CML Microsystems – operational recovery becoming evident, £12.8m cash, mkt cap £46m, shares 275p, offering 11p dividends – could be the right time to buy!

Mark Watson-Mitchell - 06.08.2026

“Our vision is to be the first-choice semiconductor partner to technology innovators, together transforming how the world communicates.”

It will be an early visit to The Lion Inn next Tuesday morning, 11^th August.

Located in the Essex village of Boreham, close to Chelmsford, the venue ,which offers award-winning cuisine and wine, will host the 2026 AGM for CML Microsystems (LON:CML), due to kick off at 9.30am.

It should prove to be an interesting meeting, especially if the £46m-capitalised group’s Directors detail more about the group’s impressive transformation that is now underway.

Its shares are currently trading at around the 275p level, some 105p cheaper than the 380p peak scored in the late-May SpaceX IPO scurry.

I consider that a re-rating of this little group is due, especially considering its cashed-up balance sheet and evidence of its improving sales and profit potential.

The Business

CML Microsystems is a world leader in the design, development and supply of 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 the 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.

With over £51m net assets, the group is cash-generative, has no debt and is dividend-paying.

The 2026 Results

On Wednesday, 17^th June, the group reported its 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 was 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

In the latest Report & Accounts, Chairman Nigel Clark stated that:

“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.

For FY27, the Board expects to see a return to revenue growth.

Global uncertainties remain a risk, and we are mindful that reliable customer forecasting in this environment requires caution.

However, the group has entered the year backed by a strong team, an expanding product portfolio, a broader customer base and a very healthy level of opportunities in the pipeline.

In summary, 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

At Shore Capital Markets, analyst Alasdair Young 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.

For the current year to end-March 2027, 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 loss), 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

Although the business has been around for some time, it is now just beginning to show its capability in pushing into new and fast-expanding markets in which its technology will prove beneficial.

Early stage?

Yes!

It could now be the right time to buy the group’s shares at 275p and be patient, awaiting big rewards.

I now set a new Target Price at 330p.

(Profile 19.06.25 @ 235p set a Target Price of 295p*)

(Profile 06.08.26 @ 275p set a Target Price of 330p)

CML Microsystems - time to buy?