CML Microsystems increased sales by 6 per cent in the year to March, and the high level of operational gearing pushed operating profits up 20 per cent to £3.62m. Finance costs fell sharply as strong cash flow was used to reduce debt, while sales from the non-core property portfolio delivered £328,000 profit. Add in finance income, and pre-tax profits were up an impressive 70 per cent, which, given the modest rating, leaves the shares looking attractive.
Revenue growth was dominated by a 24 per cent rise in semiconductor sales, which customers use in their flash memory-based storage products. This is now the group's largest single market, accounting for 46 per cent of turnover. Further growth should come from new product releases, notably the group's first serial interface controller, where sales are expected to kick in during the second half of the year.
The wireless business, which accounts for 36 per cent of group revenue, was underpinned by the continuing shift from analogue to digital radio, although sales were down 12 per cent as a large one-off order placed in the previous year was not repeated.
Analysts at Cenkos are forecasting pre-tax profits of £4.6m for the current year and adjusted EPS of 22p.
| CML MICROSYSTEMS (CML) | ||||
|---|---|---|---|---|
| ORD PRICE: | 264p | MARKET VALUE: | £41.6m | |
| TOUCH: | 262-270p | 12-MONTH HIGH: | 303p | LOW: 185p |
| DIVIDEND YIELD: | 1.5% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 120p | NET CASH: | £5.2m | |
| Year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 17.1 | -1.73 | -4.10 | nil |
| 2009 | 16.1 | -2.09 | -14.3 | nil |
| 2010 | 18.0 | -0.39 | -0.20 | nil |
| 2011 | 22.1 | 2.32 | 17.9 | 3.50 |
| 2012 | 23.4 | 3.95 | 21.1 | 4.00 |
| % change | +6 | +70 | +18 | +14 |
Ex-div: 20 Jun Payment: 3 Aug | ||||
