Final Results

CML Microsystems PLC
08 June 2004



                              CML MICROSYSTEMS PLC
                   YEAR END MARCH 2004 PRELIMINARY RESULTS

Return to Profitability; Results in-line with market expectations; Confident
Outlook

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 ending 31 March 2004.

CML's semiconductor solutions serve customers in the wire-line telecom, wireless
data, two-way radio and most recently the memory card controller and
programmable platform 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, Germany, USA and Singapore, with branches in China and Taiwan.

Commenting on the results, George Gurry, Chairman said:

'The results for the latest full year show that the improved trading performance
indicated by the group figures at the half-year was maintained through the
second half.' Most of the improvement in sales was attributable to the
contribution from Hyperstone, acquired July 2003, for €7.5m (£5.25m).

Financial Highlights
•         Turnover of £16.322m (2003: £12.387m), up 32%
•         Hyperstone acquisition contributed £3.768m, other showed marginal
          improvements.
•         Operating profit for continuing businesses of £79k (2003: Loss £578k)
•         Hyperstone operating profit (pre-goodwill write off) of £108k.
•         Pre-tax profit (before goodwill write off) of £192k (2003: Loss £322k)
•         Dividend maintained at 10.5p per share (2003:10.5p)
•         R&D expenditure up 23% to £2.8m (2003 £2.3m)
•         Net interest earnings fell to £4,481 (2003: £256,035)
•         Net cash fell to £3.867m (2003: £9.599m); Group cash flow neutral

Business Review
•         Healthy sales into Far East markets during the year.
•         Good penetration into domestic telecoms applications in China through
          the group's telecoms products.
•         Reverse of downward two year sales trend in most other markets.
•         New products targeted at medium to high tier radio markets well
          received.
•         Entry into new markets via Hyperstone through range of standard
          semiconductor products complying with memory card formats, including 
          MultiMedia (MMC) and Secure Digital (SD).
•         Far East sales, Europe and US opportunities, expected to add
          meaningful revenues during current year.
•         Programmable Platform devices from Hyperstone open up a range of
          market areas.

Regarding prospects, George Gurry, Chairman said:

'The integration of the Hyperstone operation is proceeding according to plan.
Exploitation of Hyperstone's core technology along with existing analogue
semiconductor design skills will enable the development of products with higher
levels of performance and integration for new market areas.

The last two years have presented difficult trading conditions in key market
areas but it does appear that, subject to unforeseen circumstances, we are
turning the corner. During these difficult times, the Board's commitment to the
execution of an agreed strategy and the opportunities that this presents leads
me to feel confident in your Company's materially stronger future performance.'

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                                                   020 7786 9600
Peter Binns                                                     07768 392 582
Paul McManus                                                    07980 541 893



PRELIMINARY RESULTS

I am pleased to report on the results for the latest full year ending 31 March
2004, which show that the improved trading performance indicated by the group
figures at the half-year was maintained through the second half.

As the results show, the total year on year group turnover rose by 31% to
£16.322m with most of this improvement attributable to the sales contribution of
Hyperstone. Sales for the other group operations were £12.554m, which showed
marginal improvements on the prior year (2003: £12.387m).

Healthy gains were recorded for sales into Far East markets during the year,
with good penetration into domestic telecommunication applications in China
achieved through the group's telecom products.

A similar improvement was posted for sales into the US market place, in this
case led entirely by sales of Hyperstone programmable platform devices, but it
should be noted that approximately one half of this posted gain resulted from a
non-recurring adjustment to a customer contract.

Although sales into the other group market territories did not move ahead as
firmly, improvements were achieved in a number of cases, signalling a welcome
halt to the downward trend in sales that has characterised most territories
during the two preceding years.

Excluding exceptional goodwill written off, the group can report a modestly
profitable outcome to the year just ended, and it can be seen that underlying
operating results were positive in the case of both the continuing group
operations and for the acquired Hyperstone business. Operating profit for the
continuing businesses was £79,093 against an operating loss in 2003 of £578,496.
Hyperstone AG made an operating profit (pre the write off of goodwill) of
£107,928. Other operating income is solely rental of properties that are
included in investment properties within the balance sheet.

With the declining rates of interest being achieved and the reduction in cash
reserves coupled with the borrowings for the acquisition of Hyperstone, net
interest earnings fell to £4,481 (2003: £256,035).

I am pleased that prior to the exceptional goodwill written off a profit before
taxation of £191,502 was achieved against the loss of £322,461 in 2003. The
Group has again also benefited from the R&D Tax Credit legislation giving a
positive tax charge and reducing the overall loss for the year.

