CML Microsystems Plc
INTERIM RESULTS
CML Microsystems Plc ("CML"), which designs, manufactures and markets a broad range of semiconductor products, primarily for the global communication and data storage markets, announces Interim Results for the six months ended 30 September 2013.
Financial Highlights
· Record first half results
· Group revenues up 5% to £12.99m (2012: £12.39m)
· Gross profit up 7% to £9.21m (2012: £8.57m)
· Profit before tax up 29% to £3.21m (2012: £2.48m)
· Diluted EPS up 38% to 15.37p (2012: 11.13p)
· Net cash of £9.7m (2012: £6.5m)
Operational Highlights
· Storage revenues up c. 7% as customers transitioned to higher-performance flash memory controller products
· Wireless semiconductors revenues up c. 10% due to robust professional and commercial wireless communication markets
· Successful exit of Radio Data Technology (RDT) completed on schedule and at minimum cost leaving the Group as a pure-play fabless semiconductor business
· Continued adoption of industrial controllers with positive feedback from sampling customers
· Expansion of the RF product portfolio to drive growth in wireless markets
Chris Gurry, Managing Director of CML, said:
"The first half of the year has seen record half year results and reflects the Group's focus on delivering sustainable growth. Our key addressable markets of storage and wireless each exhibit compelling growth opportunities.
"Order book visibility continues to be relatively short term and raw material lead times can extend to 16 weeks in some instances. This could affect the timing of revenue recognition towards the end of what is a traditionally weaker second half period. That said, the Board's expectation remains for a full year of firm growth in profitability to 31 March 2014."
CML Microsystems Plc |
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Chris Gurry, Managing Director |
Tel: 01621 875 500 |
Nigel Clark, Financial Director |
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Cenkos Securities Plc |
Tel: 020 7397 8900 |
Jeremy Warner Allen (Sales) |
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Max Hartley (Corporate Finance) |
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SP Angel Corporate Finance LLP |
Tel: 020 3463 2260 |
Jeff Keating |
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Walbrook PR Ltd |
Tel: 020 7933 8780 or cml@walbrookpr.com |
Paul McManus |
Mob: 07980 541 893 |
Helen Cresswell |
Mob: 07841 917 679 |
I am pleased to report a further improvement in the Group's operating performance through the first six-month trading period to 30 September 2013. A steady increase in revenues, coupled with a diligent focus on product and operational cost management, has contributed to a 5% uplift in revenues and a 29% advance in profit before tax being recorded against the comparable period.
Unfortunately, the financial and operational progress achieved has been overshadowed in recent weeks following the death of two Board members.
Our founder and Non-Executive Chairman, George Gurry passed away on 5 October 2013. Although he had announced plans to vacate the Chairman's role by the end of this financial year, the Board was expecting to benefit from his wide ranging knowledge and experience for some time. An inspirational leader, he was highly regarded by those that knew him and the business legacy he leaves is evidence of both his success and the gratitude the Group owes to his vision and commitment for over 45 years.
Unexpectedly, George Bates, Non-Executive Director, passed away on 21 October 2013. George joined the Group in 1971 and over the following three and a half decades made an immeasurable contribution to the Group's engineering activities. In March 2006 he relinquished his executive engineering position but remained on the Board in a non-executive capacity. His considered and pragmatic approach will be sorely missed.
Over the coming months the Board will fully assess the situation and take appropriate action to ensure it has the right mix of skills and experience to continue executing on its sustainable growth strategy.
As reported at the time of the full-year results in June 2013, the Board took the decision to exit from the Group's loss-making equipment segment, Radio Data Technology Ltd (RDT), and completed the exit during the first half of the current financial year. Following the sale of certain IP and assets to third parties, RDT went into liquidation on 13 August 2013. As a consequence, the Group now has only one operating segment, semiconductors, and this statement and operational review refers to the results of the continuing operations. A note in the condensed consolidated income statement highlights the loss from discontinued operations and notes 1 and 4 of the condensed consolidated financial statements contain further detailed breakdowns.
