CML Microsystems reported a fall in preliminary full-year revenue as end customers reduced stock levels that had built up on their balance sheets. The UK semiconductor group recorded a pre-tax loss of £1.80 million for the fiscal year, and gross margin slipped to 63% from 69% in the prior year.
Company commentary attributed the revenue decline primarily to an ongoing customer inventory overhang, noting that conditions improved during the second half of the year. In addition to the inventory correction, temporary supply issues affecting certain SµRF products weighed on revenue earlier in the period; CML said availability of those products was restored in the second half.
The reduction in gross margin was linked to a shift in the revenue mix, with a higher proportion of non-recurring engineering income contributing to the overall figure, according to the company. While that income stream supported revenue, it lowered the aggregate margin percentage versus the previous year.
During the reporting period CML secured a new $30 million contract related to global navigation satellite system - GNSS - technology. The firm said the combination of a second-half recovery in demand and the award of this contract positions it for renewed growth.
Looking ahead, CML said it expects revenue growth to return in fiscal year 2027. Management pointed to improving visibility in the order book and easing customer inventory levels as the basis for its confidence. At the same time, the company underscored a degree of caution when it comes to customer forecasting, noting that global uncertainties continue to complicate demand planning.
Summary of key financials and operational points:
- Pre-tax loss for the fiscal year: £1.80 million.
- Gross margin: 63% versus 69% in the prior year.
- New contract secured: $30 million in GNSS business.