Half-year Results
No summary for this filing – the full text is below.
Select text to share a quote on X · sign in to keep highlights & notes in your CML notes
CML Microsystems Plc which develops mixed-signal, RF and microwave semiconductors for global communications markets, today announces its unaudited results for the six months ended 30 September 2024.
Financial Highlights
| · | Revenue increased by 18% to £12.53m (HY FY24: £10.58m) including a contribution of approximately £3.50m from products associated with the MwT acquisition |
| · | Profit from operations of £0.58m (H1 FY24: £1.61m) and a profit before tax of £0.82m (H1 FY24: £1.87m) |
| · | Basic earnings per share 2 of 4.34p (HY FY24: 9.44p) |
| · | Strong cash balances at period end of £14.98m 1 (30 March 2024: £18.21m) |
| · | The Board is declaring an interim dividend of 5p per ordinary share (HY FY24: 5p per share) |
| Operational Highlights | |
| · | Expansion into new, adjacent market segments with R&D focused on new product developments to target a wider customer base, including several new product releases |
| · | Successful post-acquisition integration of MwT, with increased marketing and support activities around the enlarged product portfolio |
| · | Industry-wide challenges remain in the short term, but expansion into microwave, millimetre wave and broadcast radio sectors underway and the Group remains well positioned as conditions improve |
- Net cash is the total of cash, cash equivalents and short-term deposits see note 7.
- Basic earnings per share reconciliation see note 6.
Chris Gurry, Managing Director of CML Microsystems Plc, commented on the results:
"The progress we've made this period despite the ongoing headwinds in some industrial markets showcases the resilience and adaptability of our business model. We continue to expand our market position as we navigate industry-wide challenges by diversifying and innovating our product portfolio to target adjacent markets that offer the most potential. Long-term customer relationships with blue-chip organisations remain strong, underscoring our reputation as a trusted technology partner.
While market conditions remain subdued in the near term, our ongoing investments, strategic initiatives and a strong balance sheet lay the foundations on which to build sustained, meaningful growth in the medium term."
Chief Executive's review
Overview
The first six months of the financial year to 31 March 2025 has seen the Company make steady operational progress on several fronts. We are pleased by the resilience of our business model and the strategic progress made, despite the relative softness within some of the industrial markets addressed and ongoing customer inventory management dynamics. CML's market position has been expanded into new, adjacent market segments with an increased product-set thereby increasing the business' growth potential; important groundwork has been laid to build upon.
The post-acquisition integration of MwT has continued, with increased marketing and support activities around the enlarged product portfolio. As a new entrant to some end markets, particular attention is being paid to promoting awareness of CML as a proven and reliable technology partner. The Group's existing blue-chip customer base is assisting that process in conjunction with a continual focus on new customer reach, opportunity pipeline growth and enhancements to the sales channel network.
Research & development activities have been focused on new product developments to serve wider market access along with specific programmes to ensure security of supply for a selection of the more established key products. New product announcements included:
| · | formal production availability of the DRM1000 - a complete Digital Radio Mondiale (DRM) broadcast receiver implementation, consuming 80% less power than other commercially available receivers; |
| · | the launch of a millimetre-wave gallium nitride (GaN) power amplifier that represents a cost-effective building block, primarily aimed at applications such as commercial high-volume satellite communication terminals; and |
| · | 2W gallium arsenide (GaAs) MMIC power amplifier optimised for specific performance and reliability technical characteristics that make it an ideal choice for radio frequency identification (RFID) readers, smart metering and other IoT wireless devices |
These product releases are targeted at new customers in adjacent communication market sectors, each representing significant growth opportunities.
The Group has R&D capabilities across multiple sites and, following a strategic review earlier in the year, the decision has been made to perform a restructuring within the UK team to facilitate streamlined collaboration, resource sharing and increased productivity. The process is expected to be complete by the end of the current financial year and further detail will be provided at the time of the full year results.
There have been disappointing delays in obtaining local US government building permits that are needed to unlock efficiency improvements and cost reductions within the Group's Silicon Valley-based facilities. The first half results include elevated costs relating to those delays with additional expenses stretching into the second half. Whilst it is not possible to put a definitive date on a resolution, current expectations are for the situation to be resolved by the end of the calendar year.
