Cml Microsystems Share Discussion Threads

[bones] 26/4/2022 15:45

That’s the buyback programme completed, with the customary CML efficiency! I guess there were known sellers and the partial liquidation of the JM Gurry estate already lined up. Keeps the share base tight.

[wiloughby2] 26/4/2022 08:03

Really quite handy for the company to step in and buy the family shares to facilitate its buy back agenda. Saves having some interfering new shareholder causing ructions in the boardroom ( and may pay out uninterested family members or HMRC's greedy IHT department )Either way good luck to the Gurry family- multi generational efforts

[linton5] 14/4/2022 11:09

Here we go mms will bring her lower I’m waiting guys

[metis20] 14/4/2022 10:07

150k at 355p yesterday

Daily average is only about 25k shares!

Share buyback programme announced yesterday

[sev22] 14/4/2022 08:10

'Tap into a lowly rated high growth technology play'

A Maldon-based semiconductor chip designer and manufacturer is outperforming and is well funded to accelerate growth in a market that is exhibiting secular growth mega trends.

It also offers hidden value.
April 13, 2022
By Simon Thompson

*Trading ahead of analysts’ annual pre-tax profit forecasts of £2mn, up from £1.1mn in 2020/21

*Net cash of £25mn (150p a share), up from £22.6mn at 30 September 2021

*Strong forward order book stretching beyond 12 months

Maldon-based semiconductor chip designer and manufacturer CML Microsystems (CML:380p) is reaping the benefits of the strong secular drivers in its end markets. Following the strategic disposal of its solid-state storage division, CML is a pure-play on the high growth industrial communications market. Specifically, it provides integrated circuits to distributors and system integrators (Cobra, Hytera, Icom, Kenwood, Orbcomm and Sepura are all clients).

CML is not only leveraging its standing as a key supplier to many of the world's Tier 1 equipment manufacturers, but is well funded to accelerate growth in a market that is exhibiting secular growth mega trends. Key drivers are increasing demand for data to be transmitted faster and more securely, the upgrading of telecoms infrastructure, and the growing prevalence of private commercial wireless networks for voice and data communications linked to the industrial internet of things (IIoT). In data-centric markets, higher data throughput from terrestrial and satellite communications applications are required to meet the needs of the growing machine-to-machine (M2M) and IIoT market segments.

CML’s addressable market is worth $1bn (£768bn) and includes a number of key growth areas in the coming years: critical infrastructure (public utilities, smart grid, RF identification (RFID)); 5G (repeaters, small/pico cells, fixed wireless access, distributed antenna systems, smart meters); and satellite communications (terminals, broadband access).

To address these multiple growth markets, CML has been expanding its semiconductor product portfolio by adding narrowband applications operating at the lower end of the radio spectrum. As opposed to broadband, these applications use short-range fixed-location wireless applications such as RFID, commercial vehicle remote keyless entry devices or narrowband-IoT focused on indoor coverage, low cost, long battery life and high connection density. The acquisition of a third-party design house, PRFI, has been instrumental in widening the product offering and addressable markets.

PRFI is an approved third-party design house for several leading global semiconductor companies and boasts an impressive client roster that includes BAE Systems, Huawei, Inmarsat, National Semiconductor, QinetiQ, Samsung, Sony Semiconductor and Thales. PRFI was acquired not only for its expertise in microwave and millimetre-wave frequencies, including wide band applications for high data rate applications, but to speed up the time-to-market for new products. It’s doing just that, launching a new SµRF range of high frequency, high bandwidth integrated circuits targeting RF and millimetre-wave frequencies in emerging markets such as 5G, satellite and IoT. First orders have already been received from early-stage adopters within vehicle tracking and smart grid applications.

Importantly, CML’s diverse, blue-chip client base includes some of the world's leading commercial and industrial product manufacturers, and the spread of its customers and diversity of the product range help protect the business from the cyclicality usually associated with the semiconductor industry. Moreover, CML’s proprietary IP, reputation for quality and reliability, and single-source supplier status means that once its chips are designed in a client’s product then it rarely loses a contract given the significant product redesign required for the client to take its business elsewhere.

Furthermore, CML works closely with clients through the product development cycle, to reduce the time-to-market and de-risk the future sales cycle. Effectively, this ‘one-stop shop’ offering is an extension of the customer’s own engineering team. CML utilises a combination of outsourced manufacturing and in-house testing, employing 147 staff, of which 40 per cent are engineers, across operations in the UK, Asia and the US.

