CML Microsystems (LON:CML)  said it is confident of a return to growth in its full year results to 31 March despite profits falling and has recommended a final dividend of 2p, equating to a 4.0p payout for the year, which the group said reflects 'prudence in light of Covid-19 environment’. 
 
The group reported a revenue decline of 6% to £26.4m, from £28.1m in 2019 with sales within the ‘Communications’ segment now representing 57% of total Group turnover.  
 
The Far East region was the single largest contributor to the overall drop in sales, delivering a reduction of £2.17m, or 16%. and exceeding the overall group revenue drop of £1.72m. 
 
With costs of £0.7m relating to M&A activities and restructuring announced in November 2019, profit before taxation fell by 54% to £1.37m (2019: £2.98m) and basic EPS by 43% to 8.98p (2019: 15.77p). 
 
The company recommended a final dividend of 2.0p down from 7.8p the previous year. 
 
The group closed the year with net cash of £8.48m (31 March 2019: £12.81m) reflecting record R&D investment, the acquisition of PRFI and two dividend payments totalling £1.33m. 
 
Shares in CML Microsystems were trading 1.06% lower at 281p on Tuesday morning. 

Despite disruption during the period from both the US/China trade war and COVID-19, the group believes that it is well placed to move forward positively in the medium to long term. 
 
The group said it continues to benefit from a strong balance sheet, a healthy net cash position and operating cash generation, as well as a product portfolio that addresses markets ‘that have a positive outlook.’ 

“There is no hiding from the fact that the year under review has been difficult, and the current environment is delaying realisation of the benefits to come from the hard work taking place behind the scenes,” said Group Managing Director, Chris Gurry. 
 
“The current financial year did commence with a healthier order book than in 2019,”  he said, “although it remains to be seen how this translates to actual market consumption as there may be an element attributable to COVID-19 related supply concerns amongst.” 
 
He added, “Nevertheless, following the operational adjustments made across the prior year, the business is tuned to react swiftly to a revival in demand and the Board remains convinced that a return to growth will be secured as conditions improve." 
 
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