Revenues from continuing operations increased year on year by almost 5% to £12.99m (2012: £12.39m) driven by progress in the Group's two key semiconductor market areas, storage and wireless.
Storage revenues advanced by close to 7% as a number of customers transitioned to higher-performance flash memory controller products. The Group also benefitted from the first full reporting period where its SATA interface controllers were in mass production.
Revenues from the sale of semiconductors into professional and commercial wireless applications improved by approximately 10%. The growth was driven by increased shipments of digital baseband products and high performance RF ICs.
Telecom revenues were down approximately 5% but remained broadly in line with expectations.
Geographically, the improvement in sales revenues was not attributable to any one single area, with increases posted in all three major regions; the Far East, the Americas and Europe.
Gross margins improved to 71% (2012: 69%) largely as a result of product mix, leading to a reported gross profit of £9.21m (2012: £8.57m), an increase of just over 7% year on year. Distribution and administration costs were fractionally lower at £6.16m (2012: £6.18m) driving a 28% improvement in operational profits (before other income, share-based payments and net finance effects) to £3.06m (2012: £2.39m).
Other operating income rose to £192k (2012: £124k) reflecting the increased occupancy of group owned non‑operational commercial properties.
There were no finance costs during the period and a small finance income was reported of £35k (2012: £5k).
Profit before tax increased by 29% to £3.21m (2012: £2.48m).
Once again the Group posted a pleasing performance in terms of cash generation, despite high levels of investment in new product development activities, the repayment of all bank loans and the payment of an £873k cash dividend (2012: £631k). At 30 September 2013, the Group had net cash reserves of £9.74m (2012: £6.51).
Diluted earnings per share increased by 38% to 15.37p (2012: 11.13p) and shareholders' equity rose to £22.94m (2012: £20.12m).
Performance through the first half year was in line with both management and market expectations for firm improvement. The exit from the equipment segment was completed on schedule and at minimum cost leaving the Group focused as a pure-play fabless semiconductor business.
Our key addressable markets of storage and wireless each exhibit compelling growth opportunities. Within storage we expect adoption of our industrial SATA controller to continue whilst the early feedback from sampling customers with our new industrial SD controller has been positive. For our target wireless markets, we expect the growth drivers to be digital radio technology along with opportunities for chip-set design wins within data centric applications. The expansion of the RF product portfolio is a key catalyst in this regard. In short, engineering development activities are being targeted to underpin the sustainable growth strategy that has been communicated in recent years.
Order book visibility continues to be relatively short term and raw material lead times can extend to 16 weeks in some instances. This could affect the timing of revenue recognition towards the end of what is a traditionally weaker second half period. That said, the Board's expectation remains for a full year of firm growth in profitability to 31 March 2014.
On behalf of the Board, I would like to express sincere thanks and appreciation to our employees for the commitment and loyalty they continue to demonstrate and, without whom, success would not be possible.
It remains for me to convey my appreciation to all Group stakeholders and friends who have offered their support in recent weeks following the loss of our founder. He set high standards for business acumen, ethics and achievement that are embedded across the Group and will remain a constant reference as we move forward.