To summarise, multi-year investments have positioned us well for expansion with operational tweaks continuing to be made. The traditional voice and data centric markets are temporarily challenging but as a sole source supplier and supported by regular customer dialogue, we are confident that it is an industry wide problem. Expansion into microwave, millimetre wave and now broadcast radio sectors is underway and we remain very well placed as conditions improve.
Financial summary
Revenues for the first half of the financial year climbed 18% to £12.53m (H1 FY24: £10.58m), including a contribution of approximately £3.50m from products associated with the MwT acquisition. Geographically, sales into the Far East fell by close to 10% against the prior year comparable period, largely due to the previously reported environment in China. However, increases of 28% and 137% were recorded from the Americas and Europe respectively, where the Group is now shipping products into new application areas including fixed wireless backhaul, test & measurement and radar. The overall product mix delivered a gross profit of £8.74m (H1 FY24: £7.94m).
The maiden inclusion of MwT in the opening six-month period drove an increase in expenses against the prior year equivalent. One-off costs associated with US national security compliance activities and a loss on foreign exchange also contributed, leading to an overall rise in distribution and administration costs to £7.98m (H1 FY24: £6.32m).
The Group delivered a profit from operations of £0.58m (H1 FY24: £1.61m) and a profit before tax of £0.82m (H1 FY24: £1.87m).
The Board is declaring an interim dividend of 5.0p per ordinary share (H1 FY24: 5.0p), payable on 13 December 2024 to shareholders on the register on 29 November 2024.
As planned, stock levels have increased, predominantly at the raw material level. This is partly due to the inclusion of MwT from October 2023, but also in line with the strategic initiative to ensure continuity of supply in what continues to be an uncertain global environment. At 30 September 2024, inventory levels stood at £4.77m (31 March 2024: £3.67m). As noted in the Company's AGM statement on 13 August 2024, an improvement in customer inventory levels is anticipated during the second half of the financial year.
The balance sheet remains strong, with no debt, and disciplined cash management contributed to cash/cash equivalents totalling £14.98m at 30 September 2024 (30 March 2024: £18.21m). This follows cash outflows, totalling £5.01m arising from a combination of MwT acquisition stage payments (£0.96m), a final dividend (£0.96m), the purchase of Company shares for treasury (£0.45m) and investment in research and development costs of £2.64m. Further cash payments totalling £2.27m, in relation to the MwT acquisition, fall due in the second half of the year.
Property
Having been granted, in February 2023, planning permission on excess land at the Group's Essex Headquarters site, Oval Park, the land has been placed on the market for sale. It is the Group's intention to dispose of all surplus land and property that is outside of its operational needs. This also includes a vacant commercial property in Fareham, Hampshire. These one-off transactions are subject to attractive terms being achieved.
Current trading & outlook
We are pleased with the resilience of our business model, which against a backdrop of industrial market softness and stubbornly elevated customer inventory levels, is expected to deliver revenues in line with market expectations. We have made good operational progress in the half, and the Group's growth prospects have been enhanced through its investments and entry into additional market sectors with an expanded product set.
That being said, given the investment efforts to unlock future financial and operational gains alongside the protracted US building permit process and related costs, if the current trading environment persists, it will become challenging to meet management's full year expectations for trading profitability.
An additional consideration is that opportunities may present themselves in the meantime to realise exceptional benefits from the Group's non-operational property assets and discussions are ongoing. This adds to the variability of profit outcomes.
The Board is confident that the Company is well placed to deliver meaningful growth over the medium term as our growing product portfolio meets the increasingly complex needs of industrial communications. Whilst external pressures outside of our control remain frustrating, the operational decisions being taken, continuing investments and considerable effort expended will drive future performance.
