The impressive half-year pre-tax profit boost reported by CML Microsystems (CML) would have been greater still if a delivery of wireless semi-conductor products hadn't slipped into October. "All that revenue will be booked in the second half and we have every confidence of meeting full-year analyst forecasts," says financial director Nigel Clark.
Even so, CML - which designs semiconductor chips for wireless and solid state storage sectors - still kept its gross margin stable at 69 per cent. Group costs fell 1.5 per cent to £6.42m, too, and margin uplift in the second half could be on the cards. Indeed, CML is now shipping its new SATA interface chip for more complex controllers in the solid state storage market. These, say Mr Clark, carry an average selling price of $4 (£2.50) compared with the $2 price tag on the existing PATA-based controllers. Moreover, the addressable market for SATA-based products is at least four times larger than the PATA market. Storage-related revenue generates 48 per cent of group revenue. Although the wireless division - which generates 35 per cent of revenue and provides chips for rugged walkie-talkie type devices - saw sales fall 12 per cent year-on-year.
Broker Cenkos forecasts full-year adjusted pre-tax profit of £4.6m, with EPS of 22p (from £3.7m and 19.3p in 2012).
CML MICROSYSTEMS (CML) | ||||
|---|---|---|---|---|
| ORD PRICE: | 376p | MARKET VALUE: | £59.4m | |
| TOUCH: | 372-380 | 12-MONTH HIGH: | 403p | LOW: 197p |
| DIVIDEND YIELD: | 1.1% | PE RATIO: | 17 | |
| NET ASSET VALUE: | 127p | NET CASH: | £6.5m | |
| Half-year to 30 Sep | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 12.3 | 2.02 | 9.87 | nil |
| 2012 | 12.7 | 2.41 | 11.2 | nil |
| % change | +3 | +19 | +13 | - |
