CML Microsystems experiences an 18% sales increase despite challenges.
- The company warns of reduced semiconductor demand and construction delays.
- Facility upgrades in the US face planning hurdles and increased costs.
- The firm remains adaptable to potential European tariffs on US exports.
- CML aims to sell unused land, expecting significant profits.
CML Microsystems, a renowned British chipmaker, has seen an impressive 18% rise in sales, reaching £12.5m for the six months ending in September. This growth comes as the company navigates a challenging landscape marked by lower demand for semiconductors and significant delays in construction projects.
The Essex-based company has been impacted by planning and cost issues in its planned upgrades for the US facilities. These setbacks are primarily due to delays in obtaining necessary local US government permits, which are crucial for unlocking efficiency and cost benefits. This bureaucratic roadblock has resulted in elevated costs expected to stretch into the latter half of the financial year.
Despite these obstacles, CML maintains a forward-thinking stance regarding potential tariffs on European exports to the US, following recent political developments. Managing Director Chris Gurry emphasized the company’s readiness to adapt, stating they could ‘rearrange things’ if required. With testing facilities in multiple global locations, CML is well-positioned to manage product origination flexibly.
CML has not only focused on overcoming these operational challenges but is also strategically preparing to dispose of surplus properties, including excess land at its Essex headquarters. The planned sale of this land, approved for development, is expected to yield significant profits, enhancing the company’s financial stability.
In terms of financial performance, while sales have increased, pre-tax profits have dipped from £1.9m to £0.8m. However, the company remains undeterred, reaffirming its commitment to its dividend policy. Industry-wide challenges persist, but CML continues to expand into new sectors, including microwave and millimeter-wave technologies, positioning itself favorably for the future.
CML Microsystems displays resilience and strategic foresight amidst industry difficulties, reinforcing its growth trajectory.
