21st Nov 2006 07:01
CML Microsystems PLC21 November 2006 CML MICROSYSTEMS Plc INTERIM RESULTS CML Microsystems Plc ("CML"), which designs, manufactures and markets a broadrange of semiconductor products, primarily for the global communications market,announces its Interim Results for the half year ended 30 September 2006. CML's semiconductor solutions serve customers in the wire-line telecom, wirelessdata, two-way radio, memory card controller and programmable platform markets.Operations are in the UK, Germany, the US, Singapore, China and Taiwan. Commenting on the results, George Gurry, Chairman said: "As advised with my AGM Statement in August, the Group's trading results for theopening half are significantly down against those for the comparable period theyear earlier." Financial Highlights • Turnover down 34% to £9.46m (2005: £14.24m)• Loss before tax of £0.8m (2005: Profit before tax of £1.4m)• Loss per share of 4.90p (2005: Earnings per share of 7.83p)• Cash reserves remain at a satisfactory level Business Review • Reduction in shipments to key Memory Card Controller, with customer exiting the Flash Memory market• Good progress in product markets generally• Increased customer design-in activity and customers entering production phase for two-way Radio• New high performance Radio Frequency product for professional digital radio has begun deliveries• Delays in new product development for Memory Controller and Programmable Platform areas• Second half losses will be materially above those recorded in the first half Regarding prospects, George Gurry, Chairman said: "I will not conceal my disappointment with these results and the present outlookfor the second half, but I balance the causes and the performance strengths ofyour Company to expect a return to profitability reasonably soon thereafter." Enquiries: CML Microsystems Plc www.cmlmicroplc.comNigel Clark, Financial Director 020 7493 3716 (today)Chris Gurry, Business Development Director 01621 875500 (thereafter) Parkgreen Communications Ltd 020 7493 3716Paul McManus 07980 541 893 Chairman's Statement As advised with my AGM Statement in August, the Group's trading results for theopening half are significantly down against those for the comparable period theyear earlier. Group revenues for the six month period ending 30 September 2006 show a declineof 34% to £9.46m (2005: £14.24m) and a corresponding loss is recorded of £0.8magainst the prior-year first-half profit of £1.4m. Despite good progress within the Americas, and with products for the Group'shistoric market areas, it has not been possible to offset the revenue losscreated by the severe reduction in product shipments to a key Memory CardController customer during the period. Any confidence that this reduction wouldbe of a short-term nature has been dispelled by their recently announceddecision to exit the Flash Memory market area where the Group's Hyperstoneproducts were used. In product markets generally, good progress is being achieved through theGroup's strategy of expanding product integration, reducing time to market andimproving commercial competitiveness. Product R&D expenditure remains stronglyfocussed on this area. We are seeing increased customer design-in activity as the result of higherintegration of features in our range of Wireline Modems for data communication,and customers are entering production phase for Two-Way Radio equipments basedon our proprietary FirmASIC technology. The Group's new high performance RF(Radio Frequency) product for professional digital radio applications has begundeliveries. New product developments in the Memory Controller and Programmable Platformareas have experienced difficulties and delays that have impacted productintroduction and customer adoption. As a result, it is unlikely that keyproduct introductions now expected in the coming months will deliver revenuebenefit in the current financial year, and consequently second-half losses willbe materially above those recorded in the first-half. Your Board is takingsteps to improve the Group's performance in this area. I will not conceal my disappointment with these results and the present outlookfor the second half, but I balance the causes and the performance strengths ofyour Company to expect a return to profitability reasonably soon thereafter. G. W. GurryChairman21st November 2006 CML Microsystems PlcConsolidated Income Statement 6 Months End 6 Months End 12 Months End 30/09/06 30/09/05 31/03/06 £'000 £'000 £'000Continuing OperationsRevenue 9,460 14,240 26,333Cost of sales (3,455) (6,292) (10,473)Gross Profit 6,005 7,948 15,860 Distribution and administration costs (7,149) (6,632) (13,409) (1,144) 1,316 2,451 Other operating income 374 156 472Operating (loss)/profit before adjustments (770) 1,472 2,923 Share based payments (40) (40) (79)Operating (loss)/profit after adjustments (810) 1,432 2,844 Revaluation of investment properties - - 695Finance cost (110) (112) (233)Finance income 88 96 180(Loss)/profit before tax (832) 1,416 3,486 Income Tax 100 (250) (853) (Loss)/profit for the period attributable toequity shareholders (732) 1,166 2,633 (Loss)/earnings per shareBasic (4.90p) 7.83p 17.68pDiluted (4.90p) 7.77p 17.66p Statement of Recognised Income and Expense 6 Months End 6 Months End 12 Months End 30/09/06 30/09/05 31/03/06 £'000 £'000 £'000 (Loss)/profit for the period (732) 1,166 2,633 Foreign exchange differences (261) 187 350Actuarial gain - - 222Income tax on actuarial gain - - (67) Recognised gains and losses relating to theperiod (993) 1,353 3,138 CML Microsystems Plc Consolidated Balance Sheet 30/09/06 30/09/05 31/03/06 £'000 £'000 £'000AssetsNon current assetsTangible assets - Property, plant and equipment 7,084 7,205 7,256Tangible assets - Investment properties 3,845 3,150 3,845Intangible assets - Research & development 