UPDATE: CML Microsystems Makes 2H Pft But No Dividend For Now

15th Jun 2010 14:27

(Adds detail, executive comment, analyst comment) By Hannah Benjamin Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Semiconductor marker CML Microsystems PLC (CML.LN) Tuesday said it returned to profitability in the second half but won't resume paying dividends any time soon, despite a solid start to the new fiscal year. The group made a full-year, ended March 31, pretax loss of GBP386,000, narrowed from a GBP2 million loss a year earlier. As its first half loss totaled GBP1.1 million, Managing Director Chris Gurry said the final result demonstrates the strength of turnaround the company saw in the second half of the year, when it made a pretax profit of about GBP700,000. "The final result shows we're moving in the right direction and we've definitely become more resilient," Gurry told Dow Jones Newswires. In spite of the swing back to the black, CML said it is too soon to consider a return to the dividend list and instead it plans to keep a tight reign on costs. "We're feeling comfortable going forward but it's a bit early to start paying a dividend straight away. But the appetite for paying one has not gone and we hope to get back there very quickly," Gurry said. The solid end to the fiscal 2010 has continued in to the current year and CML Microsystems plans to drive a return to annual profit through growing its customer base and maintain operating costs. "We kept investing quite heavily in new product development last year, particularly focusing on the wireless and storage markets, and we think the outlook is looking bright for us," Gurry said. About 40% of CML's business comes from its chips in to wireless products--such as police walkie talkies--with another 40% coming from the storage market, or its chips used in removable memory cards. Total fiscal 2010 sales climbed 12% to GBP18 million, aided by the release of new devices, growth in the value of semiconductors shipped into its largest market segment, wireless, and stronger unit shipment growth of memory card chips. While wireless sales rose slightly on the year in the fiscal the stronger demand for its chips came from clients in the storage market, like Cisco Systems Inc. (CSCO). CML Microsystems said both markets offer significant opportunities for growth, with the shift to digital radio from analog expected to drive sales of its wireless chips, while on the storage side demand has remained bullish for things like routers and switches. FinnCap analyst Paul Cornelius said CML's full-year result was "resilient" in spite of turbulent trading conditions, and he added that revenue visibility has improved significantly in the current fiscal year. "We believe CML is well-placed to benefit from the sectoral growth of solid state memory as this storage technology penetrates more mobile devices, such as the iPad," he told clients. -By Hannah Benjamin, Dow Jones Newswires; 44-20-7842-9298; [email protected] (END) Dow Jones Newswires June 15, 2010 09:27 ET (13:27 GMT)