CML Microsystems (CML), which designs semiconductor chips for wireless and data storage systems, reported healthy half-year figures, helped by structural growth in its end markets. Moreover, and despite only relatively modest overall sales growth, earnings grew strongly - reflecting slightly lower overheads and a two percentage point gross margin rise to 71 per cent.
The storage division, which generates about half of group sales, saw 7 per cent revenue growth - thanks to growing demand for higher-performance flash memory controller devices, while the wireless division grew revenues 10 per cent as the group shipped more digital baseband products and high performance radio frequency integrated circuits. The telecoms business did suffer a 5 per cent sales fall, although the unit only generates about 10 per cent of group sales. Order book visibility remains relatively short term and raw material lead times are extending in some instances. According to analysts at broker Cenkos, there could also be small negative headwinds in the traditionally weaker second half due to uncertain timing of revenue recognition.