Chairman and Chief Executive
19 November 2013
Condensed consolidated income statement
for the six months ended 30 September 2013
|
Unaudited |
Unaudited |
Audited |
|
6 months end |
6 months end |
Year end |
|
30/09/13 |
30/09/12 |
31/03/13 |
|
£'000 |
£'000 |
£'000 |
Continuing operations |
|
|
|
Revenue |
12,989 |
12,390 |
24,648 |
Cost of sales |
(3,777) |
(3,825) |
(7,313) |
Gross profit |
9,212 |
8,565 |
17,335 |
Distribution and administration costs |
(6,156) |
(6,180) |
(12,131) |
|
3,056 |
2,385 |
5,204 |
Other operating income |
192 |
124 |
297 |
Profit before share-based payments |
3,248 |
2,509 |
5,501 |
Share-based payments |
(69) |
(38) |
(102) |
Profit after share-based payments |
3,179 |
2,471 |
5,399 |
Finance costs |
- |
- |
- |
Finance income |
35 |
5 |
55 |
Profit before taxation |
3,214 |
2,476 |
5,454 |
Income tax expense |
(710) |
(638) |
(1,017) |
Profit after taxation from continuing operations |
2,504 |
1,838 |
4,437 |
Profit/(loss) from discontinued operations (see note 4) |
- |
(68) |
(383) |
Profit for period attributable to equity owners of |
2,504 |
1,770 |
4,054 |
Basic earnings per share |
|
|
|
From continuing operations |
15.73p |
11.63p |
28.01p |
From profit for the year |
15.73p |
11.20p |
25.59 |
From discontinued operations |
- |
(0.43p) |
(2.42p) |
Diluted earning per share |
|
|
|
From continuing operations |
15.37p |
11.56p |
27.56p |
From profit for the year |
15.37p |
11.13p |
25.18p |
From discontinued operations |
- |
(0.43p) |
(2.38p) |
|
Unaudited |
Unaudited |
Audited |
|
6 months end |
6 months end |
Year end |
|
30/09/13 |
30/09/12 |
31/03/13 |
|
£'000 |
£'000 |
£'000 |
Profit for the period |
2,504 |
1,770 |
4,054 |
Other comprehensive income: |
|
|
|
Foreign exchange differences |
(214) |
(65) |
180 |
Actuarial loss on retirement benefit obligations |
- |
- |
(1,768) |
Income tax on actuarial loss |
- |
- |
407 |
Other comprehensive income for the period net of tax |
(214) |
(65) |
(1,181) |
Total comprehensive income for the period net of tax attributable to equity owners of the business |
2,290 |
1,705 |
2,873 |
Condensed consolidated statement of financial position
as at 30 September 2013
|
Unaudited |
Unaudited |
Audited |
|
30/09/13 |
30/09/12 |
31/03/13 |
|
£'000 |
£'000 |
£'000 |
Assets |
|
|
|
Non-current assets |
|
|
|
Property, plant and equipment |
5,025 |
5,132 |
5,094 |
Investment properties |
3,450 |
3,450 |
3,450 |
Development costs |
5,611 |
4,372 |
4,674 |
Goodwill |
3,512 |
3,512 |
3,512 |
Deferred tax asset |
2,242 |
2,398 |
2,738 |
|
19,840 |
18,864 |
19,468 |
Current assets |
|
|
|
Inventories |
1,536 |
2,017 |
1,692 |
Trade receivables and prepayments |
4,187 |
2,693 |
2,522 |
Current tax assets |
- |
- |
139 |
Cash and cash equivalents |
9,737 |
7,864 |
9,323 |
|
15,460 |
12,574 |
13,676 |
Non-current assets classified as held for sale - properties |
103 |
103 |
110 |
Total assets |
35,403 |
31,541 |
33,254 |
Liabilities |
|
|
|
Current liabilities |
|
|
|
Bank loans and overdrafts |
- |
1,354 |
338 |
Trade and other payables |
