over the comparable half year
period (2010: GBP11.21m). Semiconductor shipments increased in each
of the three major geographical regions, with the Americas showing
the highest percentage growth, the Far East maintaining its
position as the single largest region and Europe contributing solid
growth.
Group products for use within wireless and storage applications
contributed approximately 83% of overall Group revenues whilst
products sold into wireline telecom markets accounted for close to
12%.
Within the target wireless markets, dominant end applications
continued to include voice and/or data transmission within two-way
radio products, control and data acquisition systems, regional
transport and infrastructure systems, and marine safety
systems.
Flash memory controller chips for use within removable and
embedded solid state storage media dominated revenues from the
storage sector. The Group benefited from the combined effects of
increased shipment volumes to established customers along with a
higher contribution from more recent customer design wins.
Group semiconductor products for telecom applications
experienced high single-digit percentage sales growth across a
range of end applications including point-of-payment terminals,
security alarm panels and medical monitoring devices.
Sales at the Group's equipment division, RDT, increased 17% to
GBP415k (2010: GBP354k) largely as a result of higher export sales
of telemetry and control products for transport applications. Entry
into the M2M market was initiated with the launch of a GPRS modem
and router for industrial users.
The gross margin was maintained at 69% delivering a reported
gross profit of GBP8.51m (2010: GBP7.83m). Distribution and
administration costs of GBP6.52m were very slightly down (2010:
6.64m) and this helped to deliver an operational profit (before
other income, share-based payments and finance costs) of GBP1.99m
against a comparable period figure of GBP1.19m.
Income from other operating activities, principally rental
proceeds from group owned industrial properties fell from GBP169k
to GBP89k due to a lower occupancy rate through the period.
Net finance costs amounted to GBP37k (2009: GBP68k) and a profit
before tax of GBP2.02m was recorded (2010: GBP1.27m).
A combination of improved revenue levels, static gross margin
and tight cost control resulted in positive cash flow of GBP2.04m
through the six months under review. At the period end the Group
had cash reserves of GBP7.38m and reduced bank borrowings of
GBP3.01m.
Summary and outlook
Trading performance through the first half year was encouraging
and reflected the Group's established multi-year strategy for
sustainable growth.
Within our three major market areas of wireless, storage and
wireline telecom, we continue to see growth opportunities within
existing customer product portfolios in addition to general
expansion of the overall customer base.
Important new engineering development activities and partnership
programs, some of which were announced in the prior financial year,
will be sampled through the remainder of the current trading year.
These products are expected to commence meaningful revenue
contributions starting next financial year.
Following the period end, overall order book levels have
remained healthy although it is possible that the general economic
climate in some regions may affect customer buying patterns or
investment decisions. Despite this, the Board currently anticipates
positive trading conditions to prevail through what is
traditionally a slightly weaker second half.
C A Gurry
Managing Director
21 November 2011
Condensed Consolidated Income Statement
Unaudited Unaudited Audited
six months six months Year end
end end
30/09/11 30/09/10 31/03/11
GBP'000 GBP'000 GBP'000
------------------------------------- ---------- ---------- --------
Continuing operations
Revenue 12,293 11,209 22,122
Cost of sales (3,785) (3,380) (6,754)
------------------------------------- ---------- ---------- --------
Gross profit 8,508 7,829 15,368
Distribution and administration
costs (6,521) (6,641) (12,729)
------------------------------------- ---------- ---------- --------
1,987 1,188 2,639
Other operating income 89 169 389
------------------------------------- ---------- ---------- --------
Profit before share-based payments 2,076 1,357 3,028
Share-based payments (24) (22) (43)
------------------------------------- ---------- ---------- --------
Profit after share-based payments 2,052 1,335 2,985
Revaluation of investment properties - - (400)
Finance costs (41) (74) (271)
Finance income 4 6 11
------------------------------------- ---------- ---------- --------
Profit before taxation 2,015 1,267 2,325
Income tax (expense)/credit (489) (363) 360
------------------------------------- ---------- ---------- --------
Profit for period attributable
to equity owners of the parent 1,526 904 2,685
------------------------------------- ---------- ---------- --------
Earnings per share
Basic 9.87p 6.05p 17.87p
