REG - CML Microsystems PLC - Full Year Results
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RNS Number : 0537O CML Microsystems PLC 24 June 2025
24 June 2025
CML Microsystems Plc
("CML", the "Company" or the "Group")
Full Year Results
Continued resilience in persisting challenging market conditions
CML Microsystems Plc, which develops mixed-signal, RF and microwave
semiconductors for global communications markets, announces its Full Year
Preliminary Results for the year ended 31 March 2025.
Financial Highlights
· Revenues remained robust at £22.90m (FY24: £22.89m)
· Profit from operations of £0.53m (FY24: £1.94m), impacted by higher costs
from the full-year inclusion of MwT and the factory relocation
· Profit before taxation of £0.88m (FY24: £2.52m) excluding exceptional items
· Cash balances at period end of £9.92m (31 March 2024: net cash of £18.21m)
following R&D cash spend of £5.50m, acquisition-related payments of
£3.79m, dividend payments of £1.77m, a £0.60m investment in capex and share
buybacks totalling £0.90m
· Recommended final dividend of 6.0p per share (FY24: 6.0p per share) giving a
full year dividend of 11.0p (FY24: 11.0p)
Operational Highlights
· Continued execution of growth strategy against challenging markets
· Successfully completed MwT post-acquisition plans, including relocation to new
premises, appointment of a local VP of Operations, and full implementation of
the NSA, with the first U.S. government audit successfully completed
· Completed strategic restructuring of UK R&D resources to improve
cross-functional collaboration, streamline resource allocation, and balance
internal product development with third-party design services
· Further expansion of the product portfolio with the launch of multiple
high-performance RF and microwave products including GaN and GaAs power
amplifiers and the DRM1000 broadcast receiver module
· Opportunity pipeline at record levels providing confidence in future revenue
growth and market expansion
Chris Gurry, Group Managing Director of CML Microsystems, commented on the
results: "With the successful completion of the operational phase of a
multi-year transformational strategy, the business is now poised to enter a
new chapter focused on sustainable growth and long-term value creation. Over
this period, we have fundamentally reshaped the business, enhancing
efficiency, expanding our technology capabilities, and significantly
broadening our product portfolio. Supported by a strong financial foundation
and a disciplined growth strategy, we are well-equipped to navigate current
challenges and intend to continue investing in innovation, customer
engagement, and strategic partnerships that will drive the business forward."
Enquiries:
CML Microsystems Plc www.cmlmicroplc.com (http://www.cmlmicroplc.com/)
Tel: +44 (0) 1621 875 500
Chris Gurry, Group Managing Director
Nigel Clark, Executive Chairman
Shore Capital (Nominated Adviser and Broker) Tel: +44 (0) 20 7408 4090
Toby Gibbs, James Thomas, Lucy Bowden
Fiona Conroy (Corporate Broking)
Alma Strategic Communications Tel: +44 (0)20 3405 0205
Josh Royston, Andy Bryant, Robyn Fisher, Emma Thompson
About CML Microsystems PLC
CML develops mixed-signal, RF and microwave semiconductors for global
communications markets. The Group utilises a combination of outsourced
manufacturing and in-house testing with trading operations in the UK, Asia and
USA. CML targets sub-segments within Communication markets with strong growth
profiles and high barriers to entry. It has secured a diverse, blue chip
customer base, including some of the world's leading commercial and industrial
product manufacturers.
Growth in its end markets is being driven by factors such as the appetite for
data to be transmitted faster and more securely, the upgrading of telecoms
infrastructure around the world and the growing prevalence of private
commercial wireless networks for voice and/or data communications linked to
the industrial internet of things (IIoT).
The Group is cash-generative, has no debt and is dividend paying.
Chairman's statement
The Company has produced a resilient set of results for the financial year
ended 31 March 2025; however, as noted in our March trading statement, the
second half of the financial year was challenging with persisting soft
markets. We do continue to make good operational progress and, placing global
events aside, remain confident in the direction and prospects for the
business.
To underline this progress and provide relevant context, I outline what has
been achieved over recent years, against a backdrop of significant global
headwinds including COVID, geopolitical disruption, conflict and upheaval
leading to extensive supply chain problems.
A little over five years ago, as part of a continual assessment of our
strategy, it became clear to us that the Storage market was not going to yield
the double-digit growth objectives we target, and there was a risk that it
could potentially decline. Simultaneously, the markets addressed by our niche
anchor product lines, though very profitable, only indicated steady growth. We
therefore made the strategic decision to exit the Storage market and
supplement the anchor product line with a new range of semiconductors, able to
address much larger markets within the overall communications sector, with
significant growth prospects.
To maximise the chances of success, a broadening of our engineering expertise
was required, and this was duly achieved through the excellent acquisition of
PRFI in March 2020. We then started the task of developing a new suite of
products (the 'SµRF' range) to address these new markets.
The rapid initial development and market release of the new SµRF range
identified that an expansion of the product portfolio was required, and
part-utilising the significant profit made from the sale of the Storage
division we acquired Microwave Technology, Inc. (MwT) in order to fulfil this
need, with the balance of funds largely returned to shareholders. An agreement
was signed for the acquisition of MwT in January 2023; however the acquisition
required the signing of a National Security Agreement with the US authorities,
which was eventually concluded several months thereafter, in October 2023. The
assimilation of MwT has proceeded well and included the move to a new,
appropriately sized facility in March 2025, following almost a year of delays
relating to State bureaucracy and regulations.
We have continued to return capital to shareholders and now have an extremely
exciting product range to meet the growing demands of a much larger
communications market, one that offers the potential for sustainable long-term
growth.