Net cash fell to £3.867m (2003: £9.599m) due to the acquisition of Hyperstone,
payment of the dividend and movement in the US Dollar. Aside from these issues,
Group cash flow was neutral.

In recommending an unchanged dividend of 10.5p your Directors are reflecting
their confidence in your Company's future. Subject to shareholder approval, this
dividend will be paid on 30th July 2004 to shareholders registered on 2nd July
2004.

R&D expenditure during the year of £2.8m (2003: £2.3m) amounted to an increase
of 23% and reflects a commitment to developing core silicon platforms and
strategic building blocks that will enable the Group to respond to market
opportunities more rapidly and efficiently.

Progress within the Group's historic market sectors was mixed during the year.
The sale of products into the Wireline Telecommunication sector increased
year-on-year, largely as a result of new customer penetration for Payphone and
Wireless Local Loop applications in the Far East.

Sales into Two Way Radio applications reduced as a result of the Group's prior
decision to stop actively pursuing the low-margin, low feature-set Family Radio
markets and shift the emphasis towards new products targeted at the medium to
high tier radio markets. These products have received a favourable introduction
to the market and sales are expected to increase during the current financial
year. The level of sales for products into Wireless Data applications was flat
during the year.

The acquisition of Hyperstone AG in July last year was in keeping with the
Group's strategy to expand the number of addressable markets beyond historic
levels. As a result, the Group has entered the Memory Card Controller market by
offering a range of standard semiconductor products that comply with worldwide
memory card formats including MultiMedia (MMC) and Secure Digital (SD). Sales
into these applications during the year came mainly from the Far East but
opportunities uncovered in Europe and the USA are expected to add meaningful
revenues during the coming year.

Programmable Platform devices from Hyperstone open up a range of market areas to
the Group but during the year most revenues in this category came from Digital
Still Camera and Digital Video Recorder applications.

The integration of the Hyperstone operation is proceeding according to plan and
leveraging the Group's historic routes to market is a key factor in the rapid
penetration of new territories. Exploitation of Hyperstone's core technology
along with existing analogue semiconductor design skills will enable the
development of products with higher levels of performance and integration for
market areas beyond those already mentioned.

The last two years have presented difficult trading conditions in key market
areas but it does appear that, subject to unforeseen circumstances, we are
turning the corner. During these difficult times, the Board's commitment to the
execution of an agreed strategy and the opportunities that this presents leads
me to feel confident in your Company's materially stronger future performance.

In closing, I would like to recognise the efforts of the employees who continue
to contribute vitally to the success of the Company. On behalf of your
Directors, I would like to extend sincere thanks to each and every one of them
for their loyal support and dedication throughout the year.

G W Gurry

Chairman
8th June 2004


PRELIMINARY RESULTS

GROUP PROFIT AND LOSS ACCOUNT
for the year ended 31st March 2004

                                                   Notes             From           From   Unaudited      Audited
                                                               Operations   Acquisitions        2004         2003
                                                                Excluding
                                                             Acquisitions
                                                                    £'000          £'000       £'000        £'000

Turnover                                                           12,554          3,768      16,322       12,387
Cost of sales                                                     (4,198)        (1,801)     (5,999)      (4,064)

Gross Profit                                                        8,356          1,967      10,323        8,323

Distribution costs and administration expenses                    (8,530)        (1,859)    (10,389)      (9,634)
Exceptional goodwill written off                     3                  -        (1,171)     (1,171)            -

                                                                    (174)        (1,063)     (1,237)      (1,311)

Other operating income                                                253              -         253          733

Operating Profit/(Loss)                                                79        (1,063)       (984)        (578)

Interest receivable                                                                              126          256
Interest payable                                                                               (121)            -

Loss on Ordinary Activities before Taxation                                                    (979)        (322)

Tax on loss on ordinary activities                                                               208          402

Profit/(Loss) on Ordinary Activities after
Taxation
Parent company                                                                                   144          942
Subsidiary undertakings                                                                        (915)        (862)


                                                                                               (771)           80
Minority Interests                                                                               (4)          (3)

                                                                                               (775)           77
Proposed dividend                                    2                                       (1,554)      (1,535)

Retained Loss for Year                                                                       (2,329)      (1,458)

Earnings per Share

Basic (loss)/earnings per share                      4                                       (5.28)p        0.53p

Diluted (loss)/earnings per share                    4                                       (5.28)p        0.53p

Statement of Total Recognised Gains and Losses
(Loss)/profit for the financial period                                                         (775)           77