------------------------------------- ---------- ---------- --------
Diluted 9.78p 5.99p 17.64p
------------------------------------- ---------- ---------- --------
Condensed Consolidated Statement of Comprehensive Income
Unaudited Unaudited Audited
six months six months Year end
end end
30/09/11 30/09/10 31/03/10
GBP'000 GBP'000 GBP'000
------------------------------------ ---------- ---------- --------
Profit for the period 1,526 904 2,685
Other comprehensive income:
Foreign exchange differences 56 (11) (48)
Actuarial gain on retirement
benefit obligations - - 2,811
Income tax on actuarial loss - - (800)
------------------------------------ ---------- ---------- --------
Other comprehensive income for
the period net of tax 56 (11) 1,963
------------------------------------ ---------- ---------- --------
Total comprehensive income for
the period net of tax attributable
to equity owners of the business 1,582 893 4,648
------------------------------------ ---------- ---------- --------
Condensed Consolidated Statement of Financial Position
Unaudited Unaudited Audited
30/09/11 30/09/10 31/03/11
GBP'000 GBP'000 GBP'000
---------------------------------- --------- --------- --------
Assets
Non-current assets
Property, plant and equipment 5,165 5,266 5,231
Investment properties 3,450 3,850 3,450
Development costs 4,385 3,820 3,624
Goodwill 3,512 3,512 3,512
Deferred tax asset 2,608 2,920 2,534
---------------------------------- --------- --------- --------
19,120 19,368 18,351
---------------------------------- --------- --------- --------
Current assets
Inventories 1,686 1,689 1,666
Trade receivables and prepayments 1,104 2,833 1,513
Current tax assets - 5 5
Cash and cash equivalents 7,383 5,101 6,246
---------------------------------- --------- --------- --------
10,173 9,628 9,430
---------------------------------- --------- --------- --------
Non-current assets classified
as held for
sale - properties 430 426 420
---------------------------------- --------- --------- --------
Total assets 29,723 29,422 28,201
---------------------------------- --------- --------- --------
Liabilities
Current liabilities
Bank loans and overdrafts 3,014 4,548 3,919
Trade and other payables 3,375 3,799 2,525
Current tax liabilities 276 149 49
---------------------------------- --------- --------- --------
6,665 8,496 6,493
---------------------------------- --------- --------- --------
Non-current liabilities
Deferred tax liabilities 1,816 2,160 1,577
Retirement benefit obligation 2,607 5,728 2,607
---------------------------------- --------- --------- --------
4,423 7,888 4,184
---------------------------------- --------- --------- --------
Total liabilities 11,088 16,384 10,677
---------------------------------- --------- --------- --------
Net assets 18,635 13,038 17,524
---------------------------------- --------- --------- --------
Capital and reserves attributable
to equity owners of the parent
Share capital 788 747 785
Share premium 4,872 4,148 4,820
Share-based payments reserve 69 277 298
Foreign exchange reserve 382 363 326
Accumulated profits 12,524 7,503 11,295
---------------------------------- --------- --------- --------
Shareholders' equity 18,635 13,038 17,524
---------------------------------- --------- --------- --------
Condensed Consolidated Cash Flow Statement
Unaudited Unaudited Audited
six months six months Year end
end end
30/09/11 30/09/10 31/03/11
GBP'000 GBP'000 GBP'000
--------------------------------------- ---------- ---------- --------
Operating activities
Profit for the period before
income taxes 2,015 1,267 2,325
Adjustments for:
Depreciation 94 101 321
Amortisation of development costs 1,460 1,557 3,276
Revaluation of investment properties - - 400
Movement in pensions deficit - - (437)
Share-based payments 24 22 43
Interest expense 41 74 144
Interest income (4) (6) (11)
Decrease in working capital 1,239 1,049 926
--------------------------------------- ---------- ---------- --------
Cash flows from operating activities 4,869 4,064 6,987
Income tax (paid)/refunded (118) 43 (328)
--------------------------------------- ---------- ---------- --------
Net cash flows from operating
activities 4,751 4,107 6,659
--------------------------------------- ---------- ---------- --------
Investing activities
Purchase of property, plant and
equipment (33) (69) (253)
Investment in development costs (2,247) (1,253) (2,786)
Disposals of property, plant
and equipment 2 30 32
Interest income 4 6 11
--------------------------------------- ---------- ---------- --------
Net cash flows from investing
activities (2,274) (1,286) (2,996)
--------------------------------------- ---------- ---------- --------
Financing activities
Issue of ordinary shares 55 - 710
Decrease in bank loans and short-term
borrowings (905) (1,273) (2,049)
Dividend paid to Group shareholders (550) - -
Finance cost (41) (74) (144)
--------------------------------------- ---------- ---------- --------
Net cash flows from financing