3,863 |
3,604 |
3,308 |
Current tax liabilities |
422 |
255 |
57 |
|
4,285 |
5,213 |
3,703 |
Non-current liabilities |
|
|
|
Deferred tax liabilities |
2,058 |
1,671 |
2,064 |
Retirement benefit obligation |
6,122 |
4,542 |
6,122 |
|
8,180 |
6,213 |
8,186 |
Total liabilities |
12,465 |
11,426 |
11,889 |
Net assets |
22,938 |
20,115 |
21,365 |
Capital and reserves attributable to equity owners of |
|
|
|
Share capital |
798 |
793 |
794 |
Share premium |
5,060 |
4,959 |
4,977 |
Share-based payments reserve |
240 |
146 |
171 |
Foreign exchange reserve |
299 |
268 |
513 |
Accumulated profits |
16,541 |
13,949 |
14,910 |
Shareholders' equity |
22,938 |
20,115 |
21,365 |
Condensed consolidated cash flow statements
for the six months ended 30 September 2013
|
Unaudited |
Unaudited |
Audited |
|
6 months end |
6 months end |
Year end |
|
30/09/13 |
30/09/12 |
31/03/13 |
|
£'000 |
£'000 |
£'000 |
Operating activities |
|
|
|
Profit for the period before income taxes and discontinued activities |
3,217 |
2,408 |
5,071 |
Adjustments for: |
|
|
|
Depreciation |
124 |
109 |
242 |
Amortisation of development costs |
1,109 |
1,146 |
2,517 |
Movement in pensions deficit |
- |
- |
(188) |
Share-based payments |
69 |
38 |
102 |
Finance income |
(35) |
(5) |
(24) |
Increase in working capital |
(959) |
(362) |
(164) |
Cash flows from operating activities |
3,525 |
3,334 |
7,556 |
Income tax refunded/(paid) |
65 |
19 |
(71) |
Net cash flows from operating activities |
3,590 |
3,353 |
7,485 |
Investing activities |
|
|
|
Purchase of property, plant and equipment |
(58) |
(88) |
(179) |
Investment in development costs |
(2,067) |
(1,460) |
(3,048) |
Disposals of property, plant and equipment |
4 |
- |
- |
Finance income |
35 |
5 |
24 |
Net cash flows from investing activities |
(2,086) |
(1,543) |
(3,203) |
Financing activities |
|
|
|
Issue of ordinary shares |
87 |
92 |
111 |
Decrease in bank loans and short-term borrowings |
(338) |
(1,146) |
(2,163) |
Dividend paid to Group shareholders |
(873) |
(631) |
(631) |
Net cash flows from financing activities |
(1,124) |
(1,685) |
(2,683) |
Increase in cash and cash equivalents |
380 |
125 |
1,599 |
Movement in cash and cash equivalents: |
|
|
|
At start of period/year |
9,323 |
7,742 |
7,742 |
Increase in cash and cash equivalents |
380 |
125 |
1,599 |
Effects of exchange rate changes |
34 |
(3) |
(18) |
At end of period/year |
9,737 |
7,864 |
9,323 |
Condensed consolidated statement of changes in equity
for the six months ended 30 September 2013
|
|
|
|
Foreign |
|
|
|
Share |
Share |
Share-based |
exchange |
Accumulated |
|
|
capital |
premium |
payments |
reserve |
profits |
Total |
Unaudited |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
At 31 March 2012 |
788 |
4,872 |
108 |
333 |
12,809 |
18,910 |
Profit for period |
|
|
|
|
1,770 |
1,770 |
Other comprehensive income: |
|
|
|
|
|
|
Foreign exchange differences |
|
|
|
(65) |
|
(65) |
Total comprehensive income for the period |
- |
- |
- |
(65) |
1,770 |
1,705 |
Transactions with owners in their capacity as owners: |