Our initial expectation was that we would see the financial operating benefits
of this strategic transition within five years; however, unpredictable global
external events have led to a period of unprecedented uncertainty, extending
the financial realisation period. That said, the strategy being followed is
being executed by a very experienced management team, backed by a superb and
supportive workforce and combined with our technical expertise, strong balance
sheet and a material amount of cash, we know that success is within our reach.
Revenues this year remained robust at £22.90m (FY24: £22.89m) assisted by a
full year's contribution from MwT and a growing contribution from the SµRF
range but tempered by the already well-flagged inventory overhang affecting
the niche anchor product line. As a result of product mix, the gross profit
margin declined by 2bps to 69%, with actual gross profit at £15.90m (FY24:
£16.21m). The first full-year inclusion of MwT coupled with the protracted
move to a new factory led to an overall increase in distribution and
administration costs of £0.91m. This effectively reduced profit from
operations, pre-exceptionals, to £0.53m (FY24: £1.94m). Additionally, the
restructuring of the UK R&D team, first communicated at the time of the
interim results in November 2024, led to an exceptional charge of £1.65m
resulting in a reported loss before tax of £0.8m (FY24: profit £2.5m). With
the positive tax charge, reported profit after tax for the year was
effectively breakeven.
We continue to pursue the disposal of excess land at Oval Park and the
non-operational property at Fareham.
The allocation of cash generated by the business has been to support working
capital needs and R&D investment requirements, to fuel growth organically
and to underpin periodic acquisitions. After these priorities, any surplus
cash has typically been returned to shareholders.
To underline our confidence in the Group's prospects, we are maintaining the
final dividend payment at 6p (FY24: final dividend of 6p) taking the total
dividend paid for the year ended 31 March 2025 to 11p (FY24: 11p). Subject to
shareholder approval, the shares will go ex-dividend on 31 July 2025, and the
dividend will be paid on 15 August 2025 to shareholders whose names appear on
the register at close of business on 1 August 2025.
Following disposal of the Storage division, which yielded significant surplus
cash, we enhanced the share buyback programme and declared the aim to follow a
progressive dividend policy whilst the business progressed with its new growth
strategy. The intention was to provide comfort that through the multi-year
transitional period, shareholder returns would continue, profitability and
cash generation permitting. If the unprecedented level of global uncertainty
persists beyond our current expectations, and the Group's performance is
negatively impacted, then this dividend policy will need to come under review
in future.
During the year, the Company undertook a £0.90m share buyback (FY24: £1.8m)
which, along with the dividend, demonstrates the Board's long-term confidence
and its commitment to returning funds to shareholders and enhancing earnings
where possible.
Our employees are the cornerstone of our business and in these challenging
times their resilience, creativity and efforts have been instrumental in
driving our progress. On behalf of the Board, I would like to thank all the
employees for their dedication and support through this past year.
When providing guidance, we endeavour to exceed expectations and our historic
record has been good; however, reliable forecasting in the current global
climate is proving very difficult. Operating profit is the true indicator of
performance and this remains our focus. For the coming full financial year, we
expect a marginally positive outcome but with profitability heavily weighted
to the second-half period.
Having spent the last few years preparing the business for its next growth
phase, the foundations are now in place. The Board is confident that the
business is well placed to deliver on its growth ambitions, across an enlarged
product set and corresponding increased market opportunity.
Nigel Clark
Non-Executive Chairman
Operational and financial review
Introduction
Over the twelve months prior to 31 March 2025, the Company delivered solid
operational progress across key areas of the business, demonstrating
resilience and discipline amid an increasingly complex global landscape.
We continued to execute on our core priorities, investing in R&D,
deepening customer engagement and securing design-wins for the expanded
product portfolio. These efforts have positioned us well for long-term value
creation; however, our progress has not been without challenges.
For 2024, semiconductor industry data points to an improved performance for
the market as a whole, driven by demand in the memory and logic segments,
themselves fuelled by applications in artificial intelligence and
high-performance computing. Outside of these growth areas, the landscape was
generally more subdued.
The past year was marked by the combined effects of persistent geopolitical
tensions and softness across a selection of our core traditional voice and
datacentric markets an industry-wide problem. These external headwinds have
impacted demand patterns and introduced new layers of uncertainty, affecting
supply chains, where excess inventory across both customer and sales channels
continued to weigh on demand, particularly in the second half of the fiscal
year.
Despite these pressures, our teams responded with agility and focus, ensuring
we maintained our momentum while adapting where necessary. Expansion into
applications that utilise microwave and millimetre wave technologies is
ongoing and we remain very well placed as conditions improve.
Amid a challenging backdrop, the business continues to execute against a solid
expansion strategy with an experienced, skilled and enthusiastic team. The
relatively strong balance sheet allows longer-term decision-making that is
intended to benefit all stakeholders through the years ahead.
Strategy
The year under review marks an important chapter in the Company's evolution.
From a specialised semiconductor supplier serving two very different niche
market segments, we have strategically transformed into a truly global
semiconductor innovator, with manufacturing and sales operations in the UK, US
and China, addressing a much wider spectrum of industries and applications.
Our transition has been guided by a clear vision: to leverage our core
technological strengths and manufacturing excellence, both organically and
through corporate activity, to meet the growing, diversified demands of our
existing and prospective customer base.
The communications market is vast, with a myriad of end-application areas.