activities (1,441) (1,347) (1,483)
---------- ---------- --------
Increase in cash and cash equivalents 1,036 1,474 2,180
--------------------------------------- ---------- ---------- --------
Movement in cash and cash equivalents:
At start of year 6,246 3,883 3,883
Increase in cash and cash equivalents 1,036 1,474 2,180
Effects of exchange rate changes 101 (256) 183
--------------------------------------- ---------- ---------- --------
At end of year 7,383 5,101 6,246
--------------------------------------- ---------- ---------- --------
Condensed Consolidated Statement of Changes in Equity
Foreign
Share premium Share-based exchange Accumulated
Share payments reserve profits Total
capital
Unaudited GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
----------------------------- -------- -------------- ------------ --------- ------------ -------
At 1 April 2010 747 4,148 255 374 6,599 12,123
----------------------------- -------- -------------- ------------ --------- ------------ -------
Profit for period 904 904
Other comprehensive
income:
Foreign exchange differences (11) (11)
----------------------------- -------- -------------- ------------ --------- ------------ -------
Total comprehensive
income for the period - - - (11) 904 893
----------------------------- -------- -------------- ------------ --------- ------------ -------
Transactions with
owners in their capacity
as owners:
Share-based payments 22 22
----------------------------- -------- -------------- ------------ --------- ------------ -------
At 30 September 2010 747 4,148 277 363 7,503 13,038
----------------------------- -------- -------------- ------------ --------- ------------ -------
Profit for period 1,781 1,781
Other comprehensive
income:
Foreign exchange differences (37) (37)
Net actuarial profits
recognised directly
to equity 2,811 2,811
Deferred tax on actuarial
losses (800) (800)
----------------------------- -------- -------------- ------------ --------- ------------ -------
Total comprehensive
income for the period - - - (37) 3,792 3,755
----------------------------- -------- -------------- ------------ --------- ------------ -------
Transactions with
owners in their capacity
as owners:
Issue of ordinary
shares 38 672 710
Share-based payments 21 21
----------------------------- -------- -------------- ------------ --------- ------------ -------
At 31 March 2011 785 4,820 298 326 11,295 17,524
----------------------------- -------- -------------- ------------ --------- ------------ -------
Profit for period 1,526 1,526
Other comprehensive
income:
Foreign exchange differences 56 56
----------------------------- -------- -------------- ------------ --------- ------------ -------
Total comprehensive
income for the period - - - 56 1,526 1,582
----------------------------- -------- -------------- ------------ --------- ------------ -------
Transactions with
owners in their capacity
as owners:
Dividend paid (550) (550)
Issue of ordinary
shares 3 52 55
Share-based payments
transferred on cancellation (253) 253 -
Share-based payments 24 24
----------------------------- -------- -------------- ------------ --------- ------------ -------
At 30 September 2011 788 4,872 69 382 12,524 18,635
----------------------------- -------- -------------- ------------ --------- ------------ -------
Notes to the Condensed Financial Statements
1. Segmental analysis
Business segments
Unaudited Unaudited Audited
six months end six months end Year End
30/09/11 30/09/10 31/03/11
Semi-conductor Semi-conductor Semi-conductor
Equipment components Group Equipment components Group Equipment components Group
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue
By origination 415 21,444 21,859 354 18,141 18,495 769 34,998 35,767
Inter-segmental
revenue - (9,566) (9,566) - (7,286) (7,286) - (13,645) (13,645)
------------------ --------- -------------- ------- --------- -------------- ------- --------- -------------- --------
Segmental revenue 415 11,878 12,293 354 10,855 11,209 769 21,353 22,122
------------------ --------- -------------- ------- --------- -------------- ------- --------- -------------- --------
Profit/(loss)
Segmental result 4 2,048 2,052 (12) 1,347 1,335 7 2,978 2,985
------------------ --------- -------------- --------- -------------- --------- --------------
Revaluation of
investment
properties - - (400)
Net financial
income (37) (68) (260)
Income tax (489) (363) 360
------- ------- --------
Profit after
taxation 1,526 904 2,685
------- ------- --------
Assets and
liabilities
Segmental assets 22,629 606 23,235 626 21,595 22,221 687 21,105 21,792
------------------ --------- -------------- --------- -------------- --------- --------------
Unallocated
corporate
assets
Investment
property
(Including held
for sale) 3,880 4,276 3,870
Deferred taxation 2,608 2,920 2,534
Current tax
receivable - 5 5
------- ------- --------
Consolidated
total assets 29,723 29,422 28,201
------- ------- --------
Segmental
liabilities 3,284 91 3,375 39 3,760 3,799 113 2,412 2,525