|
|
|
|
|
|
Dividend paid |
|
|
|
|
(631) |
(631) |
Issue of ordinary shares |
5 |
87 |
|
|
|
92 |
Total of transactions with owners in their capacity as owners: |
5 |
87 |
- |
- |
(631) |
(539) |
Share-based payments |
|
|
38 |
|
|
38 |
At 30 September 2012 |
793 |
4,959 |
146 |
268 |
13,948 |
20,114 |
Profit for period |
|
|
|
|
2,284 |
2,284 |
Other comprehensive income: |
|
|
|
|
|
|
Foreign exchange differences |
|
|
|
245 |
|
245 |
Actuarial loss on retirement benefit obligation |
|
|
|
|
(1,768) |
(1,768) |
Deferred tax on actuarial losses |
|
|
|
|
407 |
407 |
Total comprehensive income for the period |
- |
- |
- |
245 |
923 |
1,168 |
Transactions with owners in their capacity as owners: |
|
|
|
|
|
|
Issue of ordinary shares |
1 |
18 |
|
|
|
19 |
Total of transactions with owners in their capacity as owners: |
1 |
18 |
- |
- |
- |
19 |
Share-based payments |
|
|
64 |
|
|
64 |
Cancelation/transfer of share-based payments |
|
|
(39) |
|
39 |
- |
At 31 March 2013 |
794 |
4,977 |
171 |
513 |
14,910 |
21,365 |
Profit for period |
|
|
|
|
2,504 |
2,504 |
Other comprehensive income: |
|
|
|
|
|
|
Foreign exchange differences |
|
|
|
(214) |
|
(214) |
Total comprehensive income for the period |
- |
- |
- |
(214) |
2,504 |
2,290 |
Transactions with owners in their capacity as owners: |
|
|
|
|
|
|
Dividend paid |
|
|
|
|
(873) |
(873) |
Issue of ordinary shares |
4 |
83 |
|
|
|
87 |
Total of transactions with owners in their capacity as owners: |
4 |
83 |
- |
- |
(873) |
(786) |
Share-based payments |
|
|
69 |
|
|
69 |
At 30 September 2013 |
798 |
5,060 |
240 |
299 |
16,541 |
22,938 |
Notes to the condensed consolidated financial statements
Business segments
|
|
Unaudited |
|
|
Unaudited |
|
|
Audited |
|
||
|
6 months end |
6 months end |
|
Year end |
|
||||||
|
|
30/09/13 |
|
|
30/09/12 |
|
|
31/03/13 |
|
||
|
|
Semi- |
|
|
Semi- |
|
|
Semi- |
|
||
|
Discontinued |
conductor |
|
Discontinued |
conductor |
|
Discontinued |
conductor |
|
||
|
Equipment |
components |
Group |
Equipment |
components |
Group |
Equipment |
components |
Group |
||
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
||
Revenue |
|
|
|
|
|
|
|
|
|
||
By origination |
282 |
21,497 |
21,779 |
308 |
20,824 |
21,132 |
590 |
40,494 |
41,084 |
||
Inter-segmental revenue |
- |
(8,508) |
(8,508) |
- |
(8,434) |
(8,434) |
- |
(15,846) |
(15,846) |
||
Segmental revenue |
282 |
12,989 |
13,271 |
308 |
12,390 |
12,698 |
590 |
24,648 |
25,238 |
||
Profit/(loss) |
|
|
|
|
|
|
|
|
|
||
Segmental result |
3 |
3,179 |
3,182 |
(68) |
2,471 |
2,403 |
(383) |
5,399 |
5,016 |
||
Net financial income |
|
|
35 |
|
|
5 |
|
|
55 |
||
Income tax |
|
|
(713) |
|
|
(638) |
|
|
(1,017) |
||
Profit after taxation |
|
|
2,504 |
|
|
1,770 |
|
|
4,054 |
||
Assets and liabilities |
|
|
|
|
|
|
|
|
|
||
Segmental assets |
- |
29,608 |
29,608 |
659 |
24,931 |
25,590 |
272 |
26,545 |
26,817 |
||
Unallocated corporate assets |
|
|
|
|
|
|
|
|
|
||
Investment property (including held for sale) |
|
|
3,553 |
|
|
3,553 |
|
|
3,560 |
||
Deferred taxation |
