Final Results

CML Microsystems PLC
13 June 2006



                              CML MICROSYSTEMS Plc

                              PRELIMINARY RESULTS
  Results well ahead of expectations; risks associated with current year growth

CML Microsystems Plc ('CML'), which designs, manufactures and markets a broad
range of semiconductor products, primarily for the global communications market,
announces its Preliminary Results for the year ending 31st March 2006.

CML's semiconductor solutions serve customers in the wire-line telecom, wireless
data, two-way radio, memory card controller and programmable platform markets.
Operations are in the UK, Germany, the US, Singapore, China and Taiwan.

Commenting on the results, George Gurry, Chairman said:

'I believe the results for the full year ending 31 March 2006 match quite well
with market expectations that your Company would maintain the progress recorded
during the opening half.'

Financial Highlights

•         Turnover up 12% to £26.33m (2005: £23.46m)
•         Pre-tax profit up 51% to £3.49m (2005: £2.31m) - including £695,000
          revaluation of investment properties
•         Earnings per share up 5.4% to 17.68p (2005: 16.77p)
•         Cash reserves remain at a satisfactory level
•         Annual dividend of 10.5p per share (2005: 10.5p), payable 4 August
          2006
•         Research & development expenditure increased to £5m

Business Review

•         Increased sales of memory card controllers to existing and new
          customers
•         Successful adoption of group products within professional and leisure
          wireless communications markets
•         Increased expenditure on product and market expansion and investment
          in operational resources
•         Firm sales growth due to improved sales for memory-card controllers
          and wirelsss communications products - despite weakness in Wireline 
          Telecom products (esp. in China)
•         7 June statement highlighted the possible impact of a slowdown in
          order intake from a significant customer


Regarding prospects, George Gurry, Chairman said:

'I am pleased with the further progress made this year and have confidence in
the future successful growth of your company. However, continuing short-term
order book visibility and customer dependency in one product area are notable
risks to achieving growth during this current year, as advised in my
announcement to the Stock Exchange on 7 June 2006.'



Enquiries:


CML Microsystems Plc                                        www.cmlmicroplc.com
Nigel Clark, Financial Director                            020 7786 9600 (today)
Chris Gurry, Business Development Director             01621 875500 (thereafter)

Parkgreen Communications Ltd                                      020 7786 9600
Paul McManus                                                      07980 541 893
Ben Knowles                                                       07900 346 978




                              Chairman's Statement

I believe the results for the full year ending 31 March 2006 match quite well
with market expectations that your Company would maintain the progress recorded
during the opening half.

Group revenues for the year ending 31 March 2006 show an increase of 12% to
£26.33m (2005: £23.46m), reflecting increased shipments of memory card
controllers to both existing and new customers along with the successful
adoption of group products within professional and leisure wireless
communications markets.

Gross profit improved by £1m to £15.86m but as a percentage of revenue, is
moderately down at 60% (2005: 63%). Year on year operating profits were not
similarly improved however, consequent to an increase in expenditure relating to
product and markets expansion activities, together with the costs associated
with an increased level of investment in group operational resources.

With no restructuring charge this year and reduced net finance costs, pre-tax
profits rose 21% to £2.8m. In addition, a significant gain on the revaluation of
the group's investment properties, which now under IAS 40 have to go through the
Income Statement, further improved the pre-tax profit to £3.5m (2005: £2.3m)
representing an effective pre-tax profit increase of 51%.

During the latter half your Company paid down the performance-related final
purchase sum to the former shareholders of Hyperstone AG.  Also completed was
the restructuring of the group's Taiwan facility from a Hyperstone AG branch
office to a group operating company.

The group's UK operations have historically maintained a defined benefit
employee pension scheme, which has posted a progressive deficit of assets
against actuarial liabilities during recent years.  Steps taken over that time
to limit the deficit have had only slight effect, and further measures were
taken as the year closed which are actuarially predicted to eliminate the
deficit over a five to ten year period.

George Bates, who has served with the board as Group Director of Engineering
since May 1994, retired from his executive position effective from 31 March
2006, but will continue to serve with the board as non-executive director.  From
this position, he will contribute particularly to strategic considerations
concerning technical and engineering elements of the group's product directions.

Research and Development expenditure increased over the full year to £5m and
equated to 19% of revenues. The focus for R&D activities was across all main
market areas and reflects the growth strategy referred to within my interim
statement in November 2005.

Your Directors are again recommending an unchanged annual dividend of 10.5p per
ordinary share (2005: 10.5p per ordinary share) payable, if approved by the
shareholders, on 4 August 2006 to shareholders registered on 7 July 2006.

