Final Results

CML Microsystems PLC
10 June 2003


For release

10 June 2003

7.00am

CML MICROSYSTEMS Plc

                               2003 FINAL RESULTS

            Results in Line with Expectations; Maintained Dividend;

                    Board Confident the Group is well placed


CML Microsystems Plc ('CML'), which designs, manufactures and markets a broad
range of semiconductor products, primarily for the global communications market,
announces its Final Results for the full year ended 31 March 2003.


CML's semiconductor circuits and devices serve customers in electronic
manufacture, assembly and distribution in the wire-line telecom, wireless data
and private mobile/and radio markets. CML is listed on the London Stock Exchange
and is traded OTC as an ADR in the US. The group has operating subsidiaries in
the UK, US and Singapore.


Commenting on the results, George Gurry, Chairman said:

'In my interim statement dated 19 November 2002, I stated that it would be
challenging for the group to avoid reporting a loss for the full year and I am
disappointed to reveal that this has proven to be the case.


Although these results are in line with market expectations, the underlying
product sales achieved into historically good geographical areas for the group,
such as Korea and parts of Europe, declined further in the second half and firm
signs of a significant improvement are not yet apparent.


Despite these challenging conditions, the group has a policy of focussed
investment in product development. For 2003, R&D activities for the year
increased, with expenditure of £2.28m, up 17%.'


Financial Highlights

-      Turnover of £12.38m, (2002: £16.24m), down 24%.
-      Operating loss £0.578m (2002: £1.588m profit).
-      Pre-tax loss £322k (2002: profit before tax £2.10m).
-      Basic EPS of 0.53p (2002:12.51p); improved tax position.
-      Net cash reserves of £9.59m (2002: £11.77m).
-      Shareholders net assets per share stood at 132.97p (2002: 141.31p).
-      Cash flow from trading operations positive.
-      Cash per share of 65.65p (2002: 80.54p).
-      2003 R&D increased to £2.28m (2002: £1.94m) up over 17%.
-      Dividend maintained at 10.5p per share (2002: 10.5p).
-      Underlying operating costs reduced by 11% to £7.36m (2002: £8.24m).


Business Review

-      CML Microcircuits (UK) significant decline in sales, Korea, Italy, Spain
        the largest shortfalls.
        - As conditions improve, Company active in exploiting opportunities.
-      USA to play increasing role in future success.
-      Singapore subsidiary showed greater resilience.
        - China becoming an increasingly important market.
-      New subsidiary formed called Applied Technology (UK).
        - Specialist RF and software skills for current and emerging markets.


Regarding prospects, George Gurry, Chairman said:

'I remain confident that the group is well placed to respond appropriately to
conditions as they change.'


Enquiries:
CML Microsystems Plc                                  www.cmlmicroplc.com
Nigel Clark, Financial Director                       020 7786 9600 (today)
Chris Gurry, Business Development Director            01621 875500 (thereafter)

Binns & Co PR
Peter Binns/Paul McManus/Kerry Hopkins                020 7786 9600



CML MICROSYSTEMS Plc

PRELIMINARY RESULTS


Chairman's Statement


The results for the full trading year to 31st March 2003 reflect the uncertainty
and reduced visibility that continue to be evident within the Group's principal
trading markets. In my interim statement dated 19th November 2002, I stated that
it would be challenging for the Group to avoid reporting a loss for the full
year and I am disappointed to reveal that this has proven to be the case.


Although these results are in line with market expectations, the underlying
product sales achieved into historically good geographical areas for the Group,
such as Korea and parts of Europe, declined further in the second half and firm
signs of a significant improvement are not yet apparent.


Trading during the final quarter of the year did stabilise and despite the now
characteristic visibility problems that continue, activity in the Group's main
market areas does not appear to be declining further. This does, however,
reflect the trend that your Company saw towards the end of the prior financial
year and caution must be exercised in the absence of any clear market
indicators.


Group turnover for the year amounted to £12.387m which represents a 24%
reduction on the prior year (2002: £16.247m). The principal reason for the
shortfall can be attributed to significantly reduced shipments of products
across most territories and in each of the Group's principal market categories.


As a result of these reduced sales levels, an operating loss of £0.649m was
reported for the second half (2002: £0.51m) resulting in a full year operating
loss of £0.578m (2002: £1.588m profit).


Due to a decline in interest rates and cash reserves, interest received fell to
£256k (2002: £513k). Other operating income was up with the two principal
components of this category being the repayment of a debt previously provided
against (£500k) and income from the rental of properties.