------------------ --------- -------------- --------- -------------- --------- --------------
Unallocated
corporate
assets
Deferred taxation 1,816 2,160 1,577
Current tax
liability 276 149 49
Bank loans and
overdrafts 3,014 4,548 3,919
Retirement benefit
obligation 2,607 5,728 2,607
------- ------- --------
Consolidated
total liabilities 11,088 16,384 10,677
------- ------- --------
Other segmental
information
Property, plant
and equipment
additions 32 1 33 - 69 69 - 253 253
------------------ --------- -------------- ------- --------- -------------- ------- --------- -------------- --------
Development cost
additions 2,206 41 2,247 33 1,220 1,253 71 2,715 2,786
------------------ --------- -------------- ------- --------- -------------- ------- --------- -------------- --------
Depreciation 90 4 94 4 97 101 8 313 321
------------------ --------- -------------- ------- --------- -------------- ------- --------- -------------- --------
Amortisation 1,427 33 1,460 32 1,525 1,557 72 3,204 3,276
------------------ --------- -------------- ------- --------- -------------- ------- --------- -------------- --------
Other significant
non-cash
(income)/expenses - - - - - - - (37) (37)
------------------ --------- -------------- ------- --------- -------------- ------- --------- -------------- --------
Geographical segments
UK Germany Americas Far East Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------------- ------------------ ------- -------- -------- --------
Unaudited
6 month ended 30 September
2011
Revenue by origination 7,182 6,275 2,887 5,515 21,859
Inter-segmental revenue (4,244) (5,295) - (27) (9,566)
-------------------------------- ------------------ ------- -------- -------- --------
Revenue to third parties 2,938 980 2,887 5,488 12,293
-------------------------------- ------------------ ------- -------- -------- --------
Property, plant and equipment 5,062 67 16 20 5,165
-------------------------------- ------------------ ------- -------- -------- --------
Investment properties including
held for sale 3,450 - 430 - 3,880
-------------------------------- ------------------ ------- -------- -------- --------
Goodwill - 3,512 - - 3,512
-------------------------------- ------------------ ------- -------- -------- --------
Development cost 2,321 2,064 - - 4,385
-------------------------------- ------------------ ------- -------- -------- --------
Total assets 21,495 4,920 1,770 1,538 29,723
-------------------------------- ------------------ ------- -------- -------- --------
Unaudited
6 month ended 30 September
2010
Revenue by origination 6,878 4,514 2,657 4,446 18,495
Inter-segmental revenue (3,271) (4,014) - (1) (7,286)
-------------------------------- ------------------ ------- -------- -------- --------
Revenue to third parties 3,607 500 2,657 4,445 11,209
-------------------------------- ------------------ ------- -------- -------- --------
Property, plant and equipment 5,103 84 52 27 5,266
-------------------------------- ------------------ ------- -------- -------- --------
Investment properties including
held for sale 3,850 - 426 - 4,276
-------------------------------- ------------------ ------- -------- -------- --------
Goodwill - 3,512 - - 3,512
-------------------------------- ------------------ ------- -------- -------- --------
Development cost 2,390 1,430 - - 3,820
-------------------------------- ------------------ ------- -------- -------- --------
Total assets 20,764 4,950 1,835 1,873 29,422
-------------------------------- ------------------ ------- -------- -------- --------
Audited
Year ended 31 March 2011
Revenue by origination 13,089 8,481 5,089 9,108 35,767
Inter-segmental revenue (6,263) (7,374) - (8) (13,645)
-------------------------------- ------------------ ------- -------- -------- --------
Revenue to third parties 6,826 1,107 5,089 9,100 22,122
-------------------------------- ------------------ ------- -------- -------- --------
Property, plant and equipment 5,110 81 21 19 5,231
-------------------------------- ------------------ ------- -------- -------- --------
Investment properties including
held for sale 3,450 - 420 - 3,870
-------------------------------- ------------------ ------- -------- -------- --------
Goodwill - 3,512 - - 3,512
-------------------------------- ------------------ ------- -------- -------- --------
Development cost 2,029 1,595 - - 3,624
-------------------------------- ------------------ ------- -------- -------- --------
Total assets 21,027 4,364 1,573 1,237 28,201
-------------------------------- ------------------ ------- -------- -------- --------
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. The
measurement policies the Group uses for segmental reporting under
IFRS 8 are the same as those used in its financial statements.
2. Dividend paid and proposed
A dividend of 3.5p per 5p ordinary share in respect of the year
end 31 March 2011 was paid on 5 August 2011 (2010: GBPNil per
ordinary share of 5p in respect of the year ended 31 March 2010).
