Imagination Technologies - Interim Results for the six months to 31 October 2012

December 12, 2012 -- Imagination Technologies Group plc (LSE: IMG, "Imagination", "the Group"), a leading multimedia, communications and embedded processor technology company, today announces results for the six months to 31 October 2012.

View the full results statement here

• Group half-year revenue up 27% to £71.4m (2011: £56.3m)
  • Strong Technology performance maintained with revenues increased 34% to £57.3m (2011: £42.6m)
    • Royalty revenue jumps 66% to £39.1m (2011: £23.6m)
    • Another strong level of 1H licensing revenues of £17.8m (2011: £19.0m, 2010: £11.6m)
  • Pure revenue improved to £14.1m (2011: £13.7m)
    • Slightly improved UK retail but mixed international markets
• Adjusted pre-tax profit* up 10% to £16.8m (2011: £15.3m)
• Reported pre-tax profit of £10.5m (2011: £10.4m)
• Adjusted earnings per share* 5.4p (2011: 4.9p)
• Reported earnings per share 3.0p (2011: 3.0p)
• Cash balance of £54.5m (30 April 2012: £66.3m)
  • £12m investment in new building and £5m of strategic investments

* Adjusted results exclude non-recurring items, non-cash based share incentive charges and amortisation of intangible assets acquired from acquisitions. The reconciliation from reported results to adjusted results is set out in note 6.

Royalties and chip/end-product design wins

• Partner chips shipped up more than 90% to 237m units (2011: 123m)
• Significant volume shipments and momentum in all mobile segments, tablet/personal computing, gaming, TV/STB & automotive
  • Including very strong share in lower-end handset and emerging markets growth
  • Average royalty rate reduced as expected with overall revenue effect very positive
• Strong growth in chip design wins with 146 active partner chips (2011: 125); 69 in production (2011: 54)
• Growing number of end-products across key OEMs in all regions including China
• Other high profile products from several key OEMs in the pipeline with a number close to launch
• First ray tracing solution targeting professional market launched and receiving very positive feedback from developers

Licensing

• Maintained good licensing activities across all of our IP including
  • Many new and extended agreements with existing partners including Allwinner, Greenplug, MediaTek, Realtek, Renesas, TI, Toumaz
  • Also a number of on-going long-term subscription licenses with certain key partners
  • Several new partners added including Entropic, Ineda and Socle
• 12 important agreements involving around 20 silicon IP core licenses
  • Addressing all our markets - mobile phone and tablets/mobile computing with both segments across high, mid and low-end categories, TV/STB, PMP/Camera, in-car navigation/dashboard, home connectivity and automation, digital radio and industrial/enterprise equipment
  • Including graphics, video, broadcast/connectivity and processor silicon IP cores, as well as V.VoIP technologies
• Continued active pipeline of prospects across all IP families

Pure business

• UK revenues marginally up and international revenues variable reflecting local markets
  • On-going DAB adoption worldwide and growing demand for connected audio
• Continued strategic development and pathfinding role
  • Focus on development of technologies for digital broadcast, connected devices and home cloud solutions
• Key recent new products launched to drive and complement Imagination key IP

Hossein Yassaie, Chief Executive, commented:

"An increasingly diverse range of product shipments, across our many partners and in all regions, have resulted in more than 90% growth in unit shipments to 237m for the first half – ahead of our target. On average around 1.5 million devices are now being shipped with our IP daily, despite the global economic environment.

"The Group is continuing to build on this momentum and with further significant chip and end-product level design wins anticipated we now expect the full year unit shipments to be close to the 500m unit mark.

"Our 'smart' technologies continue to be adopted across new and existing partners, creating a solid base for continued momentum in future volume growth making our stated goal of around 1bn annual unit shipment by 2016 a realistic objective.

"Despite depressed consumer spending, Pure continues to showcase effectively and help to drive strategic connectivity technologies as part of our overall plans. Whilst the tight economic environment is as expected impacting Pure's performance in the short-term, we anticipate seeing a financial improvement in this division over the medium term, driven by new product opportunities and international markets.

"We remain confident of our continued good progress given the growing demand across our IP families, the growth in design wins across a widening range of end user markets and the momentum in our partners' chip volume"

View the full results statement here

Imagination Technologies - a global leader in multimedia and communication technologies - creates and licenses market-leading processor solutions for graphics, video, display, embedded processing, multi-standard communications and connectivity, and cross-platform V.VoIP & VoLTE. These silicon and software intellectual property (IP) solutions for systems-on-chip (SoC) are complemented by an extensive portfolio of software drivers, developer tools and extensive market and technology-focused ecosystems. Target markets include mobile phone, handheld multimedia devices, connected home consumer, tablets/mobile computing, in-car electronics, telecoms, health, smart energy and connected sensors and controllers. Imagination’s licensees include many of the world’s leading semiconductor, network operator and electronics OEM/ODM companies. Corporate headquarters are located in the United Kingdom, with sales and R&D offices worldwide. See: www.imgtec.com