CML Microsystems - Trading Update due could show cash-rich group's increased Order Book, shares 230p, SQC TP 275p

Mark Watson-Mitchell - 27.03.2026

We have no date yet for CML Microsystems (LON:CML) announcing its Trading Update for its year to end-March, however, it could well be within days.

The Maldon-based company develops mixed-signal, RF and microwave semiconductors for global communications markets.

The group's shares are currently trading at around the 230p level, which capitalises the business, with some £10m in cash, at just £38.2m, which could well prove to be a bargain buying level.

The group's broker reckons that the business is ‘entering another growth phase’.

The Business

The group utilises a combination of in-house expertise and outsourced manufacturing and has trading operations in Europe, the Far East and the Americas.

CML targets niche markets with strong growth profiles and high barriers to entry.

It has secured a diverse, blue-chip customer base, including some of the world’s leading communications equipment providers and industrial product manufacturers.

The spread of its customers and products significantly insulates the business from the cyclicality usually associated with the consumer side of the semiconductor industry.

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

CML develops mixed-signal, RF and microwave semiconductors for global communications markets.

Semiconductor solutions are targeted predominantly at Wireless Communications applications demanding high reliability and durability.

The group is cash-generative, with a strong, asset-backed balance sheet and a net cash position.

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

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

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

Interim Results

On Tuesday, 18th November, the group reported a 27% decrease in revenue to £9.18m for its six months to end-September, attributed to market destocking, though profit from operations, after exceptional items of £2.43m, reached £2.52m, with basic earnings per share at 11.57p.

The company stated that it maintained a net cash position of £10.68m and that it was declaring an interim dividend of 5p per ordinary share, reflecting steady progress and strengthening order intake that underpins confidence in a return to growth, with the second half expected to show material sequential revenue growth and a return to pre-exceptional operating profitability.

Management Comment

Last November, when delivering the group's Interim Results, Managing Director Chris Gurry stated that:

"The first six months have delivered operational and financial results in line with our expectations, and the improved order intake adds credence to our belief that the Group is entering another growth phase.

With the multi-year business transformation complete, our focus is now on sustainable progress as we transition to a more diversified revenue base.

The Board is confident that we are on the road to sustained and profitable growth, with the second half period expected to deliver material sequential revenue growth and a return to pre-exceptional operating profitability."

The Equity

There are some 16.6m shares in issue.

The larger holders include Premier Fund Managers (9.54%), Otus Capital Management (8.73%), MI Gurry (7.92%), CA Gurry, MD (7.76%), TMR Dean (7.64%), Nathan Zommer (7.53%), GPIM (4.86%), Herald Investment Management (6.49%),GPIM (4.86%), Charles Stanley Investment Management (4.66%), Hargreaves Lansdown (4.27%), Liontrust Asset Management (3.36%), and Interactive Investor (3.35%).

Broker's View

Analyst Alasdair Young, at Shore Capital Markets, considered that the Interim results were in line with management’s expectations.

Most importantly, an improved order intake and several new design wins support the view that the business will return to material growth (both sequential and yoy) in H2.

Moreover, with its broadest ever product portfolio, several first production orders received, the relocation of MwT to new Silicon Valley premises in the rear-view mirror, and industry over-stocking issues receding, management believes that the business is ‘entering another growth phase’.

The sector at which CML is currently aiming is very alive and 'on trend', which could interest private investors after the Trading Update is announced shortly.

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

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