Unrealised surplus on revaluation of properties                                                    -          986
Currency translation differences on foreign
currency
  net investments                                                                            (1,017)        (747)
Total gains and losses recognised since last

  Report and Accounts                                                                        (1,792)          316



PRELIMINARY RESULTS

GROUP BALANCE SHEET
at 31st March 2004


                                                        Unaudited                    Audited
                                                           2004                        2003

                                                        £'000         £'000         £'000         £'000
Fixed Assets
Tangible Assets                                                       9,672                       9,937
Intangible Assets                                                     3,512                           -

                                                                     13,184                       9,937

Current Assets
Stocks                                                  1,784                       1,326
Debtors                                                 3,387                       2,479
Investments                                             6,934                       8,255
Cash at Bank and in Hand                                1,480                       1,344

                                                       13,585                      13,404
Creditors: Amounts falling due within
  one year                                            (9,485)                     (3,325)

Net Current Assets                                                    4,100                      10,079

                                                                     17,284                      20,016

Provision for liabilities and charges                                 (585)                       (573)

Net Assets                                                           16,699                      19,443

Capital and Reserves
Called up Share Capital                                                 740                         731
Convertible Warrants                                                    240                           -
Share Premium Account                                                 3,590                       3,241
Capital Redemption Reserve                                              255                         255
Revaluation Reserve                                                     985                         985
Profit and Loss Account                                              10,882                      14,228

Shareholders' Funds                                                  16,692                      19,440

Minority Interests                                                        7                           3

                                                                     16,699                      19,443



PRELIMINARY RESULTS

GROUP CASH FLOW STATEMENT
for the year ended 31st March 2004

                                                                             Unaudited          Audited
                                                                                  2004             2003
                                                                                 £'000            £'000

Net cash (outflow)/inflow from operating activities                              (596)               15
Returns on investments and servicing of finance                                      4              256
Taxation                                                                           329              123
Capital expenditure and financial investment                                     (166)            (339)
Acquisition of Hyperstone AG                                                   (3,228)                -
Equity dividends paid                                                          (1,535)          (1,535)

Net cash outflow before financing                                              (5,192)          (1,480)
Financing                                                                        4,735                4

Decrease in cash                                                                 (457)          (1,476)


Reconciliation of Operating Profit to Net Cash (Outflow)/Inflow from Operating 
Activities

Operating loss                                                                   (984)            (578)
Depreciation                                                                       575              625
Amortisation of goodwill                                                         1,171                -
Loss/(profit) on sale of fixed assets                                                4              (6)
(Increase)/decrease in stocks                                                    (138)              307
Decrease/(increase) in debtors                                                   1,266            (126)
Decrease in creditors                                                          (2,490)            (207)

                                                                                 (596)               15

Reconciliation of Movement of Funds

Funds at start of period                                                         9,599           11,773
Translation difference                                                           (896)            (698)
Decrease in cash                                                                 (457)          (1,476)
Cash inflow from increase in loans                                             (4,378)                -

Funds at close of period                                                         3,868            9,599


Analysis of Funds

Cash at Bank and in Hand                                                         1,480            1,344
Current asset investments                                                        6,934            8,255
Bank overdrafts                                                                  (168)                -

                                                                                 8,246            9,599
Bank loans due within one year                                                 (4,378)                -

Funds at close of period                                                         3,868            9,599


Notes

1. Presentation of results

This Preliminary Statement was approved by the directors on 7th June 2004.

The results have been prepared using accounting policies and practices
consistent with those adopted in the 2003 Report and Accounts but have not been
audited.

The audited results for the year ended 31st March 2003 are an abridged version
of the company's Report and Accounts which have been filed with the Registrar of
the Companies and on which the auditors gave an unqualified audit opinion.

The financial information contained in this Preliminary Statement does not
constitute statutory accounts as defined by Section 240 of the Companies Act
1985.

2. Dividends

A dividend of 10.5p per Ordinary Share (2003:10.5p per Ordinary Share) is
recommended in respect of the year ended 31st March 2004 and will be paid on
30th July 2004 to shareholders on the register as at 2nd July 2004.

3. Exceptional goodwill written off

Goodwill arising on the acquisition of Hyperstone AG is being amortised over a
period of 36 months from 2nd July 2003.

4. Basic and diluted (loss)/earnings per share

The calculation of the basic and diluted (loss)/earnings per share is based on
the (loss)/earnings attributable to ordinary shareholders, divided by the
weighted average number of shares in issue during the year.






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