Chris Gurry
Group Managing Director
Condensed consolidated income statement
for the six months ended 30 September 2024
| Unaudited 6 months end 30/09/24 | Unaudited 6 months end 30/09/23 | Audited year end 31/03/24 | |
|---|---|---|---|
| £'000 | £'000 | £'000 | |
| Continuing operations | |||
| Revenue | 12,530 | 10,575 | 22,893 |
| Cost of sales | (3,786) | (2,631) | (6,683) |
| Gross profit | 8,744 | 7,944 | 16,210 |
| Distribution and administration costs | (7,983) | (6,318) | (14,226) |
| Share-based payments | (159) | (103) | (214) |
| 602 | 1,523 | 1,770 | |
| Other operating income | (27) | 85 | 173 |
| Profit from operations | 575 | 1,608 | 1,943 |
| Other income | 14 | 50 | 62 |
| Finance income | 274 | 235 | 547 |
| Finance expense | (48) | (20) | (37) |
| Profit before taxation | 815 | 1,873 | 2,515 |
| Income tax charge | (118) | (406) | (455) |
| Profit after taxation for period attributable to equity owners of the parent | 697 | 1,467 | 2,060 |
All financial information presented relates to continuing activities.
| Unaudited 6 months end 30/09/24 | Unaudited 6 months end 30/09/23 | Audited year end 31/03/24 | |
|---|---|---|---|
| £'000 | £'000 | £'000 | |
| Basic earnings per share | 4.34p | 9.44p | 13.00p |
| Diluted earnings per share | 4.32p | 9.31p | 12.86p |
The following measure is considered an alternative performance measure, not a generally accepted accounting principle. This ratio is useful to ensure that the level of borrowings in the business can be supported by the cash flow in the business. For definition and reconciliation see note 8.
| Unaudited 6 months end 30/09/24 | Unaudited 6 months end 30/09/23 | Audited year end 31/03/24 | |
|---|---|---|---|
| £'000 | £'000 | £'000 | |
| Adjusted EBITDA | 2,876 | 3,230 | 5,703 |
| Condensed consolidated statement of total comprehensive income | |||
| for the six months ended 30 September 2024 | |||
| Unaudited 6 months end | Unaudited 6 months end | Audited year end | |
| 30/09/24 | 30/09/23 | 31/03/24 | |
| £'000 | £'000 | £'000 | |
| Profit for the period | 697 | 1,467 | 2,060 |
Other comprehensive income/(expense):
Items that will not be reclassified subsequently to profit or loss:
| Unaudited 6 months end 30/09/24 | Unaudited 6 months end 30/09/23 | Audited year end 31/03/24 | |
|---|---|---|---|
| £'000 | £'000 | £'000 | |
| Re-measurement of benefit obligation | - | - | (361) |
| Deferred tax on actuarial gain | - | - | 90 |
| Items reclassified subsequently to profit or loss upon derecognition: | |||
| Foreign exchange differences | (1,030) | (493) | (1,153) |
| Other comprehensive income for the period net of taxation attributable to the equity holders of the parent | (1,030) | (493) | (1,424) |
| Total comprehensive income for the period attributable to the equity holders of the parent | (333) | 974 | 636 |
| Condensed consolidated statement of financial position | |||
| as at 30 September 2024 | |||
| Unaudited | Unaudited | Audited | |
| 30/09/24 | 30/09/23 | 31/03/24 | |
| £'000 | £'000 | £'000 | |
| Assets | |||
| Non-current assets | |||
| Goodwill | 13,853 | 7,152 | 14,449 |
| Other intangible assets | 2,942 | 885 | 3,350 |
| Development costs | 16,022 | 14,391 | 15,150 |
| Property, plant and equipment | 5,643 | 6,087 | 5,655 |
| Right-of-use assets | 2,269 | 910 | 813 |
| Deferred tax assets | 733 | 618 | 788 |
| 41,462 | 30,043 | 40,205 | |
| Current assets | |||
| Property, plant and equipment - held for sale | 1,124 | - | 1,124 |
| Investment properties - held for sale | 1,975 | 1,975 | 1,975 |
| Inventories | 4,768 | 2,187 | 3,672 |
| Trade receivables and prepayments | 3,354 | 2,881 | 3,734 |
| Current tax assets | 303 | 71 | 190 |
| Cash and cash equivalents | 9,145 | 14,300 | 11,262 |
| Short-term cash deposits | 5,834 | 6,646 | 6,951 |
| 26,503 | 28,060 | 28,908 | |
| Total assets | 67,965 | 58,103 | 69,113 |
