TIDMCML
RNS Number : 3327T
CML Microsystems PLC
19 November 2013
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 2013.
Financial Highlights
-- Record first half results
-- Group revenues up 5% to GBP12.99m (2012: GBP12.39m)
-- Gross profit up 7% to GBP9.21m (2012: GBP8.57m)
-- Profit before tax up 29% to GBP3.21m (2012: GBP2.48m)
-- Diluted EPS up 38% to 15.37p (2012: 11.13p)
-- Net cash of GBP9.7m (2012: GBP6.5m)
Operational Highlights
-- Storage revenues up c. 7% as customers transitioned to
higher-performance flash memory controller products
-- Wireless semiconductors revenues up c. 10% due to robust
professional and commercial wireless communication markets
-- Successful exit of Radio Data Technology (RDT) completed on
schedule and at minimum cost leaving the Group as a pure-play
fabless semiconductor business
-- Continued adoption of industrial controllers with positive feedback from sampling customers
-- Expansion of the RF product portfolio to drive growth in wireless markets
Chris Gurry, Managing Director of CML, said:
"The first half of the year has seen record half year results
and reflects the Group's focus on delivering sustainable growth.
Our key addressable markets of storage and wireless each exhibit
compelling growth opportunities.
"Order book visibility continues to be relatively short term and
raw material lead times can extend to 16 weeks in some instances.
This could affect the timing of revenue recognition towards the end
of what is a traditionally weaker second half period. That said,
the Board's expectation remains for a full year of firm growth in
profitability to 31 March 2014."
CML Microsystems Plc www.cmlmicroplc.com
Chris Gurry, Managing Director Tel: 01621 875 500
Nigel Clark, Financial Director
Cenkos Securities Plc Tel: 020 7397 8900
Jeremy Warner Allen (Sales)
Max Hartley (Corporate Finance)
SP Angel Corporate Finance Tel: 020 3463 2260
LLP
Jeff Keating
Walbrook PR Ltd Tel: 020 7933 8780 or cml@walbrookpr.com
Paul McManus Mob: 07980 541 893
Helen Cresswell Mob: 07841 917 679
Chairman and Chief Executive's statement and operational and
financial review
Introduction
I am pleased to report a further improvement in the Group's
operating performance through the first six-month trading period to
30 September 2013. A steady increase in revenues, coupled with a
diligent focus on product and operational cost management, has
contributed to a 5% uplift in revenues and a 29% advance in profit
before tax being recorded against the comparable period.
Unfortunately, the financial and operational progress achieved
has been overshadowed in recent weeks following the death of two
Board members.
Our founder and Non-Executive Chairman, George Gurry passed away
on 5 October 2013. Although he had announced plans to vacate the
Chairman's role by the end of this financial year, the Board was
expecting to benefit from his wide ranging knowledge and experience
for some time. An inspirational leader, he was highly regarded by
those that knew him and the business legacy he leaves is evidence
of both his success and the gratitude the Group owes to his vision
and commitment for over 45 years.
Unexpectedly, George Bates, Non-Executive Director, passed away
on 21 October 2013. George joined the Group in 1971 and over the
following three and a half decades made an immeasurable
contribution to the Group's engineering activities. In March 2006
he relinquished his executive engineering position but remained on
the Board in a non-executive capacity. His considered and pragmatic
approach will be sorely missed.
Over the coming months the Board will fully assess the situation
and take appropriate action to ensure it has the right mix of
skills and experience to continue executing on its sustainable
growth strategy.
Equipment segment
As reported at the time of the full-year results in June 2013,
the Board took the decision to exit from the Group's loss-making
equipment segment, Radio Data Technology Ltd (RDT), and completed
the exit during the first half of the current financial year.
Following the sale of certain IP and assets to third parties, RDT
went into liquidation on 13 August 2013. As a consequence, the
Group now has only one operating segment, semiconductors, and this
statement and operational review refers to the results of the
continuing operations. A note in the condensed consolidated income
statement highlights the loss from discontinued operations and
notes 1 and 4 of the condensed consolidated financial statements
contain further detailed breakdowns.
