**Summary of CML Microsystems Plc Half-Year Results (H1 FY26)**
**Financial Highlights**
**Revenue Decline** Revenue fell by 27% to £9.18 million (H1 FY25: £12.53 million) due to cyclical destocking in end markets and supply chain challenges.
**Profitability** Profit from operations (after exceptional items of £2.43 million) and profit before tax were £2.52 million (H1 FY25: £0.82 million), supported by cost efficiencies.
**Earnings Per Share (EPS)** Basic EPS after exceptional items was 11.57p (H1 FY25: 4.34p).
**Cash Position** Net cash increased to £10.68 million (31 March 2025: £9.92 million).
**Dividend** An interim dividend of 5p per share was declared, consistent with H1 FY25.
**Operational Highlights**
**Order Intake** Improved sequentially and year-on-year, signaling a potential return to growth.
**MwT Relocation** Completed relocation to Silicon Valley, with ERP integration enhancing efficiency.
**R&D Restructuring** Balanced internal and third-party design work, supporting customer-funded programs.
**Supply Chain** Resolved raw material issues, with affected product availability resuming later in FY26.
**Sales & Marketing** Strengthened new business pipeline, raising awareness in target sectors.
**Strategic Developments**
**Contract Win** Signed a £30 million, 12-year design and supply contract with a leading industrial GNSS equipment manufacturer, diversifying revenue streams.
**DRM Solution** Preparing to release an integrated single-chip DRM solution, targeting growth in digital radio markets, particularly in India and China.
**Market Focus** Refining target applications within chosen verticals (professional communications, industrial IoT, network infrastructure, defense) for FY27.
**Outlook**
**Second Half Expectations** Anticipated material sequential revenue growth and a return to pre-exceptional operating profitability.
**Long-Term Vision** Focus on sustainable growth, diversification, and leveraging multi-year business transformation efforts.
**Management Commentary**
Managing Director Chris Gurry emphasized operational and financial alignment with expectations, improved order intake, and confidence in sustained growth. The Board highlighted progress in strategic transformation and optimism for the future.
**Key Metrics**
**Gross Profit** £6.16 million (H1 FY25: £8.74 million), with margins slightly lower at 67.1% (H1 FY25: 69.8%).
**Adjusted EBITDA** £1.20 million (H1 FY25: £2.88 million).
**Inventory** Reduced to £5.26 million (31 March 2025: £5.66 million), with normalization expected over two years.
**Conclusion**
CML Microsystems demonstrated resilience in H1 FY26 despite revenue decline, with strategic initiatives and operational improvements positioning the company for growth in the second half and beyond. The focus on diversification, efficiency, and long-term value creation underscores confidence in sustained profitability.