We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Customisable watchlists with full streaming quotes from leading exchanges, such as LSE, NASDAQ, NYSE, AMEX, Bovespa, BIT and more.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Imagination Technologies Group | LSE:IMG | London | Ordinary Share | GB0009303123 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 181.25 | 181.50 | 181.75 | 0.00 | 00:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Jan 2020 to Jan 2025
TIDMIMG
RNS Number : 3498K
Imagination Technologies Group PLC
24 June 2014
24 June 2014
Imagination Technologies Group plc
Strong licensing performance across full IP portfolio
Imagination Technologies Group plc (LSE: IMG, "Imagination", "the Group"), a leading multimedia, communications and processor technology company, today announces results for the year ended 30 April 2014.
Financial highlights
-- Group revenues up 13% to GBP170.8m (2013: GBP151.5m)
o Good performance in Technology Business with revenues increased 17% to GBP147.5m (2013: GBP125.7m)
- Licensing revenues up 32% to GBP38.3m (2013: GBP29.1m) - Royalty revenues up 15% to GBP109.0m (2013: GBP95.1m) o Pure revenues of GBP23.2m (2013: GBP25.8m) -- Adjusted operating profit* of GBP24.1m (2013: GBP33.5m) -- Reported operating profit of GBP0.02m (2013: profit GBP11.3m) -- Adjusted earnings per share* 8.1p (2013: 9.4p) -- Reported earnings per share 0.3p (2013: 2.4p) -- Cash generated from operations before working capital of GBP28.3m (2013: GBP34.0m) o Net debt of GBP5.0m (30 April 2013: Excluding MIPS tax liabilities GBP10.7m) o Cash of GBP19.2m. Bank facilities renewed to 2018
* Adjusted profit excludes non-recurring items, items relating to acquisitions and investments, non-cash based share incentive charges and amortization of intangible assets acquired from acquisitions. The reconciliation from reported results to adjusted results is set out in note 2.
Business highlights
Technology business
Licensing & design wins
-- Strong and growing licensing activities across all IP families involving many existing and new customers
-- 115 licenses including 51 for PowerVR (37 GPU, 11 video and 3 camera vision IP), 48 for MIPS CPU, 11 for Ensigma RPU (3x last year), two for Ensigma VoIP and three for FlowCloud
-- Accelerating growth in customer base with new licences involving over 50 partners:
o Existing customers included:- Actions, Allwinner, CSR, Freescale, HiSilicon, Intel, LG, MediaTek, Microchip, Mobileye, Realtek, Renesas, ST and others
o New customers included Atomos, Avago, Ineda, I&C Micro Systems, Lenovo, Toshiba and others
-- Increasing number of customers signing licenses for IP from multiple families
-- Licensing activity has resulted in around 60 new SoC design-wins which will contribute to future royalties
-- Continued active and growing pipeline of prospects across all IP families
Partner chip shipments & royalties
-- Total partner chip shipments of 1,259m
-- Significant volume shipments in: all mobile segments (performance, mainstream and entry smartphones); tablet/personal computing; networking & enterprise; industrial; TV/STB & automotive
o Smartphone market continued to grow albeit with lower growth rates
o Average royalty rate maintained at prior year's level due to the mix
-- PowerVR Series6 graphics shipping in volume across all key segments including mobile, TV and automotive
-- Growing MIPS volume in developing 32-bit microcontroller and Internet of Things (IoT) markets, with MIPS 64-bit architecture well established in multiple markets
-- Strong PowerVR video processing IP unit shipments
Pure business
-- Continues to drive key markets
o Launch of Jongo wireless speaker products in key UK and US markets
o Continued refresh of DAB product line-up
-- Strategic interest from key players in our wireless and multi-room speaker technologies resulted in a number of licenses signed
-- Organisational changes to reduce costs and better align with our IP business
Hossein Yassaie, Chief Executive, commented:
"The significant growth in the licensing deal closure and the growing customer base confirm the strong alignment of our technologies to the existing and emerging markets as well as our partners' needs.
"The strong and growing demand across all IP areas, including PowerVR graphics & video, MIPS processors and Ensigma communications coupled with growing trends of customers opting for multiple IP families or IP platforms, validate the strength of our strategy and the relevance of our roadmaps.
"All the indications from existing and new customers are that the alternative that MIPS processors offer is credible, respected and welcome, both for the technological benefits and the much needed industry balance they can help to bring about. The active licensing trends and the strong support from the industry leaders for the recently launched prpl foundation, focused on MIPS ecosystem, are clear indications of our real and continued progress.
