CML Microsystems hits four-year low on uncertain outlook

The market value of CML Microsystems dropped by a tenth on Tuesday after the semiconductors group reported a halving of profits in its first half amid "subdued" market conditions, and said meeting full-year targets might be "challenging".

The company, which makes mixed-signal, RF and microwave semiconductors for global communications markets, said earnings per share were 4.34p in the six months to 30 September, down from 9.44p the year before, with pre-tax profit slumping to £0.8m from £1.9m.

Revenues were 18% higher at £12.5m, helped by a £3.5m maiden contribution from products associated with CML's acquisition of MwT last October.

However, while sales grew strongly in the UK and Americas divisions, up 28% and 137% respectively, revenues in the "Far East" segment of the business – which accounted for 15% of sales last year – dropped by close to 10% due to tough conditions in China.

Looking ahead, the company said that, if the current trading environment persists, "it will become challenging to meet management's full-year expectations for trading profitability [due to] the investment efforts to unlock future financial and operational gains alongside the protracted US building permit process and related costs".

The stock was down 10.11% at a four-year low of 230.12p by 1222 GMT, extending the year-to-date loss to 39%.