Appropriate management of the Group's resources without negatively impacting
performance levels is a key objective for your Directors. Excluding R&D
expenditure, underlying operating costs for the year were reduced by 11% to
£7.36m (2002: £8.24m).


A pre-tax loss of £322k (2002: £2.101m) is reported for the full year.


The Group continues to benefit from R&D Tax Credit Legislation. This benefit
coupled with non-taxable income has resulted in a positive tax charge and a
profit after tax for the year of £80k (2002: £1.818m).


With the decline in after tax profit, basic earnings per share fell to 0.53p
(2002: 12.51p) although, as for the prior year, the extent of the decline was
diminished by the Group's improved tax position.


Cash reserves at the year-end fell to £9.599m (2002: £11.773m). The majority of
this reduction is attributable to the dividend payment and the decline in the US
Dollar rate over the trading period. Cash-flow from trading operations was
positive after taking into account other income. Cash per share fell to 65.65p
(2002: 80.54p).


As a result of certain properties no-longer being used for trading activities
they have been let to third-parties and accordingly, the accounting treatment of
these properties has changed to comply with SSAP 19, 'Accounting for Investment
Properties'. The revaluation of these properties has resulted in a value
increase of £0.986m, which has been posted to Revaluation Reserve.


Despite these challenging conditions, the Group has a policy of focussed
investment in product development. For 2003, R&D activities for the year
increased and expenditure amounted to £2.28m, an advance of just over 17% (2002:
£1.94m).


In recommending a maintained dividend for the year of 10.5p per share (2002:
10.5p per share), your Directors are reaffirming their belief that the Group's
financial stability and operational strengths are considered satisfactory to
return to growth. The dividend, if approved, will be payable on 1st August 2003
to all shareholders registered on 4th July 2003.


The Group's UK semiconductor operation, CML Microcircuits (UK) Ltd, posted a
significant overall decline in sales during the year. A number of countries
serviced by the UK company returned disappointing year-on-year figures, with
Korea, Italy and Spain posting the largest shortfalls. That said, your Company
is active in ensuring it is fully capable of exploiting opportunities in these
markets as conditions improve.


Sales into the Americas via CML Microcircuits (USA) Inc. persisted at reduced
levels after the interim stage. The operation continues to benefit from
reorganisation activities instigated during the last 18 months and is well
positioned to serve the territory as conditions pick up. Your Director's are
fully committed to ensuring that the US operation plays an increasing role in
the future success of the Group.


Territories served by the group's Singaporean subsidiary showed much greater
resilience than the rest of the world. As I reported at the interim stage, China
is becoming an increasingly important market for the Group and the formation of
an office in Shanghai during the year was completed. The contribution to group
turnover from CML Microcircuits (Singapore) Ltd increased on the prior year,
with China and Hong Kong contributing the most. It remains to be seen if the
recent SARS health issue in the region will adversely affect the Group's
prospects for the coming year.


Your Company formed a new subsidiary during the year, Applied Technology (UK)
Ltd and by 31st March the operation was fully staffed in accordance with initial
objectives. This expansion brings specialist RF and software skills to the group
and will allow your Company to better exploit emerging opportunities within
existing and new semiconductor target markets.


As I have stated, activity within the Company's target market categories and
territories is, on the whole, at reduced levels. There are no indications of an
upturn in the first six months of the current year, but I remain confident that
the group is well placed to respond appropriately to conditions as they change.


I cannot close without mentioning the vital contribution that the Group's
employees have made to the stability and success of your Company. Your Directors
and I would like to extend sincere thanks and appreciation for their loyal
support and committed efforts throughout the year.


G W Gurry

Chairman

10 June 2003.



CML Microsystems Plc

Preliminary Announcement for the Year ended 31st March 2003


Group Profit and Loss Account
                                                        Unaudited      Audited
                                                             Year         Year
                                                              End          End
                                                        3/31/2003    3/31/2002
                                                            £'000        £'000

Turnover                                                   12,387       16,247

Cost of sales                                              (4,064)      (4,686)
                                                           --------      -------

Gross Profit                                                8,323       11,561

Distribution costs and administration expenses             (9,634)     (10,184)
                                                           --------      -------
                                                           (1,311)       1,377

Other operating income                                        733          211
                                                           --------      -------
Operating (Loss)/Profit                                      (578)       1,588

Interest Receivable                                           256          513
                                                           --------      -------
(Loss)/Profit on Ordinary Activities before Taxation         (322)       2,101