Within this landscape of opportunity, CML is actively participating in
supplying semiconductor solutions into several sub-markets that play to our
strengths and have excellent growth potential on a sustainable basis. These
sub-markets include, wireless, network infrastructure, satellite, aerospace
& defence, industrial internet of things (IIoT) and, more recently,
broadcast radio.
This diversification strategy has not only expanded our customer base but also
increased our resilience in the face of shifting market dynamics. Through
targeted investments in R&D, global partnerships and supply chain agility,
we have strengthened our competitive position and unlocked new growth
opportunities.
As we look ahead, we remain committed to innovation, operational excellence
and sustainable value creation for all stakeholders.
Markets
The period has been characterised by strategic investments in product
developments and collaboration activities, involving a combination of Group
personnel and global sales channel partners, intended to secure the expansion
into new and emerging markets.
Some initiatives are currently in the early stages of customer and market
penetration, such as millimetre wave 5G networks and broadcast radio, and have
yet to deliver substantial financial returns. However, the Group's
semiconductor solutions for these markets constitute a fundamental component
of our long-term growth strategy and are key to the business transitioning
from legacy market dependence towards a more diversified revenue base.
We anticipate that these efforts will deliver meaningful incremental growth in
future reporting periods as new products gain traction, market access expands
and the general economic landscape improves.
Whilst the challenging external factors through the year have delayed overall
revenue progress, future growth is expected as market conditions and ordering
patterns normalise, with key drivers being:
· Wireless Digital Transformation: The ongoing transition from analogue to
digital technologies, enhancing communication efficiency and interoperability.
· Hybrid PMR-LTE Systems: Integration of PMR with broadband and LTE networks is
expanding capabilities, allowing for high-speed data alongside traditional
voice communication.
· Public Safety: Governments are investing in advanced communications
capabilities to bolster emergency response and national security.
· Industrial IoT: Increased use of wireless technology within Manufacturing
(Smart factories and automation), Energy & Utilities (Grid monitoring and
control), Transportation & Logistics (Fleet management and real-time
tracking), Healthcare (Remote monitoring and telehealth services).
· Satellite: Advances in the use of location accuracy for a wide variety of
end-application areas such as surveying and mapping, construction and civil
engineering, agriculture (precision farming), fleet and asset management,
mining, maritime and offshore.
· Network Infrastructure: The millimetre-wave (mmWave) 5G market is poised for
significant growth over the next decade, driven by increasing demand for
high-speed, low-latency wireless communications, including
ultra-high-definition video streaming, industrial adoption for applications
like factory automation and real-time analytics, and high reliability.
· Infrastructure Development: Significant investments in 5G
infrastructure, including small cells and beamforming technologies, are
facilitating the deployment of mmWave networks.
· Spectrum Availability: Governments worldwide are allocating
mmWave spectrum bands for 5G use, expanding the potential for network
deployment and innovation.
· Aerospace & Defence: Rising global conflicts and threats are pushing
governments to increase defence budgets. Investments in next-generation
defence platforms are accelerating and driving demand in end-applications
including tactical communications, radar, unmanned systems, military satellite
communications, surveillance and reconnaissance.
· Broadcast: The adoption of the DRM digital radio standard within countries and
regions with vast rural populations, where DRM is seen as a cost-effective way
to reach people with public service and educational content. DRM fills an
important role in the global digital radio ecosystem, especially where
coverage, cost and resilience matter the most.
The majority of the market sectors being addressed have an industrial,
commercial or military focus and meaningful revenue takes time to flow after
achieving design-win success with an end-customer. However, the Group's
opportunity pipeline has grown significantly as a result of the enlarged
product portfolio, with numerous new design wins recorded across the last two
years in smart metering, vehicle tracking, RADAR, IoT, RFID and satellite
applications, to name just a few. This serves to validate the strategy being
followed and demonstrates the underlying progress being made.
Operations
Much has been achieved across the full year, with our global operating
personnel executing well against a clear strategy, despite the challenge of
navigating disruptive external factors.
Proactive activities that were a feature of the prior financial year, relating
to security of supply for an important selection of the Group's core products,
progressed to schedule and are expected to reach a conclusion in 2026.
Additionally, unexpected issues with a US supplier experiencing China-related
procurement restrictions required swift, appropriate re-sourcing actions to be
taken that are expected to restore supply continuity through FY26. Amid these
periodic obstacles, the strength of our relationships with customers and
suppliers alike has been and will continue to be a major factor in the Group's
success.
Following a strategic review, and as reported at the interim stage, the
decision was taken to perform a restructuring within the UK R&D teams to
facilitate streamlined collaboration, resource sharing and increased
productivity. That process was completed as planned prior to 31 March 2025 and
resulted in an exceptional goodwill and intangible asset write-off, as
detailed in the financial review.
Beyond the above objectives, the restructuring is expected to deliver a more
appropriate balance between internal new product developments and the
separate, but strategically important, provision of third-party design
services for external partners. The restructuring included the integration of
the PRFI Ltd design team into CML's UK operating company and included the
appointment of a senior department head, enhancing and extending the team's
design capabilities and sector knowledge.
R&D investments continued at a healthy level, equating to 24% of Group
revenues and including, for the first time, a full year of activities taking
place at our California location.
Engineering and operational efforts across the year resulted in the release of
several new products, including:
· 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;
· 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; and
· a pair of high efficiency single- and two-stage power amplifiers that offer
outstanding performance for a wide range of dual-cell lithium battery-powered
wireless devices.