"As the licensing deal closures show, the demand for Ensigma communications technology is accelerating. This is driven by the emerging trends in the Internet of Things and home connectivity.
"Whilst there will continue to be fluctuations and changes in the markets in which we operate, we are confident that our comprehensive and complementary IP families, and the solution-centric IP platforms they are enabling, will allow us to take advantage of the numerous growth opportunities ahead."
Enquiries: Imagination Technologies Group Tel (today): 020 7457 2020 plc Sir Hossein Yassaie, CEO Tel (thereafter): 01923 260 511 Richard Smith, CFO Instinctif Partners Tel: 020 7457 2020 Adrian Duffield / Kay Larsen
About Imagination Technologies
Imagination Technologies - a global leader in multimedia, processor, communication and cloud technologies - creates and licenses market-leading processor solutions including graphics, video, vision, CPU and embedded processing, multi-standard communications, cross-platform VoIP and VoLTE, and cloud connectivity. These silicon and software intellectual property (IP) solutions for systems-on-chip (SoC) are complemented by an extensive portfolio of software, tools and ecosystems. Target markets include mobile phone, connected home consumer, mobile and tablet computing, in-car electronics, networking, telecoms, health, smart energy and connected sensors. Imagination's licensees include many of the world's leading semiconductor manufacturers, network operators and OEM/ODMs. Corporate headquarters are located in the United Kingdom, with sales and R&D offices worldwide. See: www.imgtec.com.
Overview
Imagination has continued to innovate in the development of its three fundamental and strategic silicon IP families, PowerVR Multimedia, MIPS Processors, and Ensigma Communications. The three carefully developed IP families are central to the Group's overall strategy and they:
-- offer a strong and comprehensive range of IP-level products that address each specific area very well
and
-- enable solution-centric platforms that can efficiently address all key existing and new markets.
In each of our technology areas we have real advantages, unique qualities and growing ecosystems that our customers value. Additionally we are seeing that emerging demand for a solution-centric IP model is a fundamental industry trend, which is driven by the overall supply-chain evolution over the years ahead. Our strategy has been designed to both take advantage of the disruptive nature of each of our technologies and also address the overall changing needs of the market we operate in. Our customers' positive feedback and growing interest in our activities is a strong indicator of the relevance of our strategy to the markets we operate in and their future.
The Group's latest PowerVR Series6 Rogue graphics products are now shipping in key market segments with the new architecture delivering the significant performance benefits that we expected. While the architecture allows very high performance to be achieved with high levels of power efficiency, we have developed a broader range of cores and have had significant engagement across the range, particularly in cores optimised for area and power efficiency. The strength of our new low-end offerings from Series6XE has fuelled significant design wins in low and mid-range application processors for smartphones and tablets, which will reach the market over the next 12 to 24 months. Series6XT continues to set the standard for performance and efficiency for mid to high-end devices with industry leaders continuing to adopt higher end configurations from this family.
The smartphone market continues to develop with a smaller number of larger players shaping the market. While the market continues to grow at a healthy level its characteristics are trending towards maturity. The Group's technologies and partnerships create a strong position to take full advantage of this large market. Significantly Imagination is well poised to take advantage of the next wave of innovation in other related markets such as wearables.
The integration of MIPS has progressed very smoothly with the enlarged processor R&D team focused on development of new CPU cores. The business continues to make a positive financial contribution to the Group. Customer feedback on the Group's plans and roadmap has been very positive with a record level, well over 50 license deals, signed since the MIPS acquisition. Given the numerous opportunities we continue to believe that longer term MIPS has the potential to contribute significant additional value to the business. The creation of the prpl foundation, focussed on MIPS open source ecosystem development and with industry-leading founding members including Qualcomm and Broadcom, was among the key developments during the year.
The capabilities of our Ensigma communications technology are being recognised with significant growth in licensing during the year and many further potential customers also evaluating this disruptive technology. We expect the deployment of this technology to follow a similar trajectory to graphics in terms of migration to on-chip integration and volume potential.
In August 2013 the Group acquired Posedge, a provider of networking, security and connectivity IP and SoC design services. This acquisition strongly complements our Ensigma connectivity IP as well as boosting our SoC design services and IP platform delivery capability.
In December 2013 the Group acquired Kisel Microelectronics, a small but leading provider of digital RF IP. A significant number of partner designs, using Ensigma communications IP, depend on Kisel's RF technology which is highly complementary to our Ensigma offering. This acquisition has enabled us to make our communications offering more comprehensive covering both baseband and RF areas.