Operational and financial review
Revenues from continuing operations increased year on year by
almost 5% to GBP12.99m (2012: GBP12.39m) driven by progress in the
Group's two key semiconductor market areas, storage and
wireless.
Storage revenues advanced by close to 7% as a number of
customers transitioned to higher-performance flash memory
controller products. The Group also benefitted from the first full
reporting period where its SATA interface controllers were in mass
production.
Revenues from the sale of semiconductors into professional and
commercial wireless applications improved by approximately 10%. The
growth was driven by increased shipments of digital baseband
products and high performance RF ICs.
Telecom revenues were down approximately 5% but remained broadly
in line with expectations.
Geographically, the improvement in sales revenues was not
attributable to any one single area, with increases posted in all
three major regions; the Far East, the Americas and Europe.
Gross margins improved to 71% (2012: 69%) largely as a result of
product mix, leading to a reported gross profit of GBP9.21m (2012:
GBP8.57m), an increase of just over 7% year on year. Distribution
and administration costs were fractionally lower at GBP6.16m (2012:
GBP6.18m) driving a 28% improvement in operational profits (before
other income, share-based payments and net finance effects) to
GBP3.06m (2012: GBP2.39m).
Other operating income rose to GBP192k (2012: GBP124k)
reflecting the increased occupancy of group owned non--operational
commercial properties.
There were no finance costs during the period and a small
finance income was reported of GBP35k (2012: GBP5k).
Profit before tax increased by 29% to GBP3.21m (2012:
GBP2.48m).
Once again the Group posted a pleasing performance in terms of
cash generation, despite high levels of investment in new product
development activities, the repayment of all bank loans and the
payment of an GBP873k cash dividend (2012: GBP631k). At 30
September 2013, the Group had net cash reserves of GBP9.74m (2012:
GBP6.51).
Diluted earnings per share increased by 38% to 15.37p (2012:
11.13p) and shareholders' equity rose to GBP22.94m (2012:
GBP20.12m).
Summary and outlook
Performance through the first half year was in line with both
management and market expectations for firm improvement. The exit
from the equipment segment was completed on schedule and at minimum
cost leaving the Group focused as a pure-play fabless semiconductor
business.
Our key addressable markets of storage and wireless each exhibit
compelling growth opportunities. Within storage we expect adoption
of our industrial SATA controller to continue whilst the early
feedback from sampling customers with our new industrial SD
controller has been positive. For our target wireless markets, we
expect the growth drivers to be digital radio technology along with
opportunities for chip-set design wins within data centric
applications. The expansion of the RF product portfolio is a key
catalyst in this regard. In short, engineering development
activities are being targeted to underpin the sustainable growth
strategy that has been communicated in recent years.
Order book visibility continues to be relatively short term and
raw material lead times can extend to 16 weeks in some instances.
This could affect the timing of revenue recognition towards the end
of what is a traditionally weaker second half period. That said,
the Board's expectation remains for a full year of firm growth in
profitability to 31 March 2014.
On behalf of the Board, I would like to express sincere thanks
and appreciation to our employees for the commitment and loyalty
they continue to demonstrate and, without whom, success would not
be possible.
It remains for me to convey my appreciation to all Group
stakeholders and friends who have offered their support in recent
weeks following the loss of our founder. He set high standards for
business acumen, ethics and achievement that are embedded across
the Group and will remain a constant reference as we move
forward.
