CML Microcircuits Regulatory News (CML)

22 Nov 2005 07:00

CML Microsystems PLC22 November 2005 22 November 2005 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 six months ending 30 September 2005. 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:"It is pleasing to report that your company has continued to achieve the firmprogress in product sales that I had expected as the opening period began, ledstrongly by the healthy growth maintained in sales for memory card controllers." Financial Highlights • Turnover up 24.5% to £14.240m (H1 '04: £11.440m) • Pre-tax profit up 4.7% to £1.416m (H1 '04: £1.352m) • Earnings per share up 17.6% to 7.83p (H1 '04: 6.66p) • Cash reserves remain at a satisfactory level • Introduction of IFRS Business Review • Good gains in sales of Memory Controller products • Increased product development expenditure to increase range and scope of new products for Hyperstone • Sales of Radio and Wireless Data applications ahead over comparative period • Sales of Wireline Telecom products into China remains weak • Products to market for marine communications and multi-standards land mobile voice and data markets • R&D expenditure to rise in H2 - strong new product portfolio underpins growth strategy Regarding prospects, George Gurry, Chairman said:"Although I expect the weaknesses that have persisted in some historic marketareas will continue to present difficulties through the months ahead, I feelquite sure that your company will continue to achieve its growth objectives."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 020 7153 1485Paul McManus 07980 541 893 Chairman's Statement It is pleasing to report that your company has continued to achieve the firmprogress in product sales that I had expected as the opening period began, ledstrongly by the healthy growth maintained in sales for memory card controllers. Collectively, turnover from products for other semiconductor market areas servedby the group were ahead of the figures for the immediately preceding six months,but were lower than those recorded for the comparable half. Although the overall operating results for the opening period to 30 September2005 are also viewed as a satisfactory outcome by your board, it is difficult tomake direct comparisons with the results reported for earlier years due to theintroduction of the mandatory new IFRS reporting standards. The IFRS reporting standards do not materially impact on figures for turnover inthese results, for example, but they do introduce new rules for the treatment ofR&D expenditure, amortisation, depreciation and other accounting issues, whichcan significantly alter the presentation of results compared with traditional UKGAAP reporting standards. As required from all companies with a full listing on the London Stock Exchange,a full description of the transition to International Financial ReportingStandards has been lodged with the LSE, and a copy can be viewed and downloadedfrom the group's website at www.cmlmicroplc.com Good gains were posted in sales of memory card controllers into the Far East, USand European territories, with Germany forming a notable component in theEuropean figures. Steps taken to increase the range and scope of Hyperstone'snew products portfolio are an ongoing feature of its operations, and productdevelopment expenditure is again expected to reach increased levels in thissecond half. Additional engineering staff are among the measures being taken. Sales for the group's radio communications and Wireless Data products werecomfortably ahead over the comparative period, but the gains in sales of two wayradio products in the Far East were more than offset by the weakened sales ofWireline Telecom products into China. The problems in this market area becameevident during the second half of last year and have continued since. It is notlikely that a material improvement in the situation will be seen before theyear-end. New products introduced to market this year have included high performancedevices aimed towards rapidly growing areas of the marine communications marketand multi-standards land mobile voice and data applications. Expenditure onproduct