| Liabilities | |||
| Current liabilities | |||
| Trade and other payables | 6,268 | 2,230 | 7,528 |
| Provisions | 196 | - | 208 |
| Lease liabilities | 385 | 198 | 219 |
| Current tax liabilities | 127 | 4 | 16 |
| 6,976 | 2,432 | 7,971 | |
| Non-current liabilities | |||
| Deferred tax liabilities | 5,279 | 4,450 | 5,224 |
| Trade and other payables | 2,509 | - | 2,509 |
| Lease liabilities | 2,003 | 751 | 637 |
| Retirement benefit obligation | 1,696 | 1,204 | 1,696 |
| 11,487 | 6,405 | 10,066 | |
| Total liabilities | 18,463 | 8,837 | 18,037 |
| Net assets | 49,502 | 49,266 | 51,076 |
Capital and reserves attributable to equity owners of the parent
| Unaudited 6 months end 30/09/24 | Unaudited 6 months end 30/09/23 | Audited year end 31/03/24 | |
|---|---|---|---|
| £'000 | £'000 | £'000 | |
| Share capital | 825 | 796 | 825 |
| Share premium | 2,264 | 2,327 | 2,327 |
| Capital redemption reserve | 8,372 | 8,372 | 8,372 |
| Other reserve | 3,073 | - | 3,073 |
| Treasury shares - own share reserve | (2,143) | (1,822) | (1,822) |
| Share-based payments reserve | 814 | 566 | 666 |
| Foreign exchange reserve | (1,141) | 549 | (111) |
| Retained earnings | 37,438 | 38,478 | 37,746 |
| Total shareholders' equity | 49,502 | 49,266 | 51,076 |
| Condensed consolidated cash flow statement | |||
| for the six months ended 30 September 2024 | |||
| Unaudited | Unaudited | Audited | |
| 6 months end | 6 months end | year end | |
| 30/09/24 | 30/09/23 | 31/03/24 | |
| £'000 | £'000 | £'000 | |
| Operating activities | |||
| Profit for the period before taxation | 815 | 1,873 | 2,515 |
| Adjustments for: | |||
| Foreign exchange movement | (68) | - | (140) |
| Depreciation - on property, plant and equipment | 269 | 239 | 520 |
| Depreciation - on right-of-use assets | 444 | 111 | 486 |
| Amortisation of development costs | 1,159 | 1,020 | 2,110 |
| Amortisation of intangibles recognised on acquisition and purchased | 256 | 99 | 368 |
| Profit on disposal of fixed assets | - | - | 5 |
| Movement in non-cash items (retirement benefit obligation) | 90 | 90 | 131 |
| Share-based payments | 159 | 103 | 214 |
| Finance income | (274) | (235) | (547) |
| Finance expense | 48 | 20 | 37 |
| Movement in working capital | (1,016) | (1,381) | (1,966) |
| Cash flows from operating activities | 1,882 | 1,939 | 3,733 |
| Income tax (paid)/received | (119) | 1,483 | 1,311 |
| Net cash flows from operating activities | 1,763 | 3,422 | 5,044 |
| Investing activities | |||
| Purchase of property, plant and equipment | (264) | (597) | (1,524) |
| Investment in development costs | (2,057) | (1,666) | (3,541) |
| Repayment/(investment) in fixed term deposits (net) | 1,117 | (5,428) | (5,733) |
| Acquisition of subsidiary (net of cash acquired) | (956) | - | (565) |
| Investment in intangibles | - | (32) | (32) |
| Finance income | 274 | 235 | 547 |
| Net cash outflow investing activities | (1,886) | (7,488) | (10,848) |
| Financing activities | |||
| Lease liability repayments | (403) | (122) | (502) |
| Issue of ordinary shares (net of expenses) | 63 | 117 | 117 |
| Purchase of own shares for treasury | (446) | (1,750) | (1,750) |
| Dividends paid to shareholders | (961) | (932) | (1,739) |
| Finance expense | (10) | - | (4) |
| Net cash outflow from financing activities | (1,757) | (2,687) | (3,878) |
| Decrease in cash, cash equivalents and short-term cash deposits | (1,880) | (6,753) | (9,682) |
| Movement in cash and cash equivalents: | |||
| At start of period/year | 11,262 | 21,041 | 21,041 |
| Decrease in cash, cash equivalents and short-term cash deposits | (1,880) | (6,753) | (9,682) |
| Effects of exchange rate changes | (237) | 12 | (97) |
| At end of period | 9,145 | 14,300 | 11,262 |
Cash flows presented exclude sales taxes. Further cash-related disclosure details are provided in note 7.