|
|
2,242 |
|
|
2,398 |
|
|
2,738 |
||
Current tax receivable |
|
|
- |
|
|
- |
|
|
139 |
||
Consolidated total assets |
|
|
35,403 |
|
|
31,541 |
|
|
33,254 |
||
Segmental liabilities |
- |
3,863 |
3,863 |
298 |
3,306 |
3,604 |
228 |
3,080 |
3,308 |
||
Unallocated corporate assets |
|
|
|
|
|
|
|
|
|
||
Deferred taxation |
|
|
2,058 |
|
|
1,671 |
|
|
2,063 |
||
Current tax liability |
|
|
422 |
|
|
255 |
|
|
57 |
||
Bank loans and overdrafts |
|
|
- |
|
|
1,354 |
|
|
338 |
||
Retirement benefit obligation |
|
|
6,122 |
|
|
4,542 |
|
|
6,122 |
||
Consolidated total liabilities |
|
|
12,465 |
|
|
11,426 |
|
|
11,888 |
||
Other segmental information |
|
|
|
|
|
|
|
|
|
||
Property, plant and equipment additions |
- |
58 |
58 |
- |
88 |
88 |
- |
179 |
179 |
||
Development cost additions |
- |
2,067 |
2,067 |
35 |
1,425 |
1,460 |
59 |
2,989 |
3,048 |
||
Depreciation |
- |
124 |
124 |
1 |
108 |
109 |
1 |
241 |
242 |
||
Amortisation |
- |
1,109 |
1,109 |
32 |
1,114 |
1,146 |
171 |
2,346 |
2,517 |
||
Other significant non-cash income |
- |
- |
- |
- |
- |
- |
- |
188 |
188 |
||
Geographical segments
|
UK |
Germany |
Americas |
Far East |
Total |
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
Unaudited |
|
|
|
|
|
Six months ended 30 September 2013 |
|
|
|
|
|
Revenue by origination |
6,610 |
6,956 |
2,981 |
5,232 |
21,779 |
Inter-segmental revenue |
(2,870) |
(5,638) |
- |
- |
(8,508) |
Revenue to third parties |
3,740 |
1,318 |
2,981 |
5,232 |
13,271 |
Property, plant and equipment |
4,826 |
70 |
123 |
6 |
5,025 |
Investment properties including held for sale |
3,450 |
- |
103 |
- |
3,553 |
Goodwill |
- |
3,512 |
- |
- |
3,512 |
Development cost |
2,148 |
3,463 |
- |
- |
5,611 |
Total assets |
23,918 |
7,134 |
1,930 |
2,421 |
35,403 |
Unaudited |
|
|
|
|
|
Six months ended 30 September 2012 |
|
|
|
|
|
Revenue by origination |
6,121 |
6,407 |
3,106 |
5,498 |
21,132 |
Inter-segmental revenue |
(3,134) |
(5,300) |
- |
- |
(8,434) |
Revenue to third parties |
2,987 |
1,107 |
3,106 |
5,498 |
12,698 |
Property, plant and equipment |
4,926 |
58 |
134 |
14 |
5,132 |
Investment properties including held for sale |
3,450 |
- |
103 |
- |
3,553 |
Goodwill |
- |
3,512 |
- |
- |
3,512 |
Development cost |
2,029 |
2,343 |
- |
- |
4,372 |
Total assets |
22,176 |
5,894 |
1,562 |
1,909 |
31,541 |
Audited |
|
|
|
|
|
Year ended 31 March 2013 |
|
|
|
|
|
Revenue by origination |
13,383 |
11,403 |
6,259 |
10,039 |
41,084 |
Inter-segmental revenue |
(6,245) |
(9,601) |
- |
- |
(15,846) |
Revenue to third parties |
7,138 |
1,802 |
6,259 |
10,039 |
25,238 |
Property, plant and equipment |
4,888 |
60 |
136 |
10 |
5,094 |
Investment properties including held for sale |
3,450 |
- |
110 |
- |
3,560 |
Goodwill |
- |
3,512 |
- |
- |
3,512 |
Development cost |
1,960 |
2,714 |
- |
- |
4,674 |
Total assets |
25,088 |
5,135 |
1,404 |
1,627 |
33,254 |
On 13 August 2013 Radio Data Technology Ltd which represents 100% of the equipment segment went into liquidation and consequently after that date the Group only has one segment.
