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.