Taxation                                                      402         (283)
                                                           --------      -------
Profit on Ordinary Activities after Taxation                   80        1,818

Minority Interest                                              (3)          11
                                                           --------      -------
Profit for the Financial Year                                  77        1,829

Proposed Dividend                                          (1,535)      (1,535)
                                                           --------      -------
Retained (Loss)/Profit for the Year                        (1,458)         294
                                                           ========      =======

Basic Earnings Per Share                                     0.53p       12.51p
                                                           ========      =======

Diluted Earnings Per Share                                   0.53p       12.33p
                                                           ========      =======

Statement of Total Recognised Gains and Losses
                                                            £'000        £'000

Profit for the financial period                                77        1,829
Unrealised surplus on revaluation of properties               986            -

Currency translation differences on foreign currency         
net investments                                              (747)         (31)

                                                           --------      -------
Total gains and losses recognised since last Report           
and Accounts                                                  316         1,798
                                                           ========      =======


CML Microsystems Plc

Preliminary Announcement for the Year ended 31st March 2003


Summary Group Balance Sheet
                                                    Unaudited         Audited
                                                         Year            Year
                                                          End             End
                                                    3/31/2003       3/31/2002
                                                        £'000           £'000

Fixed Assets
Tangible Assets                                         9,937           9,280
                                                       --------         -------

Current Assets
Stocks                                                  1,326           1,633
Debtors                                                 2,480           2,079
Investments                                             8,255           9,207
Cash at Bank & in Hand                                  1,344           2,566
                                                       --------         -------
                                                       13,405          15,485
Creditors:
Amounts falling due within one year                    (3,325)         (3,577)
                                                       --------         -------
Net Current Assets                                     10,080          11,908
                                                       --------         -------

Total Assets less current liabilities                  20,017          21,188

Provision for liabilities and charges                    (573)           (532)
                                                       --------         -------
Net Assets                                             19,444          20,656
                                                       --------         -------

Capital & Reserves
Called up Share Capital                                   731             731
Share Premium Account                                   3,241           3,237
Capital Redemption Reserve                                255             255
Revaluation Reserve                                       986               -
Profit & Loss Account                                  14,228          16,433
                                                       --------         -------

Shareholders' Funds                                    19,441          20,656

Minority Interests                                          3               -
                                                       --------         -------

                                                       19,444          20,656
                                                       --------         -------



CML Microsystems Plc

Preliminary Announcement for the Year ended 31st March 2003


Summary Group Cash Flow Statement
                                                      Unaudited       Audited
                                                           Year          Year
                                                            End           End
                                                      3/31/2003     3/31/2002
                                                          £'000         £'000

Net cash in flow from operating activities                   15         2,932
Returns on investments and servicing of finance             256           513
Taxation                                                    123          (863)
Capital expenditure and financial investment               (339)         (163)
Equity dividends paid                                    (1,535)       (1,534)
                                                         --------       -------
Net cash (out)/in flow before financing                  (1,480)          885

Financing                                                     4            12
                                                         --------       -------
(Decrease)/Increase in cash                              (1,476)          897
                                                         ========       =======

Funds at start of period                                 11,773        10,906

Translation difference                                     (698)          (30)

(Decrease)/Increase in cash                              (1,476)          897
                                                         --------       -------
Funds at close of period                                  9,599        11,773
                                                         ========       =======

Analysis of funds
Cash at Bank and in hand                                  1,344         2,566
Current asset investments                                 8,255         9,207
                                                         --------       -------
Total funds at close of period                            9,599        11,773
                                                         ========       =======



Notes

1.  The profit and loss account, balance sheet and cash flow statement are an
    abridged version of the Company's full accounts which have not yet been
    filed with the Registrar of Companies and which have not yet been reported
    on by the Company's auditors.

2.  A dividend of 10.5p per Ordinary Share (2002: 10.5p per Ordinary Share) is
    recommended in respect of the year ended 31st March 2003 and will be paid on
    1st August 2003 to shareholders on the register as at 4th July 2003.

3.  The calculation of earnings per share is based on the earnings attributable
    to ordinary shareholders divided by the weighted average number of shares in
    issue during the year.

    The calculation of diluted earnings per share is based on the basic earnings
    per share adjusted to allow for the issue of shares on the assumed
    conversion of all dilutive options.

4.  The same accounting policies have been used for the year ended 31st March
    2003 as for the year ended 31st March 2002 except that since the Group now
    has investment properties it has accounted for them in accordance with
    SSAP19.

5.  The preliminary announcement was approved by the Board of Directors on 9th
    June 2003.







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