C. A. Gurry
Chairman and Chief Executive
19 November 2013
Condensed consolidated income statement
for the six months ended 30 September 2013
Unaudited Unaudited Audited
6 months end 6 months end Year end
30/09/13 30/09/12 31/03/13
GBP'000 GBP'000 GBP'000
-------------------------------------------------------- ------------ ------------ --------
Continuing operations
Revenue 12,989 12,390 24,648
Cost of sales (3,777) (3,825) (7,313)
-------------------------------------------------------- ------------ ------------ --------
Gross profit 9,212 8,565 17,335
Distribution and administration costs (6,156) (6,180) (12,131)
-------------------------------------------------------- ------------ ------------ --------
3,056 2,385 5,204
Other operating income 192 124 297
-------------------------------------------------------- ------------ ------------ --------
Profit before share-based payments 3,248 2,509 5,501
Share-based payments (69) (38) (102)
-------------------------------------------------------- ------------ ------------ --------
Profit after share-based payments 3,179 2,471 5,399
Finance costs - - -
Finance income 35 5 55
-------------------------------------------------------- ------------ ------------ --------
Profit before taxation 3,214 2,476 5,454
Income tax expense (710) (638) (1,017)
-------------------------------------------------------- ------------ ------------ --------
Profit after taxation from continuing operations 2,504 1,838 4,437
Profit/(loss) from discontinued operations (see note 4) - (68) (383)
-------------------------------------------------------- ------------ ------------ --------
Profit for period attributable to equity owners of
the parent 2,504 1,770 4,054
-------------------------------------------------------- ------------ ------------ --------
Basic earnings per share
From continuing operations 15.73p 11.63p 28.01p
-------------------------------------------------------- ------------ ------------ --------
From profit for the year 15.73p 11.20p 25.59
-------------------------------------------------------- ------------ ------------ --------
From discontinued operations - (0.43p) (2.42p)
-------------------------------------------------------- ------------ ------------ --------
Diluted earning per share
From continuing operations 15.37p 11.56p 27.56p
-------------------------------------------------------- ------------ ------------ --------
From profit for the year 15.37p 11.13p 25.18p
-------------------------------------------------------- ------------ ------------ --------
From discontinued operations - (0.43p) (2.38p)
-------------------------------------------------------- ------------ ------------ --------
Condensed consolidated statement of comprehensive income
for the six months ended 30 September 2013
Unaudited Unaudited Audited
6 months end 6 months end Year end
30/09/13 30/09/12 31/03/13
GBP'000 GBP'000 GBP'000
-------------------------------------------------------------------------------- ------------ ------------ --------
Profit for the period 2,504 1,770 4,054
Other comprehensive income:
Foreign exchange differences (214) (65) 180
Actuarial loss on retirement benefit obligations - - (1,768)
Income tax on actuarial loss - - 407
-------------------------------------------------------------------------------- ------------ ------------ --------
Other comprehensive income for the period net of tax (214) (65) (1,181)
-------------------------------------------------------------------------------- ------------ ------------ --------
Total comprehensive income for the period net of tax attributable to equity
owners of the
business 2,290 1,705 2,873
-------------------------------------------------------------------------------- ------------ ------------ --------
Condensed consolidated statement of financial position
as at 30 September 2013
Unaudited Unaudited Audited
30/09/13 30/09/12 31/03/13
GBP'000 GBP'000 GBP'000
------------------------------------------------------------ --------- --------- --------
Assets
Non-current assets
Property, plant and equipment 5,025 5,132 5,094
Investment properties 3,450 3,450 3,450
Development costs 5,611 4,372 4,674
Goodwill 3,512 3,512 3,512
Deferred tax asset 2,242 2,398 2,738
------------------------------------------------------------ --------- --------- --------
19,840 18,864 19,468
------------------------------------------------------------ --------- --------- --------
Current assets
Inventories 1,536 2,017 1,692
Trade receivables and prepayments 4,187 2,693 2,522
Current tax assets - - 139
Cash and cash equivalents 9,737 7,864 9,323
------------------------------------------------------------ --------- --------- --------
15,460 12,574 13,676
------------------------------------------------------------ --------- --------- --------
Non-current assets classified as held for sale - properties 103 103 110
------------------------------------------------------------ --------- --------- --------
Total assets 35,403 31,541 33,254
