RNS Number:1147M
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.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SSMFWUSDSELM