CML Microsystems, a British semiconductor company, reports an 18% rise in sales despite industry challenges.
- The company is facing a subdued demand for semiconductors and delays in US facility upgrades.
- Planning difficulties and increased costs have escalated due to US building permit delays.
- CML remains optimistic, citing its ability to adapt swiftly to potential tariff changes.
- Plans to sell surplus land at its Essex site aim to boost its financial standing.
CML Microsystems, known for developing mixed-signal, RF, and microwave semiconductors for communications, has achieved an 18% increase in sales, reaching £12.5 million in the six months leading to September. This growth comes at a challenging time for the industry, with the firm highlighting subdued semiconductor demand and delays in upgrading its US facilities.
Building permit challenges in the US have led to increased costs, with these delays hampering the company’s efficiency and cost reduction efforts. The company expects these added expenses to continue into the second half of the financial year, impacting its short-term financial outlook.
Despite these hurdles, CML’s leadership remains confident in its ability to manage potential tariff changes following the election of President Donald Trump. With testing facilities across Asia, the US, and the UK, Managing Director Chris Gurry expressed confidence in the company’s agility to pivot operations as needed, depending on the origins of its products.
To strengthen its financial position, CML is looking to sell excess land at its headquarters in Essex, Oval Park. Having secured planning permission last year, this sale is expected to yield a significant gain over the original purchase price, potentially offsetting some of the costs incurred from the US delays.
Though industry challenges persist, the company’s expansion into new sectors such as microwave, millimetre-wave, and broadcast radio, illustrates its strategic positioning for future growth. The maintenance of its 5p dividend further emphasizes a commitment to shareholder value, even as shares dipped 8% to 234p recently.
CML Microsystems navigates industry challenges through strategic adaptability and asset management.