Changes in liabilities arising from financing activities relate to lease liabilities only.
Condensed consolidated statement of changes in equity
for the six months ended 30 September 2024
| Capital | Share- | Foreign | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Share | Share | redemption | Other | Treasury | based | exchange | Retained | ||
| capital | premium | reserve | reserve | shares | payments | reserve | earnings | Total | |
| Unaudited | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| At 31 March 2023 | 796 | 2,462 | 8,372 | - | (324) | 488 | 1,042 | 37,918 | 50,754 |
| Profit for period | 1,467 | 1,467 | |||||||
| Other comprehensive income net of taxes | |||||||||
| Foreign exchange differences | (493) | (493) | |||||||
| Total comprehensive income for the period | - | - | - | - | - | - | (493) | 1,467 | 974 |
| 796 | 2,462 | 8,372 | - | (324) | 488 | 549 | 39,385 | 51,728 | |
| Transactions with owners in their capacity as owners | |||||||||
| Issue of treasury shares | (135) | 252 | 117 | ||||||
| Purchase of own shares - treasury | (1,750) | (1,750) | |||||||
| Dividend paid | (932) | (932) | |||||||
| Total of transactions with owners in their capacity as owners | - | (135) | - | - | (1,498) | - | - | (932) | (2,565) |
| Share-based payments | 103 | 103 | |||||||
| Cancellation/transfer of share-based payments | (25) | 25 | - | ||||||
| At 30 September 2023 | 796 | 2,327 | 8,372 | - | (1,822) | 566 | 549 | 38,478 | 49,266 |
| Profit for period | 593 | 593 | |||||||
| Other comprehensive income net of taxes | |||||||||
| Foreign exchange differences | (660) | (660) | |||||||
| Re-measurement of defined benefit obligations | (361) | (361) | |||||||
| Deferred tax on actuarial loss | 90 | 90 | |||||||
| Total comprehensive income for the period | - | - | - | - | - | - | (660) | 322 | (338) |
| 796 | 2,327 | 8,372 | - | (1,822) | 566 | (111) | 38,800 | 48,928 | |
| Transactions with owners in their capacity as owners | |||||||||
| Issue of ordinary shares - acquisition | 29 | 3,073 | 3,102 | ||||||
| Dividend paid | (807) | (807) | |||||||
| Total of transactions with owners in their capacity as owners | 29 | - | - | 3,073 | - | - | - | (807) | 2,295 |
| Share-based payment charge | 111 | 111 | |||||||
| Deferred tax on share-based payments | (258) | (258) | |||||||
| Cancellation/transfer of share-based payments | (11) | 11 | - | ||||||
| At 31 March 2024 | 825 | 2,327 | 8,372 | 3,073 | (1,822) | 666 | (111) | 37,746 | 51,076 |
| CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY continued | |||||||||
| for the six months ended 30 September 2024 | |||||||||
| Capital | Share- | Foreign | |||||||
| Share | Share | redemption | Other | Treasury | based | exchange | Retained | ||
| capital | premium | reserve | reserve | shares | payments | reserve | earnings | Total | |
| Unaudited | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 | £'000 |
| At 31 March 2024 | 825 | 2,327 | 8,372 | 3,073 | (1,822) | 666 | (111) | 37,746 | 51,076 |
| Profit for period | 697 | 697 | |||||||
| Other comprehensive income net of taxes | |||||||||
| Foreign exchange differences | (1,030) | (1,030) | |||||||
| Total comprehensive income for the period | - | - | - | - | - | - | (1,030) | 697 | (333) |
| 825 | 2,327 | 8,372 | 3,073 | (1,822) | 666 | (1,141) | 38,443 | 50,743 | |
| Transactions with owners in their capacity as owners | |||||||||
| Issue of treasury shares | (63) | 124 | 61 | ||||||
| Purchase of own shares - treasury | (445) | (445) | |||||||
| Dividend paid | (961) | (961) | |||||||
| Total of transactions with owners in their capacity as owners | - | (63) | - | - | (321) | - | - | (961) | (1,345) |
| Share-based payments | 159 | 159 | |||||||
| Deferred tax on share-based payments | (55) | (55) | |||||||
| Cancellation/transfer of share-based payments | (11) | 11 | - | ||||||