------------------------------------------------------------ --------- --------- --------
Liabilities
Current liabilities
Bank loans and overdrafts - 1,354 338
Trade and other payables 3,863 3,604 3,308
Current tax liabilities 422 255 57
------------------------------------------------------------ --------- --------- --------
4,285 5,213 3,703
------------------------------------------------------------ --------- --------- --------
Non-current liabilities
Deferred tax liabilities 2,058 1,671 2,064
Retirement benefit obligation 6,122 4,542 6,122
------------------------------------------------------------ --------- --------- --------
8,180 6,213 8,186
------------------------------------------------------------ --------- --------- --------
Total liabilities 12,465 11,426 11,889
------------------------------------------------------------ --------- --------- --------
Net assets 22,938 20,115 21,365
------------------------------------------------------------ --------- --------- --------
Capital and reserves attributable to equity owners of
the parent
Share capital 798 793 794
Share premium 5,060 4,959 4,977
Share-based payments reserve 240 146 171
Foreign exchange reserve 299 268 513
Accumulated profits 16,541 13,949 14,910
------------------------------------------------------------ --------- --------- --------
Shareholders' equity 22,938 20,115 21,365
------------------------------------------------------------ --------- --------- --------
Condensed consolidated cash flow statements
for the six months ended 30 September 2013
Unaudited Unaudited Audited
6 months end 6 months end Year end
30/09/13 30/09/12 31/03/13
GBP'000 GBP'000 GBP'000
---------------------------------------------------------------------- ------------ ------------ --------
Operating activities
Profit for the period before income taxes and discontinued activities 3,217 2,408 5,071
Adjustments for:
Depreciation 124 109 242
Amortisation of development costs 1,109 1,146 2,517
Movement in pensions deficit - - (188)
Share-based payments 69 38 102
Finance income (35) (5) (24)
Increase in working capital (959) (362) (164)
---------------------------------------------------------------------- ------------ ------------ --------
Cash flows from operating activities 3,525 3,334 7,556
Income tax refunded/(paid) 65 19 (71)
---------------------------------------------------------------------- ------------ ------------ --------
Net cash flows from operating activities 3,590 3,353 7,485
---------------------------------------------------------------------- ------------ ------------ --------
Investing activities
Purchase of property, plant and equipment (58) (88) (179)
Investment in development costs (2,067) (1,460) (3,048)
Disposals of property, plant and equipment 4 - -
Finance income 35 5 24
---------------------------------------------------------------------- ------------ ------------ --------
Net cash flows from investing activities (2,086) (1,543) (3,203)
---------------------------------------------------------------------- ------------ ------------ --------
Financing activities
Issue of ordinary shares 87 92 111
Decrease in bank loans and short-term borrowings (338) (1,146) (2,163)
Dividend paid to Group shareholders (873) (631) (631)
---------------------------------------------------------------------- ------------ ------------ --------
Net cash flows from financing activities (1,124) (1,685) (2,683)
---------------------------------------------------------------------- ------------ ------------ --------
Increase in cash and cash equivalents 380 125 1,599
---------------------------------------------------------------------- ------------ ------------ --------
Movement in cash and cash equivalents:
At start of period/year 9,323 7,742 7,742
Increase in cash and cash equivalents 380 125 1,599
Effects of exchange rate changes 34 (3) (18)
---------------------------------------------------------------------- ------------ ------------ --------
At end of period/year 9,737 7,864 9,323
---------------------------------------------------------------------- ------------ ------------ --------
Condensed consolidated statement of changes in equity
for the six months ended 30 September 2013
Foreign
Share Share Share-based exchange Accumulated
capital premium payments reserve profits Total
Unaudited GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------------------------------------- ------- ------- ----------- -------- ----------- -------
At 31 March 2012 788 4,872 108 333 12,809 18,910
------------------------------------------------------- ------- ------- ----------- -------- ----------- -------
Profit for period 1,770 1,770
Other comprehensive income:
Foreign exchange differences (65) (65)
------------------------------------------------------- ------- ------- ----------- -------- ----------- -------
Total comprehensive income for the period - - - (65) 1,770 1,705
------------------------------------------------------- ------- ------- ----------- -------- ----------- -------
