CML Microsystems (AIM:CML) shares moved up 8%, to 296.9p, after the RF and microwave semiconductor firm told investors it expects to return to operational profitability earlier than previously forecast.
The AIM-listed group told shareholders at its Annual General Meeting that trading momentum from a strong final quarter of the prior financial year has carried into FY27, with firmer demand across all key market verticals.
Revenue in the opening months of the new financial year is running in line with expectations, while order intake is ahead of forecasts, Non-Executive Chairman Nigel Clark said.
"The board remains confident in its growth strategy and a return to operational profitability now looks likely to be achieved earlier in the current financial year than previously expected", Clark said.
The update points to broad-based demand recovery rather than a single market segment driving the improvement.
News Intelligence what this means for the company
CML Microsystems has pulled forward its expected return to operational profitability, citing order intake running ahead of forecast and broad-based demand recovery across all key market verticals in FY27. The chipmaker's momentum carries forward from a strong final quarter of the prior year, with revenue tracking in line with expectations—a material shift from near-breakeven results that constrained visibility into the company's earnings trajectory.
Earlier profitability recovery strengthens the case for cash generation and potential dividend sustainability, though the announcement contains no new revenue or earnings guidance to quantify the acceleration. The board's confidence rests on order intake momentum rather than a single contract—a more durable signal than reliance on the $30m+ GNSS agreement alone.
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Improving momentum and an earlier return
Alasdair Young, analyst at Shore Capital, in a reaction note, highlighted that CML has confirmed improving momentum with order intake running ahead of expectations across all key verticals.
It adds up to confidence from management that the firm can make an earlier return to operational profitability.
The analyst, meanwhile, flagged upside risk to FY27F forecasts as the group shifts from portfolio development to execution, with potential for significant operating leverage from 5G infrastructure, Industrial IoT and defence exposure.
CML is a house stock for Shore Capital; nonetheless, Young noted a 275p implied valuation (6.9x EV/EBITDA, 1.5x EV/Sales for FY27F) and a 4.0% dividend yield, arguing the shares remain compelling on trough earnings.