The Group's multi-year, long-term initiative to develop an IC and module
solution for DRM continued with the formal production availability of the
DRM1000 a complete Digital Radio Mondiale (DRM) broadcast receiver
implementation. DRM is becoming the dominant digital broadcast radio standard
in Asia. In addition to the network in India which covers 900 million people,
China has announced the intention to deploy DRM on a national basis, Pakistan
continues the building of new countrywide broadcast infrastructure to
facilitate DRM-based radio broadcasting, and Indonesia has committed to
national DRM rollout in the coming three years. Further markets are expected
to become active in future years.
The DRM1000 module will facilitate affordable, mass production of consumer
radios in the local markets where DRM broadcasting is adopted. The product
offers world-leading performance, with many advanced features, whilst
requiring only 25% of the power consumption of our nearest competitors.
To complement market expansion objectives, the Company exhibited at, and
participated in, numerous trade shows and conferences relevant to the sectors
and industries being addressed. These included IMS2024 (Washington DC),
European Microwave Week (Paris), ARMMS Conference (Cambridge) along with
regular international events associated with the DRM consortium. These
endeavours are an important ingredient for success, raising awareness of CML
across a wider customer base.
Microwave Technology, Inc.
Having completed the first full year of ownership and successfully implemented
the post-acquisition plan to ensure business continuity and strategic
alignment, the MwT business was relocated to new premises towards the end of
the financial year. This followed disappointing delays in obtaining local US
government building permits required to unlock the efficiency improvements
being targeted, leading to additional, unplanned running costs.
In conjunction with the move to new premises, the leadership team was
strengthened through the appointment of a local VP of Operations, to drive
further efficiencies and resource optimisation in support of the next growth
phase.
One pre-requisite for the MwT acquisition was the signing of a National
Security Agreement (NSA) with the US government and through the last year we
successfully finalised the implementation of the NSA. In December 2024 we
hosted the first government audit, meeting critical regulatory and compliance
milestones.
Outlook
With the successful completion of the operational phase of a multi-year
transformational strategy, the business is now poised to enter a new chapter
focused on sustainable growth and long-term value creation. Over this period,
we have fundamentally reshaped the business, enhancing efficiency, expanding
our technology capabilities, and significantly broadening our product
portfolio to address a more diverse and resilient range of end markets.
While the broader environment continues to reflect the uncertainties
associated with ongoing geopolitical tensions and constrained global demand,
we remain confident in our medium-term prospects. The enhanced product suite
positions us well to capitalise on emerging opportunities across key sectors,
including wireless, network infrastructure, satellite, aerospace &
defence, industrial internet of things (IIoT) and broadcast radio.
Supported by a strong financial foundation and a disciplined growth strategy,
we are well-equipped to navigate current challenges and intend to continue
investing in innovation, customer engagement and strategic partnerships that
will drive the business forward.
For the year ahead, a measured approach to expectations for the opening
six-month period is being taken, amid ongoing market softness and scepticism
around end-customer forecasting. An anticipated improvement in the second half
of the financial year is based upon several factors, including product
shipments recommencing following supplier re-sourcing activities and order
intake through the first half period.
Looking further into the future, the Group's new opportunity pipeline is at
record levels, indicating strong long-term growth momentum. We remain excited
about the road ahead and are committed to delivering value to our stakeholders
as we proceed through the next growth phase.
FINANCIAL REVIEW
Revenue
The Group's full-year revenue was flat at £22.90m (FY24: £22.89m) and
reflected the impact across the year from stubbornly high end-customer and
sales channel inventory levels along with ongoing softness within the
industrial markets being addressed. Most sales transactions are conducted in
US Dollars and a slight currency headwind compared to the prior year reduced
the FY25 reported figure by approximately £0.35m.
Geographically, 47% of the sales were to Asia (FY24: 51%), 30% into the
Americas (FY24: 24%) and 23% into EMEA (FY24: 25%). FY25 included a full
twelve-month contribution from the MwT acquisition whereas FY24 only included
six-months.
Gross profit
Gross profit for the year was £15.89m (FY24: £16.21m) equating to a gross
margin of 69% (FY24: 71%). The 2bps margin decline resulted from a product mix
comprising of a higher contribution from the newer SµRF product range, where
gross margins are typically lower than the Company's established anchor
product line. The sales of products within the latter category suffered more
from the over-inventory situation and softer industrial markets previously
mentioned.
Distribution and administration costs
The Group continues to balance an efficient and effective cost base, with a
strong growth and investment strategy. The first full year inclusion of MwT
was a significant factor in recording a 6% increase in D&A costs to
£15.14m (FY24: £14.23m). The need to temporarily cover the running costs on
two California factory locations whilst awaiting the relevant building permits
to allow a planned relocation of the operation to take place exacerbated the
situation. The move was completed during March 2025. Higher depreciation and
amortisation charges relating to right- of-use assets and development costs
also contributed to the increase.
The Group continued with a strong level of R&D investment focused at
capitalising on the secular growth expected from the market and new
application areas being targeted. Research and development expenditure for the
year was £5.50m (FY24: £4.50m) with £1.29m of this amount expensed (FY24:
£0.96m) and the balance capitalised.
Profit
Stable revenues, slight margin erosion and elevated running costs led to a
reduction in pre-exceptional operating profit to £0.53m (FY24: £1.94m). The
financial impact of restructuring the UK R&D teams led to an exceptional
£1.65m goodwill and intangibles write-off, resulting in an overall loss from
operations of £1.11m (FY24: £1.94m profit).
Excluding the exceptional element, and largely due to finance income of
£0.42m (FY24: £0.55m), profit before tax improved over the operating level
to reach £0.88m (FY24: £2.52m). Inclusion of the exceptional item delivered
a pre-tax loss of £0.77m (FY24: £2.52m profit).