design and development is again set to rise through the second half,reflecting the strong new products portfolio that underpins the group's growthstrategies. Additionally, the group increased senior level resources in salesand marketing positions in Europe and the Far East. Although I expect the weaknesses that have persisted in some historic marketareas will continue to present difficulties through the months ahead, I feelquite sure that your company will continue to achieve its growth objectives. G. W. GurryChairman Consolidated Income Statement 6 Months End 6 months End 12 Months End 30/09/05 30/09/04 31/03/05 Restated Restated £'000 £'000 £'000 Revenue 14,240 11,440 23,457Cost of sales (6,292) (4,435) (8,597) ----------- ---------- -----------Gross Profit 7,948 7,005 14,860 Distributionandadministrationcosts (6,632) (5,819) (12,507) ----------- ---------- ----------- 1,316 1,186 2,353 Otheroperatingincome 156 276 581 ----------- ---------- -----------Operatingprofit beforeadjustments 1,472 1,462 2,934 Restructuringcosts - - (420)Share basedpayment (40) (39) (79) ----------- ---------- -----------Operatingprofit afteradjustments 1,432 1,423 2,435 Finance cost (112) (118) (249)Finance income 96 47 119 ----------- ---------- -----------Profit beforetax 1,416 1,352 2,305 Taxation (250) (381) 181 ----------- ---------- -----------Profit for theperiodattributableto equityshareholders 1,166 971 2,486 ----------- ---------- ----------- Earnings per shareBasic 7.83p 6.66p 16.77p ----------- ---------- -----------Diluted 7.77p 6.56p 16.64p ----------- ---------- ----------- Statement of Recognised Income and Expenditure 6 Months End 6 months End 12 Months End 30/09/05 30/09/04 31/03/05 Restated Restated £'000 £'000 £'000 Profit for theperiodattributableto equityshareholders 1,166 971 2,486 Foreignexchangedifferences 187 77 (40)Actuariallosses - - (493)Deferred tax - - 148 ----------- ---------- -----------Recognisedgains andlossesrelating tothe period 1,353 1,048 2,101 ----------- ---------- ----------- CML Microsystems Plc Consolidated Balance Sheet 30/09/05 30/09/04 31/03/05 Restated Restated £'000 £'000 £'000AssetsNon current assetsProperty, plant and equipment 7,205 6,828 7,193Investment properties 3,150 3,150 3,150Intangible assets - Research & development 5,396 4,629 5,089Intangible assets - Goodwill on consolidation 3,512 3,512 3,512Deferred tax asset 1,583 1,066 1,573 ----------- ----------- --------- 20,846 19,185 20,517 ----------- ----------- ---------Current assetsInventories 1,944 1,991 1,723Trade receivables and prepayments 5,310 3,837 4,093Cash and cash equivalents 7,413 8,471 8,449 ----------- ----------- --------- 14,667 14,299 14,265 ----------- ----------- --------- Total assets 35,513 33,484 34,782 ----------- ----------- --------- LiabilitiesCurrent liabilitiesBank loans and overdrafts 4,000 4,378 4,378Trade and other liabilities 5,293 4,788 4,086Current tax liabilities 413 418 272 ----------- ----------- --------- 9,706 9,584 8,736 ----------- ----------- --------- Non current liabilitiesDeferred tax liabilities 2,624 2,408 2,624Provisions 319 - 420Long term liabilities 3,504 3,093 3,504 ----------- ----------- --------- 6,447 5,501 6,548 ----------- ----------- --------- Total liabilities 16,153 15,085 15,284 ----------- ----------- --------- Net Assets 19,360 18,399 19,498 ----------- ----------- --------- EquityShare capital 745 741 744Convertible warrants 120 240 120Share premium 3,784 3,630 3,753Share based payments 122 42 82Capital Redemption Reserve 255 255 255Foreign exchange differences 147 77 (40)Retained earnings 14,187 13,414 14,584 ----------- ----------- ---------Shareholders' equity 19,360 18,399 19,498 ----------- ----------- --------- CML Microsystems Plc Consolidated Cash Flow Statement 6 Months End 6 Months End 12 Months End 30/09/05 30/09/04 31/03/05 Restated Restated £'000 £'000 £'000Operating activitiesNet profit for the period beforeincome taxes 1,416 1,352 2,305Adjustments for:Depreciation 295 289 663Movement in pension deficit - - (82)Amortisation of research anddevelopment 1,730 1,301 3,354Share based payments 40 39 79Exceptional restructuring costs - - 420Interest