Transactions with owners in their capacity as owners:
Dividend paid (631) (631)
Issue of ordinary shares 5 87 92
------------------------------------------------------- ------- ------- ----------- -------- ----------- -------
Total of transactions with owners in their capacity as
owners: 5 87 - - (631) (539)
Share-based payments 38 38
------------------------------------------------------- ------- ------- ----------- -------- ----------- -------
At 30 September 2012 793 4,959 146 268 13,948 20,114
------------------------------------------------------- ------- ------- ----------- -------- ----------- -------
Profit for period 2,284 2,284
Other comprehensive income:
Foreign exchange differences 245 245
Actuarial loss on retirement benefit obligation (1,768) (1,768)
Deferred tax on actuarial losses 407 407
------------------------------------------------------- ------- ------- ----------- -------- ----------- -------
Total comprehensive income for the period - - - 245 923 1,168
------------------------------------------------------- ------- ------- ----------- -------- ----------- -------
Transactions with owners in their capacity as owners:
Issue of ordinary shares 1 18 19
------------------------------------------------------- ------- ------- ----------- -------- ----------- -------
Total of transactions with owners in their capacity as
owners: 1 18 - - - 19
------------------------------------------------------- ------- ------- ----------- -------- ----------- -------
Share-based payments 64 64
Cancelation/transfer of share-based payments (39) 39 -
------------------------------------------------------- ------- ------- ----------- -------- ----------- -------
At 31 March 2013 794 4,977 171 513 14,910 21,365
------------------------------------------------------- ------- ------- ----------- -------- ----------- -------
Profit for period 2,504 2,504
Other comprehensive income:
Foreign exchange differences (214) (214)
------------------------------------------------------- ------- ------- ----------- -------- ----------- -------
Total comprehensive income for the period - - - (214) 2,504 2,290
------------------------------------------------------- ------- ------- ----------- -------- ----------- -------
Transactions with owners in their capacity as owners:
Dividend paid (873) (873)
Issue of ordinary shares 4 83 87
------------------------------------------------------- ------- ------- ----------- -------- ----------- -------
Total of transactions with owners in their capacity as
owners: 4 83 - - (873) (786)
------------------------------------------------------- ------- ------- ----------- -------- ----------- -------
Share-based payments 69 69
------------------------------------------------------- ------- ------- ----------- -------- ----------- -------
At 30 September 2013 798 5,060 240 299 16,541 22,938
------------------------------------------------------- ------- ------- ----------- -------- ----------- -------
Notes to the condensed consolidated financial statements
1 Segmental analysis
Business segments
Unaudited Unaudited Audited
6 months end 6 months end Year end
30/09/13 30/09/12 31/03/13
------------ ---------- ------- ------------ ---------- ------- ------------ ---------- --------
Semi- Semi- Semi-
Discontinued conductor Discontinued conductor Discontinued 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 282 21,497 21,779 308 20,824 21,132 590 40,494 41,084
Inter-segmental
revenue - (8,508) (8,508) - (8,434) (8,434) - (15,846) (15,846)
---------------- ------------ ---------- ------- ------------ ---------- ------- ------------ ---------- --------
Segmental
revenue 282 12,989 13,271 308 12,390 12,698 590 24,648 25,238
---------------- ------------ ---------- ------- ------------ ---------- ------- ------------ ---------- --------
Profit/(loss)
Segmental result 3 3,179 3,182 (68) 2,471 2,403 (383) 5,399 5,016
---------------- ------------ ---------- ------------ ---------- ------------ ----------
Net financial
income 35 5 55
Income tax (713) (638) (1,017)
------- ------- --------
Profit after
taxation 2,504 1,770 4,054
------- ------- --------
Assets and
liabilities
Segmental assets - 29,608 29,608 659 24,931 25,590 272 26,545 26,817
---------------- ------------ ---------- ------------ ---------- ------------ ----------
Unallocated
corporate assets
Investment
property
(including held
for sale) 3,553 3,553 3,560
Deferred
taxation 2,242 2,398 2,738
Current tax
receivable - - 139
------- ------- --------
Consolidated
total assets 35,403 31,541 33,254
------- ------- --------
Segmental
liabilities - 3,863 3,863 298 3,306 3,604 228 3,080 3,308
---------------- ------------ ---------- ------------ ---------- ------------ ----------
Unallocated
corporate assets
Deferred
taxation 2,058 1,671 2,063
Current tax
liability 422 255 57
Bank loans and
overdrafts - 1,354 338
Retirement
benefit
obligation 6,122 4,542 6,122
------- ------- --------
Consolidated
total
liabilities 12,465 11,426 11,888
------- ------- --------
Other segmental
information