Taxation and EPS
For FY25 the Group has recorded an income tax credit of £0.75m against an
FY24 charge of £0.46m. This was driven by deferred tax differences available
from the acquisition of MwT during the prior financial year, along with
ongoing taxation credits associated with the Group's R&D activities.
Basic earnings per share, pre-exceptional items, amounted to 9.95p (FY24:
13.00p). A loss per share of 0.11p was recorded including the exceptional
goodwill write-off.
Cash
The Group's cash reserves at 31 March 2025 were £9.92m, including short-term
cash deposits of £2.14m. This represents a reduction of £8.29m from the
prior year equivalent date (31 March 2024: £18.21m) and includes an R&D
cash spend of £5.50m, acquisition-related payments of £3.79m, dividend
payments of £1.77m, a £0.60m investment in capex and share buybacks
totalling £0.90m.
The total net cash inflow from operating activities was £3.09m (FY24:
£5.04m).
Inventory
Raised Company raw material inventory levels have been an intentional element
of the Group's approach to addressing semiconductor supply chain disruptions
in recent years. At 31 March 2025, inventories were valued at £5.66m (FY24:
£3.67m).
Pension schemes
The Group operates several pension schemes globally, mostly defined
contribution in nature. In the UK, the Company historically operated a defined
benefit scheme that has been closed to new members and future accruals for
many years. The most recent actuarial estimate, as at 31 March 2025 and based
upon existing funding principles, indicated a net pension surplus of £0.73m
with the funding level at 105%.
When calculated using IAS 19 methodology, the funding position improved
through the year with a deficit of £1.08m being recorded (FY24: £1.70m).
All administrative expenses of running the scheme are met directly by the
scheme along with pension protection fund levies.
Chris Gurry
Group Managing Director
Consolidated income statement
for the year ended 31 March 2025
Unaudited 2025 Audited 2024
Notes Before exceptional items Exceptional items Total Before exceptional items Exceptional items Total
£'000 £'000 £'000 £'000 £'000 £'000
Revenue 1,2 22,899 - 22,899 22,893 - 22,893
Cost of sales (7,010) - (7,010) (6,683) - (6,683)
Gross profit 15,889 - 15,889 16,210 - 16,210
Distribution and administration costs (15,138) - (15,138) (14,226) - (14,226)
Share-based payments (284) - (284) (214) - (214)
467 - 467 1,770 - 1,770
Other operating income 66 - 66 173 - 173
Impairment of goodwill and intangibles 8 - (1,647) (1,647) - - -
(Loss)/profit from operations 533 (1,647) (1,114) 1,943 - 1,943
Other income 31 - 31 62 - 62
Finance income 423 - 423 547 - 547
Finance expense (106) - (106) (37) - (37)
(Loss)/profit before taxation 881 (1,647) (766) 2,515 - 2,515
Income tax credit/(charge) 4 715 33 748 (455) - (455)
(Loss)/profit after taxation attributable to equity owners of the parent 1,596 (1,614) (18) 2,060 - 2,060
All financial information presented relates to continuing activities.
Earnings per share pre-exceptional items from total operations attributable to
the ordinary equity holders of the Company:
Notes 2025 2024
Basic earnings per share 5 9.95p 13.00p
Diluted earnings per share 5 9.93p 12.86p
Earnings per share from total operations attributable to the ordinary equity
holders of the Company:
Notes 2025 2024
Basic earnings per share 5 (0.11)p 13.00p
Diluted earnings per share 5 (0.11)p 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 6.
Notes 2025 2024
Adjusted EBITDA 6 5,218 5,703
Consolidated statement of total comprehensive income
for the year ended 31 March 2025
Unaudited 2025 Unaudited 2025 Audited Audited
£'000 £'000 2024 2024
£'000 £'000
(Loss)/profit for the year (18) 2,060
Other comprehensive income / (expense):
Items that will not be reclassified subsequently to profit or loss:
Re-measurement of defined benefit obligation 803 (361)
Deferred tax on actuarial gain (201) 90
Items reclassified subsequently to profit or loss upon derecognition:
Foreign exchange differences (501) (1,153)
Other comprehensive (expense)/income for the year net of taxation attributable 101 (1,424)
to equity owners of the parent
Total comprehensive income for the year attributable to the equity owners of 83 636
the parent
Consolidated statement of financial position
as at 31 March 2025
Unaudited 2025 Unaudited 2025 Audited Audited
£'000 £'000 2024 2024
£'000 £'000
Assets
Non‑current assets
Goodwill 12,625 14,449
Other intangible assets 2,702 3,350
Development costs 16,944 15,150
Property, plant and equipment 5,685 5,655
Right-of-use assets 2,115 813
Deferred tax assets 1,569 788
41,640 40,205
Current assets
Property, plant and equipment - held for sale 1,124 1,124
Investment properties - held for sale 1,975 1,975
Inventories 5,663 3,672
Trade receivables and prepayments 2,867 3,734
Current tax assets - 190
Cash, and cash equivalents 7 7,782 11,262
Short-term cash deposits 7 2,136 6,951
21,547 28,908
Total assets 63,187 69,113
Liabilities