Reported segments and their results in accordance with IFRS 8, is based on internal management reporting information that is regularly reviewed by the chief operating decision maker. The measurement policies the Group uses for segmental reporting under IFRS 8 are the same as those used in its financial statements.
2 Dividend paid and proposed
A dividend of 5.5p per 5p ordinary share in respect of the year ended 31 March 2013 was paid on 2 August 2013 (2012: 4.0p per ordinary share of 5p in respect of the year ended 31 March 2012). No dividend is proposed in respect of the six months period ended 30 September 2013 (2012: £Nil per ordinary share of 5p in respect of the period ended 30 September 2012).
The Directors consider that tax will be payable at varying rates according to the country of incorporation of its subsidiary undertakings and have provided on that basis.
|
Unaudited |
Unaudited |
Audited |
|
6 months end |
6 months end |
Year end |
|
30/09/13 |
30/09/12 |
31/03/13 |
|
£'000 |
£'000 |
£'000 |
UK income tax charge/(credit) |
- |
- |
(142) |
Overseas income tax charge |
174 |
326 |
382 |
Total current tax charge |
174 |
326 |
240 |
Deferred tax charge |
536 |
312 |
777 |
Reported income tax charge |
710 |
638 |
1,017 |
On 13 August 2013 Radio Data Technology Ltd went into liquidation and consequently qualifies as a discontinued operation. The results of the discontinued operation which have been included in the consolidated income statement are presented below:
|
6 months end |
6 months end |
Year end |
|
30/09/13 |
30/09/12 |
31/03/13 |
|
£'000 |
£'000 |
£'000 |
Revenue |
282 |
308 |
590 |
Cost of sales |
(171) |
(140) |
(361) |
Gross profit |
111 |
168 |
229 |
Distribution and administration costs |
(108) |
(236) |
(612) |
Profit/(loss) before taxation |
3 |
(68) |
- |
Taxation |
(3) |
- |
- |
Profit/(loss) from discontinued operations |
- |
(68) |
(383) |
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.
|
Ordinary 5p shares |
|
|
Weighted |
|
|
average |
Diluted |
|
number |
number |
Six months ended 30 September 2013 |
15,915,946 |
16,296,334 |
Six months ended 30 September 2012 |
15,809,707 |
15,903,421 |
Year end 31 March 2013 |
15,841,435 |
16,098,376 |
Investment properties are revalued at each discrete period end by the Directors and every third year by independent Chartered Surveyors on an open market basis. No depreciation is provided on freehold investment properties or on leasehold investment properties. In accordance with IAS 40, gains and losses arising on revaluation of investment properties are shown in the income statement. At 31 March 2012 the investment properties were professionally valued by Everett Newlyn, Chartered Surveyors and Commercial Property Consultants on an open market basis.
|
Net cash at |
6 months end |
Net cash at |
6 months end |
Net cash at |
6 months end |
Net cash at |
|
01/04/12 |
30/09/12 |
30/09/12 |
31/03/2013 |
31/03/13 |
30/09/13 |
30/09/13 |
|
|
Cash flow |
|
Cash flow |
|
Cash flow |
|
|
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
£'000 |
Cash and cash equivalents |
7,742 |
122 |
7,864 |
1,459 |
9,323 |
414 |
9,737 |
Bank loans and overdrafts |
(2,501) |
1,147 |
(1,354) |
1,016 |
(338) |
338 |
- |
|
5,241 |
1,269 |
6,510 |
2,475 |
8,985 |
752 |
9,737 |
The cash flow above is a combination of the actual cash flow and the exchange movement.
The Directors have not obtained an actuarial report in respect of the defined benefit pension scheme for the purpose of this Half Yearly Report.