| At 30 September 2024 | 825 | 2,264 | 8,372 | 3,073 | (2,143) | 814 | (1,141) | 37,438 | 49,502 |
Notes to the condensed consolidated financial statements
for the six months ended 30 September 2024
1 Basis of preparation and approval of interim statements
The financial information for the six months ended 30 September 2024 and for the six months ended 30 September 2023 is unaudited.
The interim financial statement for the six months to 30 September 2024 does not include all of the information required for full annual financial statements and should be read in conjunction with the consolidated financial statements for the year ended 31 March 2024.
The financial information has been prepared on the basis of UK adopted international accounting standards (IFRSs) that the Directors expect to be applicable as at 31 March 2025.
The accounting policies adopted in the preparation of the interim financial statements are consistent with those set out in the Group's Annual Report and Financial Statements 2024, which were prepared in accordance with IFRSs.
This interim financial statement does not comprise statutory accounts within the meaning of Section 435 of the Companies Act 2006. Statutory accounts for the year ended 31 March 2024 were approved by the Board on 1July 2024 and delivered to the Registrar of Companies. The report of the auditor on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statement under Section 498(2) or Section 498(3) of the Companies Act 2006.
The interim financial statement were approved by the Board of Directors on 19 November 2024.
2 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 Group Managing Director, who is 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.
The Group is focused for management purposes on one primary reporting segment, being the semiconductor segment, with similar economic characteristics, risks and returns, and the Directors therefore consider there to be one single segment, being semiconductor components for the communications industry.
Geographical segments (by origin)
| Unaudited | Unaudited | Audited | |
|---|---|---|---|
| 6 months end | 6 months end | year end | |
| 30/09/24 | 30/09/23 | 31/03/24 | |
| £'000 | £'000 | £'000 | |
| Revenue to third parties | |||
| UK | 618 | 2,613 | 5,546 |
| Americas | 5,983 | 1,243 | 5,802 |
| Far East | 5,929 | 6,719 | 11,545 |
| Total | 12,530 | 10,575 | 22,893 |
| Unaudited | Unaudited | Audited | |
| 6 months end | 6 months end | year end | |
| 30/09/24 | 30/09/23 | 31/03/24 | |
| £'000 | £'000 | £'000 | |
| Total assets | |||
| UK | 51,597 | 44,942 | 53,961 |
| Americas | 5,747 | 1,512 | 4,473 |
| Far East | 10,621 | 11,649 | 10,679 |
| Total | 67,965 | 58,103 | 69,113 |
3 Revenue
The geographical classification of business turnover (by destination) is as follows:
| Unaudited | Unaudited | Audited | |
|---|---|---|---|
| 6 months end | 6 months end | year end | |
| 30/09/24 | 30/09/23 | 31/03/24 | |
| £'000 | £'000 | £'000 | |
| Europe | 2,713 | 2,115 | 4,895 |
| Far East | 6,003 | 6,660 | 11,754 |
| Americas | 3,486 | 1,471 | 5,524 |
| Other | 328 | 329 | 720 |
| 12,530 | 10,575 | 22,893 |
The operational classification of business turnover (by market) is as follows:
| Unaudited | Unaudited | Audited | |
|---|---|---|---|
| 6 months end | 6 months end | year end | |
| 30/09/24 | 30/09/23 | 31/03/24 | |
| £'000 | £'000 | £'000 | |
| Semiconductor | 12,325 | 10,166 | 21,891 |
| Design and development | 205 | 409 | 1,002 |
| 12,530 | 10,575 | 22,893 |
Semiconductor products, goods and services are transferred at a point in time whereas design and development revenue is transferred over the period of the contract on a percentage basis of contract completion, as detailed in the Group's revenue recognition policy within its published Annual Report.