Property, plant
and equipment
additions - 58 58 - 88 88 - 179 179
---------------- ------------ ---------- ------- ------------ ---------- ------- ------------ ---------- --------
Development cost
additions - 2,067 2,067 35 1,425 1,460 59 2,989 3,048
---------------- ------------ ---------- ------- ------------ ---------- ------- ------------ ---------- --------
Depreciation - 124 124 1 108 109 1 241 242
---------------- ------------ ---------- ------- ------------ ---------- ------- ------------ ---------- --------
Amortisation - 1,109 1,109 32 1,114 1,146 171 2,346 2,517
---------------- ------------ ---------- ------- ------------ ---------- ------- ------------ ---------- --------
Other
significant
non-cash income - - - - - - - 188 188
---------------- ------------ ---------- ------- ------------ ---------- ------- ------------ ---------- --------
Geographical segments
UK Germany Americas Far East Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
---------------------------------------------- ------- ------- -------- -------- --------
Unaudited
Six months ended 30 September 2013
Revenue by origination 6,610 6,956 2,981 5,232 21,779
Inter-segmental revenue (2,870) (5,638) - - (8,508)
---------------------------------------------- ------- ------- -------- -------- --------
Revenue to third parties 3,740 1,318 2,981 5,232 13,271
---------------------------------------------- ------- ------- -------- -------- --------
Property, plant and equipment 4,826 70 123 6 5,025
---------------------------------------------- ------- ------- -------- -------- --------
Investment properties including held for sale 3,450 - 103 - 3,553
---------------------------------------------- ------- ------- -------- -------- --------
Goodwill - 3,512 - - 3,512
---------------------------------------------- ------- ------- -------- -------- --------
Development cost 2,148 3,463 - - 5,611
---------------------------------------------- ------- ------- -------- -------- --------
Total assets 23,918 7,134 1,930 2,421 35,403
---------------------------------------------- ------- ------- -------- -------- --------
Unaudited
Six months ended 30 September 2012
Revenue by origination 6,121 6,407 3,106 5,498 21,132
Inter-segmental revenue (3,134) (5,300) - - (8,434)
---------------------------------------------- ------- ------- -------- -------- --------
Revenue to third parties 2,987 1,107 3,106 5,498 12,698
---------------------------------------------- ------- ------- -------- -------- --------
Property, plant and equipment 4,926 58 134 14 5,132
---------------------------------------------- ------- ------- -------- -------- --------
Investment properties including held for sale 3,450 - 103 - 3,553
---------------------------------------------- ------- ------- -------- -------- --------
Goodwill - 3,512 - - 3,512
---------------------------------------------- ------- ------- -------- -------- --------
Development cost 2,029 2,343 - - 4,372
---------------------------------------------- ------- ------- -------- -------- --------
Total assets 22,176 5,894 1,562 1,909 31,541
---------------------------------------------- ------- ------- -------- -------- --------
Audited
Year ended 31 March 2013
Revenue by origination 13,383 11,403 6,259 10,039 41,084
Inter-segmental revenue (6,245) (9,601) - - (15,846)
---------------------------------------------- ------- ------- -------- -------- --------
Revenue to third parties 7,138 1,802 6,259 10,039 25,238
---------------------------------------------- ------- ------- -------- -------- --------
Property, plant and equipment 4,888 60 136 10 5,094
---------------------------------------------- ------- ------- -------- -------- --------
Investment properties including held for sale 3,450 - 110 - 3,560
---------------------------------------------- ------- ------- -------- -------- --------
Goodwill - 3,512 - - 3,512
---------------------------------------------- ------- ------- -------- -------- --------
Development cost 1,960 2,714 - - 4,674
---------------------------------------------- ------- ------- -------- -------- --------
Total assets 25,088 5,135 1,404 1,627 33,254
---------------------------------------------- ------- ------- -------- -------- --------
On 13 August 2013 Radio Data Technology Ltd which represents
100% of the equipment segment went into liquidation and
consequently after that date the Group only has one segment.
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 5.5p per 5p ordinary share in respect of the year
ended 31 March 2013 was paid on 2 August 2013 (2012: 4.0p per
ordinary share of 5p in respect of the year ended 31 March 2012).
No dividend is proposed in respect of the six months period ended
30 September 2013 (2012: GBPNil per ordinary share of 5p in respect
of the period ended 30 September 2012).
3 Income tax
The Directors consider that tax will be payable at varying rates
according to the country of incorporation of its subsidiary
undertakings and have provided on that basis.