Current liabilities
Trade and other payables 4,833 7,528
Provisions 196 208
Lease liabilities 395 219
Current tax liabilities 47 16
5,471 7,971
Non‑current liabilities
Deferred tax liabilities 5,324 5,224
Trade and other payables 447 2,509
Lease liabilities 1,863 637
Retirement benefit obligation 1,076 1,696
8,710 10,066
Total liabilities 14,181 18,037
Net assets 49,006 51,076
Capital and reserves attributable to equity owners of the parent
Share capital 825 825
Share premium 2,258 2,327
Capital redemption reserve 8,372 8,372
Other reserve 2,929 3,073
Treasury shares - own share reserve (2,175) (1,822)
Share‑based payments reserve 917 666
Foreign exchange reserve (612) (111)
Retained earnings 36,492 37,746
Total shareholders' equity 49,006 51,076
Consolidated cash flow statement
for the year ended 31 March 2025
Unaudited Audited
2025 2024
£'000 £'000
Operating activities
Profit for the year before taxation (766) 2,515
Adjustments for:
Foreign exchange movement (48) (140)
Depreciation - on property, plant and equipment 563 520
Depreciation - on right-of-use assets 899 486
Impairment of goodwill 1,531 -
Amortisation of development costs 2,402 2,110
Impairment of other intangible assets 116 -
Amortisation of other intangible assets 506 368
Loss on disposal of fixed assets - 5
Movement in non‑cash items (retirement benefit obligation) 183 131
Share‑based payments 284 214
Finance income (423) (547)
Finance expense 106 37
Movement in working capital (2,201) (1,966)
Cash flows from operating activities 3,152 3,733
Income tax (paid)/received (60) 1,311
Net cash inflow from operating activities 3,092 5,044
Investing activities
Purchase of property, plant and equipment (595) (1,524)
Investment in development costs (4,217) (3,541)
Repayment / (investment) of fixed term deposits (net) 4,815 (5,733)
Acquisition of subsidiary (net of cash acquired) (3,786) (565)
Investment in intangibles (32) (32)
Finance income 423 547
Net cash outflow from investing activities (3,392) (10,848)
Financing activities
Lease liability repayments (884) (502)
Issue of ordinary shares (net of expenses) 475 117
Purchase of own shares for treasury (897) (1,750)
Dividends paid to shareholders (1,765) (1,739)
Finance expense (20) (4)
Net cash outflow from financing activities (3,091) (3,878)
Decrease in cash and cash equivalents (3,391) (9,682)
Movement in cash and cash equivalents:
At start of year 11,262 21,041
Decrease in cash and cash equivalents (3,391) (9,682)
Effects of exchange rate changes (89) (97)
At end of year 7,782 11,262
Cash flows presented exclude sales taxes.
Consolidated statement of changes in equity
for the year ended 31 March 2025
Share capital £'000 Share premium £'000 Redemption reserve £'000 Other reserve £'000 Treasury shares £'000 Share‑based payments £'000 Foreign exchange reserve £'000 Retained earnings £'000 Total
£'000
At 31 March 2023 - audited 796 2,462 8,372 - (324) 488 1,042 37,918 50,754
Profit for year 2,060 2,060
Other comprehensive income
Foreign exchange differences (1,153) (1,153)
Re-measurement of defined benefit obligations (361) (361)
Deferred tax on actuarial gain 90 90
Total comprehensive income for year
- - - - - - (1,153) 1,789 636
796 2,462 8,372 - (324) 488 (111) 39,707 51,390
Transactions with owners in their capacity as owners
Issue of ordinary shares - acquisition 29 3,073 3,102
Issue of treasury shares (135) 252 117
Purchase of own shares - treasury (1,750) (1,750)
Dividend paid (1,739) (1,739)
Total transactions with owners in their capacity as owners 29 (135) - 3,073 (1,498) - - (1,739) (270)
Share‑based payment charge 214 214
Deferred tax on share-based payments (258) (258)
Cancellation/transfer of share‑based payments (36) 36 -
At 31 March 2024 - audited 825 2,327 8,372 3,073 (1,822) 666 (111) 37,746 51,076
Loss for year (18) (18)
Other comprehensive income
Foreign exchange differences (501) (501)
Re-measurement of defined benefit obligations 803 803
Deferred tax on actuarial gain (201) (201)
Total comprehensive income for year
- - - - - - (501) 584 83
825 2,327 8,372 3,073 (1,822) 666 (612) 38,330 51,159
Transactions with owners in their capacity as owners
Issue of ordinary shares - acquisition (144) (144)
Issue of treasury shares (69) 544 475
Purchase of own shares - treasury (897) (897)
Dividend paid (1,765) (1,765)
Total transactions with owners in their capacity as owners - (69) - (144) (353) - - (1,765) (2,331)
Share‑based payment charge 284 284
Deferred tax on share-based payments (106) (106)
Cancellation/transfer of share‑based payments (33) 33 -
At 31 March 2025 - unaudited 825 2,258 8,372 2,929 (2,175) 917 (612) 36,492 49,006
1 Segmental analysis
Reported segments and their results in accordance with IFRS 8, are based on
internal management reporting information that is regularly reviewed by the
chief operating decision maker (C. A. Gurry). The measurement policies the
Group uses for segmental reporting under IFRS 8 are the same as those used in
its financial statements.