No dividend is proposed in respect of the six months period ended
30 September 2011(2010: GBPNil per ordinary share of 5p in respect
of the period end 30 September 2010).
3. Income tax
The Directors consider that tax will be payable at varying rates
according to the country of incorporation of its subsidiary and
have provided on that basis.
Unaudited Unaudited Audited
six months six months Year end
end end
30/09/11 30/09/10 31/03/11
GBP'000 GBP'000 GBP'000
------------------------------------ ---------- ---------- --------
UK income tax charge 170 83 294
Overseas income tax charge 175 140 186
------------------------------------ ---------- ---------- --------
Total current tax charge 345 223 480
Deferred tax charge/(credit) 144 140 (840)
------------------------------------ ---------- ---------- --------
Reported income tax charge/(credit) 489 363 (360)
------------------------------------ ---------- ---------- --------
4. Earnings per share
The calculation of basic and diluted earnings per share is based
on the profit attributable to ordinary shareholders divided by the
weighted average number of shares in issue during the year.
Ordinary 5p shares
Weighted average Diluted
number number
---------------------------- ------------------------------ ------------------
Six months end 30 September
2011 15,467,789 15,600,977
---------------------------- ------------------------------ ------------------
Six months end 30 September
2010 14,947,626 15,091,370
---------------------------- ------------------------------ ------------------
Year end 31 March 2011 15,023,279 15,217,456
---------------------------- ------------------------------ ------------------
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 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
Net debt 6m end Net cash 6m end Net cash 6m end Net cash
at at at at
01/04/10 30/09/10 30/09/10 31/03/11 31/03/11 30/09/11 30/09/11
Cash flow Cash flow Cash flow
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
-------------------------- -------- --------- -------- --------- -------- --------- --------
Cash and cash equivalents 3,883 1,218 5,101 1,145 6,246 1,137 7,383
Bank loans and overdrafts (5,968) 1,420 (4,548) 629 (3,919) 905 (3,014)
-------------------------- -------- --------- -------- --------- -------- --------- --------
(2,085) 2,638 553 1,774 2,327 2,042 4,369
-------------------------- -------- --------- -------- --------- -------- --------- --------
The cash flow above is a combination of the actual cash flow and
the exchange movement.
7. Retirement benefit obligations
The directors have not obtained an actuarial report in respect
of the defined benefit pension scheme for the purpose of this Half
Yearly Report.
8. 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 would 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.
9. Directors' statement pursuant to the Disclosure and Transparency Rules
The Directors confirm that, to the best of their knowledge:
a. the condensed 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 profit of the Company
and the undertakings included in the consolidation taken as a
whole; and
b. the condensed set of financial statements have been prepared
in accordance with IAS 34 "Interim Financial Reporting"; and
c. 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.
10. Basis of preparation
The basis of preparation and accounting policies used in
preparation of the Half Yearly Financial Report are the same
accounting policies set out in the year ended 31 March 2011
financial statements.
11. General
Other than already stated within the Chairman's statement and
the operating and financial review there have been no important
events during the first six months of the financial year that have
impacted this Half Yearly Report.
There have been no related party transactions or changes in
related party transactions described in the latest Annual Report
that could have a material effect on the financial position or
performance of the Group in the first six months of the financial
year.
The principal risks and uncertainties within the business are
contained within this report in note 8 above.
In the segmental analysis (note 1) 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.
This interim management report includes a fair review of the
information required by DTR 4.2.7 (indication of important events
and their impact, and description of principal risks and
uncertainties for the remaining six months of the financial
year).
This Half Yearly Report does not include all the information and
disclosures required in the Annual Report, and should be read in
conjunction with the consolidated Annual Report for the year ended
31 March 2011.
The financial information contained in this Half Yearly Report
has been prepared using International Financial Reporting Standards
as adopted by the European Union. This Half Yearly Report does not
constitute statutory accounts as defined by Section 434 of the
Companies Act 2006. The financial information for the year ended 31
March 2011 is based on the statutory accounts for the financial
year ended 31 March 2011 that have been filed with the Registrar of
Companies and on which the auditors gave an unqualified audit
opinion. The auditors' report on those accounts did not contain a
statement under Section 498(2) or (3) of the Companies Act 2006.
This Half Yearly Report has not been audited or reviewed by the
Group Auditors.
A copy of this Half Yearly Report can be viewed on the company
website www.cmlmicroplc.com.
12. Approval
The Directors approved this Half Yearly Report on 21 November
2011.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR PGGBGGUPGGQG
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