The Group does not have any contract assets or liabilities at 30 September 2024 (£Nil at 31 March 2024) from semiconductors as it does not fulfil any of its performance obligations in advance of invoicing to its customer. The Group has contract assets of £25,000 as at 30 September 2024 (£76,000 at 31 March 2024) from design and development and contract liabilities of £Nil as at 30 September 2024 (£Nil at 31 March 2024) from design and development. The Group has contractual balances in the form of trade receivables. See note 20 for disclosure of this in the Annual Report and Accounts for the year ended 31 March 2024.
The Group expects all contractual costs capitalised or any outstanding performance obligations will be completed within the next twelve months.
4 Dividend paid and interim dividend
The Board is declaring an interim dividend of 5p per ordinary share for the half year ended 30 September 2024, payable on 13 December 2024 to shareholders on the Register on 29 November 2024.
A final dividend of 6p per ordinary share was paid on 16 August 2024 and an interim dividend of 5p per ordinary share was paid on 12 January 2024, totalling 11p per ordinary share paid for the year ended 31 March 2024 (2023: 11p per ordinary share paid for the year ended 31 March 2023).
5 Income tax expense/(credit)
| Unaudited | Unaudited | Audited | |
|---|---|---|---|
| 6 months end | 6 months end | year end | |
| 30/09/24 | 30/09/23 | 31/03/24 | |
| £'000 | £'000 | £'000 | |
| Current tax | |||
| UK corporation tax on results of the period/year | (121) | (9) | (155) |
| Adjustment in respect of previous years | 2 | 101 | 114 |
| (119) | 92 | (41) | |
| Foreign tax on results of the period/year | 149 | 139 | 215 |
| Total current tax | 30 | 231 | 174 |
| Deferred tax | |||
| Deferred tax - origination and reversal of temporary differences | |||
| 70 | 153 | 259 | |
Adjustments to deferred tax charge in respect of previous years
| Unaudited | Unaudited | Audited | |
|---|---|---|---|
| 6 months end | 6 months end | year end | |
| 30/09/24 | 30/09/23 | 31/03/24 | |
| 18 | 22 | 22 | |
| Total deferred tax | 88 | 175 | 281 |
| Tax expense on profit on ordinary activities | 118 | 406 | 455 |
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.
The tax charge for the six months ended 30 September 2024 has been calculated by applying the effective tax rate which is expected to apply to the Group for the year ending 31 March 2025, using rates substantially enacted by 30 September 2024.