Unaudited Unaudited Audited
6 months end 6 months end Year end
30/09/13 30/09/12 31/03/13
GBP'000 GBP'000 GBP'000
------------------------------ ------------ ------------ --------
UK income tax charge/(credit) - - (142)
Overseas income tax charge 174 326 382
------------------------------ ------------ ------------ --------
Total current tax charge 174 326 240
Deferred tax charge 536 312 777
------------------------------ ------------ ------------ --------
Reported income tax charge 710 638 1,017
------------------------------ ------------ ------------ --------
4 Discontinued operations
On 13 August 2013 Radio Data Technology Ltd went into
liquidation and consequently qualifies as a discontinued operation.
The results of the discontinued operation which have been included
in the consolidated income statement are presented below:
6 months end 6 months end Year end
30/09/13 30/09/12 31/03/13
GBP'000 GBP'000 GBP'000
------------------------------------------- ------------ ------------ --------
Revenue 282 308 590
Cost of sales (171) (140) (361)
------------------------------------------- ------------ ------------ --------
Gross profit 111 168 229
Distribution and administration costs (108) (236) (612)
------------------------------------------- ------------ ------------ --------
Profit/(loss) before taxation 3 (68) -
Taxation (3) - -
------------------------------------------- ------------ ------------ --------
Profit/(loss) from discontinued operations - (68) (383)
------------------------------------------- ------------ ------------ --------
5 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 ended 30 September 2013 15,915,946 16,296,334
----------------------------------- ---------- ----------
Six months ended 30 September 2012 15,809,707 15,903,421
----------------------------------- ---------- ----------
Year end 31 March 2013 15,841,435 16,098,376
----------------------------------- ---------- ----------
6 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 2012 the investment properties were
professionally valued by Everett Newlyn, Chartered Surveyors and
Commercial Property Consultants on an open market basis.
7 Analysis of cash flow movement in net debt
Net cash at 6 months end Net cash at 6 months end Net cash at 6 months end Net cash at
01/04/12 30/09/12 30/09/12 31/03/2013 31/03/13 30/09/13 30/09/13
Cash flow Cash flow Cash flow
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
------------------------ ----------- ------------ ----------- ------------ ----------- ------------ -----------
Cash and cash
equivalents 7,742 122 7,864 1,459 9,323 414 9,737
Bank loans and
overdrafts (2,501) 1,147 (1,354) 1,016 (338) 338 -
------------------------ ----------- ------------ ----------- ------------ ----------- ------------ -----------
5,241 1,269 6,510 2,475 8,985 752 9,737
------------------------ ----------- ------------ ----------- ------------ ----------- ------------ -----------
The cash flow above is a combination of the actual cash flow and
the exchange movement.
8 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.
9 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 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.
10 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 Group 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 and Chief Executive's statement and operational
and financial review include 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.
11 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 2013
financial statements.
12 General
Other than already stated within the Chairman and Chief
Executive's statement and operational and financial review there
have been no important events during the first six months of the
financial year that have impacted this Half Yearly Financial
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 9 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 Half Yearly Financial Report includes a fair review of the
information required by DTR 4.2.7/8 (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 Financial 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 2013.
The financial information contained in this Half Yearly
Financial Report has been prepared using International Financial
Reporting Standards as adopted by the European Union. This Half
Yearly Financial 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 2013 is based on the
statutory accounts for the financial year ended 31 March 2013 that
have been filed with the Registrar of Companies and on which the
Auditor gave an unqualified audit opinion.
The Auditor's report on those accounts did not contain a
statement under Section 498(2) or (3) of the Companies Act 2006.
This Half Yearly Financial Report has not been audited or reviewed
by the Group Auditor.
A copy of this Half Yearly Financial Report can be viewed on the
Company website www.cmlmicroplc.com.
13 Approvals
The Directors approved this Half Yearly Report on 19 November
2013.
Glossary
fabless a company that designs the semiconductor but
subcontracts the wafer fabrication process
IC integrated circuit
IP intellectual property
RDT Radio Data Technology Ltd
RF radio frequency
SATA serial ATA interface
SD secure digital
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR GGGWGGUPWGMR
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