Key risks of a financial nature
The principal risks and uncertainties facing the Group are with foreign currencies and customer dependency. With the majority of the Group's earnings being linked to the US Dollar, a decline in this currency would have a direct effect on revenue, although since the majority of the cost of sales are also linked to the US Dollar, this risk is reduced at the gross profit line. Additionally, though the Group has a very diverse customer base in certain market segments, key customers can represent a significant amount of revenue. Key customer relationships are closely monitored; however changes in buying patterns of a key customer could have an adverse effect on the Group's performance.
Key risks of a non-financial nature
The Group is a small player operating in a highly-competitive global market, which is undergoing continual geographical change. The Group's ability to respond to many competitive factors including, but not limited to pricing, technological innovations, product quality, customer service, manufacturing capabilities and employment of qualified personnel will be key in the achievement of its objectives, but its ultimate success will depend on the demand for its customers' products since the Group is a component supplier.
A substantial proportion of the Group's revenue and earnings are derived from outside the UK and so the Group's ability to achieve its financial objectives could be impacted by risks and uncertainties associated with local legal requirements, the enforceability of laws and contracts, changes in the tax laws, terrorist activities, natural disasters or health epidemics.
The Directors confirm that, to the best of their knowledge:
a) the condensed financial statements, prepared in accordance with IFRS as adopted by the EU give a true and fair view of the assets, liabilities, financial position and profit of the Group and the undertakings included in the consolidation taken as a whole; and
b) the condensed set of financial statements have been prepared in accordance with IAS 34 "Interim Financial Reporting"; and
c) the Chairman and Chief Executive's statement and operational and financial review include a fair review of the development and performance of the business and the position of the Company and the undertakings included in the consolidation taken as a whole together with a description of the principal risks and uncertainties that they face.
The Directors are also responsible for the maintenance and integrity of the CML Microsystems Plc website. Legislation in the UK governing the preparation and dissemination of the financial statements may differ from legislation in other jurisdictions.
The basis of preparation and accounting policies used in preparation of the Half Yearly Financial Report are the same accounting policies set out in the year ended 31 March 2013 financial statements.
Other than already stated within the Chairman and Chief Executive's statement and operational and financial review there have been no important events during the first six months of the financial year that have impacted this Half Yearly Financial Report.
There have been no related party transactions or changes in related party transactions described in the latest Annual Report that could have a material effect on the financial position or performance of the Group in the first six months of the financial year.
The principal risks and uncertainties within the business are contained within this report in note 9 above.
In the segmental analysis (note 1) inter-segmental transfers or transactions are entered into under commercial terms and conditions appropriate to the location of the entity whilst considering that the parties are related.
This Half Yearly Financial Report includes a fair review of the information required by DTR 4.2.7/8 (indication of important events and their impact, and description of principal risks and uncertainties for the remaining six months of the financial year).
This Half Yearly Financial Report does not include all the information and disclosures required in the Annual Report, and should be read in conjunction with the consolidated Annual Report for the year ended 31 March 2013.
The financial information contained in this Half Yearly Financial Report has been prepared using International Financial Reporting Standards as adopted by the European Union. This Half Yearly Financial Report does not constitute statutory accounts as defined by Section 434 of the Companies Act 2006. The financial information for the year ended 31 March 2013 is based on the statutory accounts for the financial year ended 31 March 2013 that have been filed with the Registrar of Companies and on which the Auditor gave an unqualified audit opinion.
The Auditor's report on those accounts did not contain a statement under Section 498(2) or (3) of the Companies Act 2006. This Half Yearly Financial Report has not been audited or reviewed by the Group Auditor.
A copy of this Half Yearly Financial Report can be viewed on the Company website www.cmlmicroplc.com.
The Directors approved this Half Yearly Report on 19 November 2013.
Glossary
fabless a company that designs the semiconductor but subcontracts the wafer fabrication process
IC integrated circuit
IP intellectual property
RDT Radio Data Technology Ltd
RF radio frequency
SATA serial ATA interface
SD secure digital