expense 112 118 235Interest income (96) (47) (119)(Decrease)/Increase in workingcapital (537) 385 243 ---------- --------- ---------Cash flows from operatingactivities 2,960 3,437 7,098Income tax refunded 99 284 142 ---------- --------- ---------Net cash flows from operatingactivities 3,059 3,721 7,240 ---------- --------- --------- Investing activitiesPurchase tangible fixed assets (305) (593) (1,351)Investment in intangible assets (2,049) (1,579) (4,093)Disposals of tangible fixedassets 4 53 99Interest income 96 47 119 ---------- --------- ---------Net cash flows from investingactivities (2,254) (2,072) (5,226) ---------- --------- --------- Financing activitiesIssue of ordinary shares 32 41 47Repayment of bank loan (378) - -Dividends paid to groupshareholders (1,563) (1,556) (1,556)Interest expense (112) (118) (235) ---------- --------- ---------Net cash flows from financingactivities (2,021) (1,633) (1,744) ---------- --------- --------- (Decrease)/Increase in cash andcash equivalents (1,216) 16 270 ---------- --------- --------- Movement in cash and cashequivalents:At start of period 8,449 8,245 8,245(Decrease)/Increase (1,216) 16 270Effects of exchange rate changes 180 210 (66) ---------- --------- ---------At end of period 7,413 8,471 8,449 ---------- --------- --------- CML Microsystems Plc Consolidated Statement of Changes in Equity Share Capital Convertible Share Premium Share based Capital Foreign Retained Total Warrants payments redemption Exchange earnings reserve differences £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 At 1stApril 740 240 3,590 3 255 - 13,999 18,8272004 Shares 1 40 41issuedForeignExchangedifferences 77 77Dividends (1,556) (1,556)paidProfit forperiod 971 971Share basedpayments 39 39 ------ -------- ------- ------- -------- -------- ------- ------At 30thSeptember 741 240 3,630 42 255 77 13,414 18,3992004 Shares 3 123 126issuedWarrantsconverted (120) (120)ForeignExchangedifferences (117) (117)Netactuariallossesrecogniseddirectly to (493) (493)equityProfit forperiod 1,515 1,515Share basedpayments 40 40Deferred 148 148tax ------ -------- ------- ------- -------- -------- ------- ------At 31stMarch 744 120 3,753 82 255 (40) 14,584 19,4982005 Shares 1 31 32issuedForeignExchangedifferences 187 187Dividends (1,563) (1,563)paidProfit forperiod 1,166 1,166Share basedpayments 40 40 ------ -------- ------- ------- -------- -------- ------- ------At 30thSeptember 745 120 3,784 122 255 147 14,187 19,3602005 ------ -------- ------- ------- -------- -------- ------- ------ CML Microsystems Plc Notes 1. Presentation of resultsThe directors approved this Interim Statement on 21st November 2005. The results for the current period have been prepared using InternationalFinancial Reporting Standards. Comparative information previously publishedunder UK Generally Accepted Accounting Practice has been restated underInternational Financial Reporting Standards. Reconciliation's of thisrestatement may be found in the announcement dated 15th November 2005. The financial information contained in this Interim Statement does notconstitute statutory accounts as defined by Section 240 of the Companies Act1985. The financial information for the year ended 31st March 2005 is based onthe statutory accounts for the financial year ended 31st March 2005 that havebeen filed with the Registrar of Companies and on which the auditors gave anunqualified audit opinion. 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. DividendThe directors do not recommend the payment of an interim dividend. 3. Income taxThe directors consider that tax will be payable at varying rates according tothe country of incorporation of a subsidiary and have provided on that basis. 4. Earnings per shareThe 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: No of Ordinary 5p shares6 months ended 30th September 2005 14,891,2126 months ended 30th September 2004 14,810,37812 months ended 31st March 2005 14,829,848 The calculation for diluted earnings per share takes into consideration 778,855of shares under option at 30th September 2005. 5. Employee benefitsThe 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 Exchange