Despite the worsening of the markets for the group's Wireline Telecom products,
particularly evident in the case of China, reasonably firm overall sales growth
was achieved on the back of improved sales for the group's memory-card
controller and wireless communication products.

Geographically, sales into the Far East fell by 13% driven by lower sales into
Telecom markets in China and lower shipments of memory card products into Taiwan
where competition is particularly prevalent. Positive factors within this
outcome include healthy sales gains into 'Wireless Local Loop' applications
along with shipments for the group's newer devices used in voice-based wireless
communications products.

Within the European markets area, sales posted a 47% increase on the back of
good progress with memory card controllers.  Otherwise, the European markets
were characterised by gains in some sectors largely offset by weakness in
others.

In the Americas, local operations reported product sales up 25% reflecting the
good progress made with improving the group's penetration of the US customer
base. Increasing business within the Americas has been a long-term goal and the
results achieved are testament to the strategy in place.

From a product area perspective, memory card controllers recorded the greatest
gain in sales during the year.  Sales of semiconductor product for two-way radio
applications posted a 19% rise, based encouragingly on the traction being gained
by products released during the previous two years.  This improvement exceeded
internal forecasts.

Revenues from the sale of products for wireless data applications rose 6% over
the previous year, with professional and retail paging, marine safety and
proprietary wireless data networks among the application areas.

I am pleased with the further progress made this year and have confidence in the
future successful growth of your company. However, continuing short-term order
book visibility and customer dependency in one product area are notable risks to
achieving growth during this current year, as advised in my announcement to the
Stock Exchange on 7 June 2006.

The efforts by the Group's employees in achieving these results are recognised
and are paramount to our continued future success.  I would like to join with
the board of Directors in thanking them all for their commitment.

G W Gurry
Chairman
13 June 2006


CML Microsystems Plc
Consolidated Income Statement


                                                                 Unaudited                   Audited
                                                         Year end 31st March         Year end 31st March
                                                                  2006                         2005
                                                                                             Restated
                                                                 £'000                          £'000

Revenue                                                         26,333                         23,457
Cost of sales                                                 (10,473)                        (8,597)
Gross Profit                                                    15,860                         14,860

Distribution and administration costs                         (13,409)                       (12,507)
                                                                 2,451                          2,353

Other operating income                                             472                            581
Operating profit before adjustments                              2,923                          2,934

Restructuring costs                                                  -                          (420)
Share based payments                                              (79)                           (79)
Operating profit after adjustments                               2,844                          2,435

Revaluation of investment properties                               695                              -
Finance costs                                                    (233)                          (249)
Finance income                                                     180                            119
Profit before tax                                                3,486                          2,305

Income taxation                                                  (853)                            181

Profit for the period attributable to equity
shareholders                                                     2,633                          2,486                   
Earnings per share
Basic                                                           17.68p                         16.77p
Diluted                                                         17.66p                         16.64p




Statement of Recognised Income and Expense


                                                                Unaudited                       Audited
                                                          Year end 31st March            Year end 31st March
                                                                  2006                           2005
                                                                                              Restated
                                                                 £'000                          £'000

Profit for the period attributable to equity                     2,633                          2,486
shareholders

Foreign exchange differences                                       350                           (40)
Actuarial profit/(loss)                                            222                          (493)
Income tax on actuarial (gains)/losses                            (67)                            148

Recognised gains and losses relating to the
period                                                           3,138                          2,101


CML Microsystems Plc
Consolidated Balance Sheet


                                                                 Unaudited                    Audited
                                                              31st March 2006            31st March 2005
                                                                                              Restated
                                                                     £'000                      £'000
Assets
Non current assets
Property, plant and equipment                                        7,256                      7,193
Investment properties                                                3,845                      3,150
Intangible assets - Research & development                           6,133                      5,089
Intangible assets - Goodwill on consolidation                        3,512                      3,512
Deferred tax asset                                                   1,165                      1,573
                                                                    21,911                     20,517
Current assets
Inventories                                                          2,233                      1,723
Trade receivables and prepayments                                    5,436                      4,093
Cash and cash equivalents                                            5,708                      8,449
                                                                    13,377                     14,265

Total assets                                                        35,288                     34,782

Liabilities
Current liabilities
Bank loans and overdrafts                                            4,000                      4,378
Trade and other payables                                             3,297                      4,086
Current tax liabilities                                                365                        272
                                                                     7,662                      8,736

Non current liabilities
Deferred tax liabilities                                             3,159                      2,624
Provisions                                                             147                        420
Retirement benefit obligation                                        3,135                      3,504
                                                                     6,441                      6,548

Total liabilities                                                   14,103                     15,284

Net Assets                                                          21,185                     19,498