The Group is focused for management purposes on one operating segment, which
is reported as 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 information (by origin)
UK Americas Far East Total
£'000 £'000 £'000 £'000
Year ended 31 March 2025 - unaudited
Revenue to third parties - by origin 4,623 7,500 10,776 22,899
Property, plant and equipment 5,415 234 36 5,685
Right-of-use assets 300 1,732 83 2,115
Investment properties - held for sale 1,975 - - 1,975
Property, plant and equipment - held for sale 1,124 - - 1,124
Development costs 14,853 890 1,201 16,944
Intangibles - software and intellectual property 321 - 48 369
Goodwill - 7,271 5,354 12,625
Other intangible assets arising on acquisition - 2,238 95 2,333
Total assets 46,740 6,036 10,411 63,187
Year ended 31 March 2024 - audited
Revenue to third parties - by origin 5,546 5,802 11,545 22,893
Property, plant and equipment 5,479 119 57 5,655
Right-of-use assets 373 275 165 813
Investment properties - held for sale 1,975 - - 1,975
Property, plant and equipment - held for sale 1,124 - - 1,124
Development costs 13,621 272 1,257 15,150
Intangibles - software and intellectual property 323 - 62 385
Goodwill 1,531 7,429 5,489 14,449
Other intangible assets arising on acquisition 133 2,585 247 2,965
Total assets 53,961 4,473 10,679 69,113
2 Revenue
The geographical classification of business turnover (by destination) is as
follows:
Unaudited 2025 Audited
£'000 2024
£'000
Europe 4,485 4,895
Far East 10,856 11,754
Americas 6,827 5,524
Others 731 720
22,899 22,893
3 Dividend - paid and proposed
During the year a final dividend of 6p per ordinary share was paid in respect
of the year ended 31 March 2024. An interim dividend of 5p per ordinary
share was paid on 13 December 2024 to shareholders on the Register on 29
November 2024.
It is proposed to pay a final dividend of 6p per ordinary share, taking the
total dividend amount in respect of the year ended 31 March 2025 to 11p. It is
proposed to pay the final dividend of 6p, if approved, on 15 August 2025 to
shareholders registered on 1 August 2025 (2024: paid 16 August 2024 to
shareholders registered on 2 August 2024).
4 Income tax expense
a) Analysis of tax expense in period
Unaudited 2025 Audited
£'000 2024
£'000
Current tax
UK corporation tax on results of the year - (155)
Adjustment in respect of previous years 1 114
1 (41)
Foreign tax on results of the year 228 215
Total current tax 229 174
Deferred tax
Deferred tax - origination and reversal of temporary differences (910) 259
Adjustments to deferred tax charge in respect of previous years (67) 22
Total deferred tax (977) 281
Tax (credit)/expense on profit on ordinary activities (748) 455
5 Earnings per ordinary share
Unaudited 2025 Audited
2024
Earnings per share pre-exceptional items attributable to the ordinary equity
holders of the Company:
Basic earnings per share 9.95p 13.00p
Diluted earnings per share 9.93p 12.86p
Unaudited 2025 Audited
2024
Earnings per share from total operations attributable to the ordinary equity
holders of the Company:
Basic (loss)/earnings per share (0.11)p 13.00p
Diluted (loss)/earnings per share (0.11)p 12.86p
Unaudited 2025 Audited 2024
Basic earnings per share Profit Weighted average number of shares Profit per share Profit Weighted average number of shares Profit per
£'000 Number p £'000 Number share
p
Basic earnings per share - from profit for year 1,596 16,030,969 9.95 2,060 15,842,911 13.00
Diluted earnings per share
Basic earnings per share 1,596 16,030,969 9.95 2,060 15,842,911 13.00
Dilutive effect of share options - 35,010 (0.02) - 173,856 (0.14)
Diluted earnings per share - from profit for year 1,596 16,065,979 9.93 2,060 16,016,767 12.86
The calculation of basic and diluted earnings per share pre-exceptional is
based on the profit attributable to ordinary shareholders, divided by the
weighted average number of shares in issue during the year, as shown above.
Unaudited 2025 Audited 2024
Basic earnings per share Loss Weighted average number of shares Profit per share Profit Weighted average number of shares Profit per
£'000 Number p £'000 Number share
p
Basic (loss)/earnings per share - from (loss)/profit for year (18) 16,030,969 (0.11) 2,060 15,842,911 13.00
Diluted earnings per share
Basic (loss)/earnings per share (18) 16,030,969 (0.11) 2,060 15,842,911 13.00
Dilutive effect of share options - 35,010 - - 173,856 (0.14)
Diluted (loss)/earnings per share - from (loss)/profit for year (18) 16,065,979 (0.11) 2,060 16,016,767 12.86
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 shown above.
6 Adjusted EBITDA
Adjusted earnings before interest, tax, depreciation and amortisation
(Adjusted EBITDA) is defined as profit from operations before all interest,
tax, depreciation and amortisation charges, exceptional items and before
share‑based payments. The following is a reconciliation of the Adjusted
EBITDA for the years presented:
2025 2024
£'000 £'000
(Loss)/profit before taxation (earnings) (766) 2,515
Adjustments for:
Finance income (423) (547)
Finance expense 106 37
Depreciation 563 520
Depreciation - right-of-use assets 899 486
Amortisation of development costs 2,402 2,110
Amortisation of other intangible assets 506 368
Share‑based payments 284 214
Impairment of goodwill 1,531 -
Impairment of intangible assets 116 -
Adjusted EBITDA 5,218 5,703
7 Cash, cash equivalents and fixed term deposits
Unaudited Audited
2025 2024
£'000 £'000
Cash equivalents 2,762 3,095
Cash at bank 5,020 8,167
7,782 11,262
Short-term cash deposits 2,136 6,951
9,918 18,213
8 Impairment of goodwill and intangibles
Unaudited 2025 Audited
£'000 2024
£'000
Impairment of goodwill 1,531 -
Impairment of intangible assets 116 -
1,647 -
During the year the Group restructured its engineering resources which lead to
the goodwill and intangibles relating to the acquisition of PRFI Ltd in March
2020 to be impaired to £Nil.