Currently, a high proportion of sales are derived from Professional Mobile Radios (the network of choice for the police, ambulance service, military and other critical infrastructure markets), and data-centric wireless applications (critical infrastructure, public utilities, smart grid). 5G infrastructure (base stations, small cells, distributed antenna systems) and satellite communications are a smaller part of the mix, but their contribution is forecast to ramp up in the coming years.

The secular growth drivers are driving revenue and profits upwards. CML has outperformed house broker Shore Capital’s previously upgraded full-year earnings estimates and is well set to lift pre-tax profit by 25 per cent to £2.5mn on 11 per cent higher revenue of £17.6mn in the new financial year. On this basis, the shares are rated on an attractive cash-adjusted forward price/earnings (PE) ratio of 15 and offer a prospective dividend yield of 2.8 per cent. A recently announced earnings accertive £3mn share buy-back programme is another bull point.

CML has hidden value in its balance sheet, too, owning valuable unencumbered investment property near Chelmsford as well as the old Microsense facility at Portsmouth which is let to a third party. These properties were last valued at £3.78mn, a valuation well underpinned by rental income of £0.34mn. In addition, the unencumbered property and 29 acres of surplus land at the Maldon headquarters has a £4.5mn carrying value, or less than half its estimated open market value.

I initiated coverage, at 400p, earlier this year (Alpha Report: ‘Profit from semiconductor megatrends’, 4 February 2022), and see potential for almost 50 per cent share price upside to my 550p target price. BUY.

[hew] 14/4/2022 08:06

"see potential for almost 50 per cent share price upside to my 550p target price. Buy."

[c3479z] 13/4/2022 20:42

ST has recommended cml again.

[linton5] 13/4/2022 15:12

Yes totally agree fantastic long term stock for the patient this one, keeping something back for mm games

[bones] 13/4/2022 14:52

Looks like they are finding ready sellers at 350p. It’s been clear ever since the volume that appeared after the Simon Thompson analysis (target price 550p) in February that there has been a large seller. Maybe the company is aware of one of the institutions wanting out and is helping them along at this level.

[linton5] 13/4/2022 11:50

Oops my error authority to repurchase 2.58 million

[bones] 13/4/2022 11:46

It's up to £3M worth. Depending on price, that might be 800k of shares?

They have authority for a lot more but this three month programme is for up to £3M in value. The AGM in August will have a vote to give further authority.

[linton5] 13/4/2022 11:38

Took some but not showing bones

[linton5] 13/4/2022 11:36

Cml has Only 17million shares and going to purchase 3million back 25mill cash and no debt. Say no more

[bones] 13/4/2022 11:07

CML initiating a share buy back programme of up to £3M.

Like me, they must feel the shares are underpriced.

[bones] 05/4/2022 18:19

In a period when profit warnings are being issued daily, I like a management that can offer summaries like these:

“The Board is pleased to report that trading for the full year is expected to be slightly ahead of current market expectations.”

“The Group's significant cash balance provides financial flexibility to maximise its future growth potential.”

“The Board remains confident in the Group's strategy to deliver significant, sustainable growth over the coming years.”

[bones] 05/4/2022 13:53

In those numbers forecast by Shore Capital, they seem to think cash would be less than £21M, presumably due to net investment in the business.

With a property disposal now in the numbers according to today’s update, the cash balance is £25M. Assuming Shore’s reasoning stands, that implies a £4M cash windfall from the sale of property. If so, is there scope for another special dividend?

[bones] 05/4/2022 09:00

There’s a bit of detail in the recent Simon Thompson analysis (page 10), Langland.



It’s possible he might remind readers this week following this trading update.

[langland] 05/4/2022 08:19

Do we know what forecast ebitda or PBT is please?

[bones] 05/4/2022 08:10

I like this comment in particular:

“Research and development activities along with operational investments to support the market introduction of new products continue to gather pace. The forward order book remains strong, with scheduled shipments stretching beyond twelve months.”

[bones] 05/4/2022 07:56

Market cap of £56M (before the open today) and cash on hand of £25M. No debt and making profits.

[bones] 05/4/2022 07:51

“Slightly ahead” of market expectations and an investment property sold.

In today’s obstacle-strewn economic environment, these grudgingly supplied words are possibly very welcome!

Maybe they were tying up the property sale pre-year end before the trading update could be finalised.

[gleach23] 26/3/2022 11:29

So no trading update this past week. Next possibility is a pre-close update and notice of results this coming week if the timing per last September's interims is followed.

[bones] 19/3/2022 16:46

Another couple. First is from December 2021 and second a year earlier. Both with PRFI’s CEO, Liam Devlin.

[bones] 19/3/2022 15:50

Item of interest:



PRFI is the company CML acquired in early 2020 and which is now key to the future strategy of developing mmWave designs for the 5G semiconductor market.