CML Microsystems – making strategic advances with renewed growth in view, with operational recovery becoming evident

Mark Watson-Mitchell - 17.06.2026

At the start of April this year, the shares of the £48m-capitalised CML Microsystems (LON:CML) were trading at just 194p, within two months they almost doubled hitting 380p.

On Thursday of last week, 11^th June, they had eased back to 265p, swinging wildly along with others within the Space Sector.

Last night they closed at 295p, but just where the market takes them now will be the big question.

This morning the Langford, Essex-based group, which develops mixed-signal, RF and Microwave semiconductors for the global communications markets, reported its Final Results for its year to end-March.

They showed a strong second-half recovery while making strategic progress for the group’s renewed growth.

The Business

CML develops mixed-signal, radio frequency and microwave semiconductors for the global communications markets.

The group utilises a combination of outsourced manufacturing and in-house testing with trading operations in the UK, Asia and USA.

CML targets sub-segments within communication markets with strong growth profiles and high barriers to entry.

It offers a range of products, including millimetre wave (mmWave) MMICs, RF transceivers, baseband processors, data controllers and interface devices, which are used in various applications such as critical communications, satellite and network infrastructure. 

It has secured a diverse, blue-chip customer base, including some of the world's leading commercial and industrial product manufacturers.

Growth in its end-markets is being driven by factors such as the appetite for data to be transmitted faster and more securely, the upgrading of telecoms infrastructure around the world and the growing prevalence of private commercial wireless networks for voice and/or data communications linked to the industrial internet of things (IIoT).

It offers services across markets, such as wireless digital transformation, network infrastructure, hybrid PMR-LTE systems, public safety, satellite, Internet of things (IoT), broadcast, and aerospace and defence.

The company has investments in fifth generation (5G) infrastructure, including small cells and beamforming technologies.

The group is cash-generative, has no debt and is dividend-paying.

The 2026 Final Results

The group reported full-year results to end-March, with revenue of £20.45m, a decrease from £22.90m in the prior year, though a strong second-half recovery was noted.

Gross profit was £12.89m with a 63% margin, down from 69% in FY25.

The company's cash balance increased to £12.80m, and net assets grew to £51.45m.

A final dividend of 6.0p per share is recommended, maintaining the full-year dividend at 11.0p.

Key operational highlights include a significant 12-year design and supply agreement valued at over $30m with a global GNSS equipment manufacturer, and a £5.50m investment in R&D.

The company expects a return to revenue growth in FY27.

Management Comment

Group MD Chris Gurry stated that:

"FY26 delivered significant strategic and operational progress despite continued market headwinds.

The second half saw a stronger financial performance, supported by improving customer inventory levels and growing order activity, while the signing of our long-term GNSS contract represents an important milestone for the business.

With our transformation complete, a strong balance sheet supporting multi-year growth, an expanding product portfolio and healthy level of opportunity in the pipeline, we enter FY27 expecting a return to revenue growth and the Board remains confident that the Group is well placed to deliver on its growth ambitions."

Chairman Nigel Clark stated that:

“I am struck by how much has been achieved over the past year despite difficult global conditions.

Just over five years ago, we concluded that the constitution of the business needed to change if we were to deliver meaningful and sustainable growth.

A combination of corporate activity, whilst simultaneously investing in people and operations, means we can look forward with confidence at our materially larger market opportunity and product range.

Throughout this period, we have consistently provided shareholder returns via dividends, buybacks and a return of capital.

With the business transformation completed we have transitioned to a growth phase, where we will begin to realise the benefits of those actions.

Our anticipated progress is based upon a continued winding down of the customer inventory overhang along with firmer demand across the key market verticals.

Positive revenue momentum in the final months of FY26 was encouraging and has continued into the new year.

The Board is confident that the Group is well placed to deliver on its growth ambitions across our target markets through an enlarged and increasingly differentiated product set.”

The Equity

There are some 17.23m shares in issue.

The larger holders include Premier Fund Managers (9.54%), Christopher Gurry (7.76%), Nathan Zommer (7.53%), Herald Investment Management (6.27%), GPIM Ltd. (4.86%), and Liontrust Investment Partners (3.27%).

Broker’s View

Analyst Alasdair Young, at Shore Capital Markets, reflects that in the longer term, he sees scope for continued margin expansion, with incremental gross profit set to drop through to the bottom line at a very high conversion rate.

“We continue to view the shares as trading on a trough multiple of trough earnings with scope for a re-rating as operational recovery becomes more evident.”

For the current year to end-March, he sees revenues of £23.9m (£20.4m), an adjusted pre-tax loss of £0.1m (loss of £1.8m), with negative earnings improving to 0.2p (3.4p), while the group identifies its own prospects by continuing to pay out a dividend of 11.0p per share.

“With multiple growth levers in place and a strong balance sheet, we believe the shares offer compelling upside as operational recovery becomes more evident.

We continue to view the current valuation as reflecting a trough multiple on trough earnings.”

My View

The shares may well fall away from the current 295p, however, if they ease too far that could provide longer-term investors with ideal buying opportunities.

(Profile 19.06.25 @ 235p set a Target Price of 290p*)

(Profile 27.03.26 @ 230p set a Target Price of 275p*)