9 Principal risks and uncertainties
Key risks of a financial nature
Risk Mitigation
Imposition of trade tarrifs The Group operates internationally and, while it has not yet been directly
affected by the recent increases in trade tariffs, it is likely that if
Consequence of imposed trade tariffs on the global economy, potential downward further tariffs are imposed or the current situation persists for an extended
impact on revenue and profitability. period of time, the Group may be directly or indirectly impacted, which could
result in a loss of revenue and profitability for the Group.
The Directors are constantly reviewing the potential impact of trade tariffs
not only on the Group's direct customers but also on its customers' customers
and on the supply chain to ensure that appropriate actions can be taken to
minimise any impact.
Foreign exchange The Group's earnings are linked to the US Dollar, a decline in this currency
will have a direct effect on both transactional and translational foreign
The majority of the Group's cash is in Sterling, foreign exchange exposure is exchange risk.
managed through the sale and
purchase of currencies as required.
The Group maintains a natural hedge by matching the cash inflows and cash
outflows, which reduces the risk at the gross profit line.
Customer dependency The Group has a very diverse customer base generally, key customer
relationships are closely monitored; however, changes in buying patterns of
In any reporting period a small number of our key key customers could have an adverse effect on the Group's performance,
financial condition and results from operations. As we expand our product
customers can represent a significant amount of revenue. range this is widening our addressable market and reducing customer dependency
further.
Supply chain dependency, interruption and cost inflation The Group has strong operational relationships with its suppliers, which are
important for maintaining product and supply and minimising the impact from
The Group's products are developed on specific silicon or compound any potential supply chain disruption. For other key materials and services,
semiconductor processes that are inherently such as product assembly and packaging, the Group operates a dual-sourcing
policy where practical.
sole sourced.
The Group has increased levels of inventory held to protect against
disruption. If a key raw material supplier was unable to continue supply on
a permanent basis, then the Group would need to invest the R&D effort and
associated costs to replace the supplier, subject to that being considered
commercially viable.
Supplier prices, currency exchange rates and gross margins are continually
monitored, which can lead to pricing adjustments with customers.
Credit risk The Group monitors ageing receivables on a regular basis and takes action to
enforce the collection of overdue debts. There is no recent history of
Potential exposure to bad debt risk from customers. material bad debts in the Group.
IT systems - failure or malicious damage The Group has a standardised systematic approach to maintaining and operating
its IT systems globally. There is a risk to the Group if there is unauthorised
The Group relies on IT systems to support its business operations. access to its IT systems which could cause manufacturing disruptions and a
potential impact on revenue and profit.
Key risks of a non-financial nature
Risk Mitigation
Customer product demand The Group operates in a highly competitive global market that is evolving
continually.
Demand for our product is ultimately dependent on the success and demand of
our customer's products of which
we are a component supplier. The Group's ability to respond to many competitive factors including, but not
limited to, pricing, technological innovations, product quality, customer
service, raw material availabilities, manufacturing capabilities and
employment of qualified personnel is key to the achievement of its objectives.
Expansion of the customer base is a key focus to help mitigate this risk.
Legal requirements The Group's ability to achieve its financial objectives could be impacted by
risks and uncertainties associated with local legal requirements, political
A large proportion of the Group's revenue and earnings risk, the enforceability of laws and contracts, changes in the tax laws,
terrorist activities, natural disasters or health epidemics.
are derived from outside the UK.
The Group partially manages this risk by working with local professional
advisors to ensure that all local laws and regulations are complied with.
Understanding of the development, performance or position of the Company's The Directors do not believe that environmental matters, details of the
business Group's employees (including gender) and social, community and human rights
issues are needed for an understanding of the development, performance or
Impact of the Group's business in relation to actions of position of the Group's business. Accordingly, these have not been included
within the Strategic Report but have been added to the Directors' Report
local government, political events and the environment. and Environment, social and governance sections of this Annual Report.
10 Significant accounting policies
The accounting policies used in preparation of the annual results announcement
are the same accounting policies set out in the year ended 31 March 2024
financial statements.
11 Basis of preparation
These Unaudited Condensed Consolidated Financial Statements have been prepared
in accordance with UK adopted International Accounting Standards and are in
conformity with the requirements of the Companies Act 2006. They do not
include all of the information required for full annual statements and should
be read in conjunction with the 2025 Annual Report.
The comparative figures for the financial year 31 March 2024 have been
extracted from the Group's statutory accounts for that financial year. The
statutory accounts for the year ended 31 March 2024 have been filed with the
registrar of Companies. The auditor reported on those accounts: their report
was (i) unqualified, (ii) did not include references to any matters to which
the auditor drew attention by way of emphasis without qualifying the reports
and (iii) did not contain statements under section 498(2) or (3) of the
Companies Act 2006.
The statutory accounts for the year ended 31 March 2025 are expected to be
finalised on the basis of the financial information presented by the Directors
in this preliminary announcement and signed following approval by the Board of
Directors on 7 July 2025 and will be delivered to the Registrar of Companies
following the Company's Annual General Meeting on 5 August 2025.
The financial information contained in this announcement does not constitute
statutory accounts for the year ended 31 March 2025 or 2024 as defined by
Section 434 of the Companies Act 2006.
A copy of this announcement can be viewed on the company website
http://www.cmlmicroplc.com (http://www.cmlmicroplc.com) .
12 Approval
The Directors approved this preliminary results announcement on 23 June 2025.
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