6,789 5,396 6,133Intangible assets - Goodwill on consolidation 3,512 3,512 3,512Deferred tax asset 1,159 1,583 1,165 22,389 20,846 21,911Current assetsInventories 1,766 1,944 2,233Trade receivables and prepayments 3,985 5,310 5,436Cash and cash equivalents 3,978 7,413 5,708 9,729 14,667 13,377 Total assets 32,118 35,513 35,288 LiabilitiesCurrent liabilitiesBank loans and overdrafts 4,000 4,000 4,000Trade and other payables 2,826 5,293 3,297Current tax liabilities 302 413 365 7,128 9,706 7,662 Non current liabilitiesDeferred tax liabilities 3,135 2,624 3,159Provisions 52 319 147Retirement benefit obligations 3,135 3,504 3,135 6,322 6,447 6,441 Total liabilities 13,450 16,153 14,103 Net Assets 18,668 19,360 21,185 EquityShare capital 747 745 745Convertible warrants - 120 120Capital reserves 4,148 4,039 4,039Share based payments 202 122 162Foreign exchange differences 49 147 310Accumulated profits 13,522 14,187 15,809Shareholders' equity 18,668 19,360 21,185 CML Microsystems Plc Consolidated Cash Flow Statement 6 Months End 6 Months End 12 Months End 30/09/06 30/09/05 31/03/06 £'000 £'000 £'000Operating activitiesNet (loss)/profit for the period before income taxes (832) 1,416 3,486Adjustments for:Revaluation of investment properties - - (695)Depreciation 377 295 666Movement in pension deficit - - (147)Amortisation of research and development 1,895 1,730 4,005Share based payments 40 40 79Exceptional restructuring costs (95) - (273)Interest expense 110 112 233Interest income (88) (96) (180)Increase/(decrease) in working capital 1,159 (537) (2,533)Cash flows from operating activities 2,566 2,960 4,641Income tax refunded 334 99 69Net cash flows from operating activities 2,900 3,059 4,710 Investing activitiesPurchase of tangible fixed assets (281) (305) (722)Investment in intangible assets (2,605) (2,049) (5,063)Disposals of tangible fixed assets 32 4 19Interest income 88 96 180Net cash flows from investing activities (2,766) (2,254) (5,586) Financing activitiesIssue of ordinary shares - 32 32Repayment of bank loan - (378) (377)Dividends paid to group shareholders (1,564) (1,563) (1,563)Interest expense (110) (112) (233)Net cash flows from financing activities (1,674) (2,021) (2,141) Decrease in cash and cash equivalents (1,540) (1,216) (3,017) Movement in cash and cash equivalents:At start of period 5,708 8,449 8,449Decrease (1,540) (1,216) (3,017)Effects of exchange rate changes (190) 180 276At end of period 3,978 7,413 5,708 CML Microsystems Plc Consolidated Statement of Changes in Equity Share Convertible Capital Share based Foreign Accumulated Total capital warrants reserve payments exchange profits differences £'000 £'000 £'000 £'000 £'000 £'000 £'000 At 1st April 2005 744 120 4,008 82 (40) 14,584 19,498 Shares issued 1 31 32Foreign exchangedifferences 187 187Dividends paid (1,563) (1,563)Profit for period 1,166 1,166Share based payments 40 40 At 30th September 745 120 4,039 122 147 14,187 19,360 2005 Foreign exchange 163 163differencesNet actuarial gainsrecognised directly toequity 222 222Deferred tax on actuarialgains (67) (67)Profit for period 1,467 1,467Share based payments 40 40 At 31st March 2006 745 120 4,039 162 310 15,809 21,185 Shares issued 2 (120) 109 9 -Foreign exchangedifferences (261) (261)Dividends paid (1,564) (1,564)Loss for period (732) (732)Share based payments 40 40 At 30th September 747 - 4,148 202 49 13,522 18,668 2006 CML Microsystems Plc Notes 1. Presentation of results The directors approved this Interim Statement on 20th November 2006. The financial information contained in this Interim Statement has been preparedusing International Financial Reporting Standards. The accounting policies usedin preparation of the Interim Statement are the same accounting policies set outin the year ended 31st March 2006 financial statements. This Interim Statementdoes not constitute statutory accounts as defined by Section 240 of theCompanies Act 1985. The financial information for the year ended 31st March 2006is based on the statutory accounts for the financial year ended 31st March 2006that have been filed with the Registrar of Companies and on which the auditorsgave an unqualified audit opinion. The auditors report on those accounts did notcontain a statement under section 237(2) or (3) of the Companies Act 1985. All shareholders will be sent a copy of this Interim Statement which can also beobtained from the company's registered office at Oval Park, Maldon, Essex CM96WG, England. 2. Dividend The directors do not recommend the payment of an interim dividend. 3. Income tax The directors consider that tax will be payable at varying rates according tothe country of incorporation of a subsidiary and have provided on that basis.Deferred taxation is not reassessed at the interim stage. 6 Months End 6 Months End 12 Months End 30/09/06 30/09/05 31/03/06 £'000 £'000 £'000 UK income tax - 172 474Overseas income tax 100 (422) (452)Total current tax 100 (250) 22Deferred tax - - (875)Reported income tax 100 (250) (853) 4. Earnings per share The calculation of basic earnings per share is based on the profit attributableto shareholders for the period and on the following weighted average number ofshares in issue: Ordinary 5p shares Weighted Average Number Diluted Number6 months ended 30th September 2006 14,919,839 14,919,8396 months ended 30th September 2005 14,891,212 15,004,91412 months ended 31st March 2006 14,892,052 14,904,918 The calculation for diluted earnings per share takes into consideration 721,630of shares under option at 30th September 2006. 5. Retirement benefit obligations The directors have not obtained an actuarial report in respect of the definedbenefit pension scheme for the purpose of this Interim Statement. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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