6 Earnings per share
| Unaudited | Unaudited | Audited |
| 6 months end | 6 months end | year end |
| 30/09/24 | 30/09/23 | 31/03/24 |
| £'000 | £'000 | £'000 |
Earnings per share from total operations attributable to the ordinary equity holders of the Company
| Basic earnings per share | 4.34p | 9.44p | 13.00p |
| Diluted earnings per share | 4.32p | 9.31p | 12.86p |
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, as explained below:
Ordinary 5p shares
Weighted
| average | Diluted | ||
|---|---|---|---|
| number | number | ||
| Six months ended 30 September 2024 | 16,047,329 | 16,141,190 | |
| Six months ended 30 September 2023 | 15,546,906 | 15,765,610 | |
| Year ended 31 March 2024 | 15,842,911 | 16,016,767 | |
| 7 Cash, cash equivalents and short-term deposits | |||
| Unaudited | Unaudited | Audited | |
| 6 months end | 6 months end | year end | |
| 30/09/24 | 30/09/23 | 31/03/24 | |
| £'000 | £'000 | £'000 | |
| Cash on deposit | 2,176 | 3,016 | 3,095 |
| Cash at bank | 6,969 | 11,284 | 8,167 |
| 9,145 | 14,300 | 11,262 | |
| Short-term cash deposits | 5,834 | 6,646 | 6,951 |
| 14,979 | 20,946 | 18,213 | |
8 Adjusted EBITDA
Adjusted earnings before interest, tax, depreciation and amortisation ('Adjusted EBITDA') is defined as profit before taxation and before all interest, tax, depreciation and amortisation charges and before share-based payments. The following is a reconciliation of the Adjusted EBITDA for the three periods presented:
| Unaudited | Unaudited | Audited | |
|---|---|---|---|
| 6 months end | 6 months end | year end | |
| 30/09/24 | 30/09/23 | 31/03/24 | |
| £'000 | £'000 | £'000 | |
| Profit before taxation (earnings) | 815 | 1,873 | 2,515 |
| Adjustments for: | |||
| Finance income | (274) | (235) | (547) |
| Finance expense | 48 | 20 | 37 |
| Depreciation | 269 | 239 | 520 |
| Depreciation - right-of-use assets | 444 | 111 | 486 |
| Amortisation of development costs | 1,159 | 1,020 | 2,110 |
Amortisation of intangibles of purchased and acquired intangibles recognised on
| Unaudited | Unaudited | Audited | |
|---|---|---|---|
| 6 months end | 6 months end | year end | |
| 30/09/24 | 30/09/23 | 31/03/24 | |
| acquisition | 256 | 99 | 368 |
| Share-based payments | 159 | 103 | 214 |
| Adjusted EBITDA | 2,876 | 3,230 | 5,703 |
9 Acquisition of Microwave Technology Inc.
The Company announced on 2 October 2023 that it had successfully completed the acquisition of Microwave Technology Inc for a total consideration of $13.18m, of which $7.65m was payable in cash and $5.53m is payable in shares. The acquisition was not previously reported in the unaudited accounts ended 30 September 2023. In the audited accounts ended 31 March 2024 this was reported as an acquisition.
The acquisition expands the Group's product portfolio, strengthens and enhances its support resources and increase its R&D capabilities, providing essential knowhow and experience in system level understanding, product manufacturing and packaging techniques. MwT's products are complementary to CML's existing offering.
Further information can be found in the Annual Report and Accounts ended 31 March 2024 which can be reviewed on the Company website: www.cmlmicroplc.com or obtained from Companies House.
10 General
Other than already stated within the Chief Executive's 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 Company has appointed Cooper Parry Group Limited as its new auditor's replacing BDO LLP who have formally resigned and have not notified the Company of any reasons or matters connected with their ceasing to hold office as auditors. Cooper Parry will conduct the audit of the Company's financial statements for the financial year to 31 March 2025.
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 Report has not been audited by the Group auditor.
A copy of this Half Yearly Report can be viewed on the Company website: www.cmlmicroplc.com.
11 Approvals
The Directors approved this Half Yearly Report on 19 November 2024.
Glossary
5G Fifth Generation Cellular Network Technology
AIM Alternative Investment Market
AMR Automatic Meter Reading
DRM Digital Radio Mondiale
EBITDA Earnings before interest, tax, depreciation and amortisation
EPS Earnings per share
FY Full Year
GaAs Gallium Arsenide
GaN Gallium Nitride
H1 First Half (Financial Year)
IAS International Accounting Standards
IC Integrated Circuit
IFRS International Financial Reporting Standards
IIoT Industrial Internet of Things
IoT Internet of Things
LMR Land Mobile Radio
M2M Machine to Machine
MMIC Monolithic Microwave Integrated Circuit
PMR Private Mobile Radio
R&D Research and Development
RF Radio Frequency
RFID Radio Frequency Identification
CML Microsystems Plc
Oval Park, Langford
Maldon, Essex
CM9 6WG
F: +44 (0)1621 875606
Visit us online at
Cleaned text: letterheads, contacts and legal notices removed. View the original announcement ↗ · Company filings. Not investment advice.