Equity
Share capital                                                          745                        744
Convertible warrants                                                   120                        120
Capital reserves                                                     4,039                      4,007
Share based payments                                                   162                         82
Foreign exchange differences                                           310                       (40)
Accumulated profits                                                 15,809                     14,585
Shareholders' equity                                                21,185                     19,498




CML Microsystems Plc
Consolidated Cash Flow Statement

                                                                   Unaudited                   Audited
                                                                   Year end                    Year end
                                                                31st March 2006            31st March 2005
                                                                                                   Restated
                                                                           £'000                      £'000
Operating activities
Net profit for the period before income taxes                              3,486                      2,305
Adjustments for:
Revaluation of investment properties                                       (695)                          -
Depreciation                                                                 666                        663
Amortisation of research and development                                   4,005                      3,354
Movement in pension deficit                                                (147)                       (82)
Share based payments                                                          79                         79
Exceptional restructuring costs                                            (273)                        420
Interest expense                                                             233                        249
Interest income                                                            (180)                      (119)
(Decrease)/Increase in working capital                                   (2,533)                        243
Cash flows from operating activities                                       4,641                      7,112
Income tax refunded                                                           69                        142
Net cash flows from operating activities                                   4,710                      7,254

Investing activities
Purchase of tangible fixed assets                                          (722)                    (1,351)
Investment in intangible assets                                          (5,063)                    (4,093)
Disposals of tangible fixed assets                                            19                         99
Interest income                                                              180                        119
Net cash flows from investing activities                                 (5,586)                    (5,226)

Financing activities
Issue of ordinary shares                                                      32                         47
Repayment of bank loan                                                     (378)                          -
Dividends paid to group shareholders                                     (1,563)                    (1,556)
Interest expense                                                           (233)                      (249)
Net cash flows from financing activities                                 (2,142)                    (1,758)

(Decrease)/Increase in cash and cash equivalents                         (3,018)                        270

Movement in cash and cash equivalents:
At start of period                                                         8,449                      8,245
(Decrease)/Increase                                                      (3,018)                        270
Effects of exchange rate changes                                             277                       (66)
At end of period                                                           5,708                      8,449



CML Microsystems Plc
Consolidated Statement of Changes in Equity


                              Share    Convertible    Capital   Share based    Foreign        Accumulated   Total
                             Capital    Warrants     reserves    payments      Exchange         profits
                                                                             differences
                              £'000         £'000       £'000       £'000         £'000           £'000     £'000
Audited
At 1st April 2004               740           240       3,844           3             -          14,000    18,827
Shares issued                     4                       163                                                 167
Warrants converted                          (120)                                                           (120)
Foreign Exchange
differences                                                                        (40)                      (40)
Net actuarial losses
recognised directly to
equity
                                                                                                  (493)     (493)
Deferred tax on actuarial                                                                           148       148
losses
Dividends paid                                                                                  (1,556)   (1,556)
Profit for period                                                                                 2,486     2,486
Share based payments                                                   79                                      79
At 1st April 2005               744           120       4,007          82          (40)          14,585    19,498
Unaudited
Shares issued                     1                        32                                                  33
Foreign Exchange
differences                                                                    350                            350
Net actuarial gains                                                                                           222
recognised directly to                                                                              222
equity
Deferred tax on actuarial                                                                          (67)      (67)
gains
Dividends paid                                                                                  (1,564)   (1,564)
Profit for period                                                                                 2,633     2,633
Share based payments                                                   80                                      80

At 31st March 2006              745           120       4,039         162           310          15,809    21,185



CML Microsystems Plc

Notes

1. Presentation of results

The directors approved this Preliminary announcement on 12th June 2006.

The results for the year have been prepared using International Financial
Reporting Standards. Comparative information previously published under UK
Generally Accepted Accounting Practice has been restated under International
Financial Reporting Standards. Reconciliation's of this restatement may be found
in the announcement dated 15th November 2005.

The audited financial information for the year ended 31st March 2005 is based on
the statutory accounts for the financial year ended 31st March 2005 (restated as
referred to above) that have been filed with the Registrar of Companies and on
which the auditors gave an unqualified audit opinion.

The financial information contained in this announcement does not constitute
statutory accounts as defined by Section 240 of the Companies Act 1985.

2. Dividend

A dividend of 10.5p per Ordinary Share (2005: 10.5p per Ordinary Share) is
recommended in respect of the year ended 31st March 2006 and will be paid on 4th
August 2006 to shareholders on the register as at 7th July 2006.

3. Earnings per share

The calculation of basic and diluted earnings per share is based on the profit
attributable to shareholders, divided by the weighted average number of shares
in issue during the year.


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