The Pure business continues to complement and accelerate the deployment of key new technologies developed by Imagination. The launch of the Jongo range of wireless multi-room speakers, deploying Ensigma communications IP, MIPS processors and the revolutionary Caskeid audio distribution, in both the UK and the US has been a key focus. We have now secured a number of licenses for the underlying technologies in this platform and expect these engagements to lead to significant and market-changing third-party products.
As part of the development of the Group and the growing focus on platform delivery we have undertaken an organisational restructure in the Pure division during the year to further align the activities, reduce cost and increase the focus on the critical projects for this business.
Investment in group-wide R&D remains critical to the success of the business. We continued to use a combination of organic growth and small scale acquisitions to develop the technology and capability to achieve our strategy. During the year we tightly controlled the rate of investment to ensure the operating cost base is effectively managed resulting in significantly lower cost growth rates than recent years, which we expect to sustain going forward.
The Group's capital investment programme continued with both the datacentre and the second phase of the three phase Kings Langley redevelopment now complete. The value of assets created by this programme over the last three years is now in excess of GBP50m.
Financial Review
Revenue
Group revenue for the period ending 30 April 2014 increased by 13% to GBP170.8m (2013: GBP151.5m).
Licensing revenue increased 32% to GBP38.3m (2013: GBP29.1m). H2 saw substantial growth both sequentially and year on year with revenue of GBP23.9m (H2 2013: GBP11.3m) from a wide range of existing and new licensees, across all of our technology areas. Licensing revenue was adversely affected by the strengthening of sterling in the year and increased on a dollar basis by 35%. The high levels of licensing activity also helped to increase the licensing backlog during the year.
Royalty revenue increased by 15% to GBP109.0m (2013: GBP95.1m). Royalty revenue was also adversely affected by the strengthening of sterling in the year and increased on a dollar basis by 18%.
Due to the slowdown in growth of the smartphone market and short-term competitive activities in the lower-end mobile segments, partners' chip shipments (excluding MIPS) decreased 1% to 530m (2013: 535m) units. MIPS' partner shipments totalled 729m units in the year.
The average royalty rate, excluding MIPS, was maintained at prior year levels due to a better mix than expected.
Pure continued to experience a difficult environment in the UK and some export markets which resulted in revenue of GBP23.2m (2013: GBP25.8m).
Profit and operating expenses
Driven by strong licensing successes in the high margin Technology business, Group gross profit was up 15% to GBP150.3m (2013: GBP130.7m) with overall gross margin increasing to 88% (2013: 86%).
Underlying Group operating expenses were tightly controlled growing less than expected to GBP126.3m (2013: GBP97.2m). The increase in operating expenses is primarily driven by the full year impact of MIPS costs following the acquisition in February 2013. The underlying rate of operating expense growth was significantly lower than previous years at 11%.
Underlying expenses are those expenses incurred before calculating adjusted operating profit* and exclude:
-- non-cash share-based incentives charge of GBP13.2m (2013: GBP11.3m); -- amortisation of intangibles from acquisitions of GBP8.6m (2013: GBP4.2m); -- acquisition related costs of GBP1.3m (2013: GBP2.7m); -- impairment of investments of GBP2.6m (2013: GBP5.7m); -- gain on investments of GBP0.3m (2013: GBP1.8m); -- contingent acquisition consideration release of GBP1.6m (2013: GBPnil); and -- one-off Group restructuring costs of GBP0.4m (2013: GBPnil).
Adjusted operating profit for the Technology business was GBP31.5m (2013: GBP39.9m) reflecting the transitional conditions in the mobile segment. The adjusted net operating margin for the technology business was 21% (2013: 32%).
For Pure the difficult trading conditions resulted in an adjusted operating loss of GBP7.4m (2013: GBP6.4m). The organisational changes are expected to result in annual savings of GBP2.0m p.a..
Earnings and taxation
The Group's adjusted operating profit was GBP24.1m (2013: GBP33.5m). The reported operating profit was GBP0.02m (2013: profit GBP11.3m). Despite the 13% increase in revenue, the adjusted and reported operating profits reduced in the year. This was due to the increase in underlying expenses of 30% resulting from important investments made in R&D together with the full year impact of the MIPS acquisition.
The net tax position was a credit of GBP1.1m (2013: charge GBP5.9m). The deferred tax asset on the Group balance sheet to be utilised against future UK profits has reduced to GBP4.9m (2013: GBP10.4m). The tax credit in the year arose primarily from the finalisation of the 2013 tax filings for the US operations.
The Group's adjusted earnings per share was 8.1p (2013: 9.4p). The Group's reported earnings per share is 0.3p (2013: 2.4p).
Balance sheet
Goodwill at 30 April 2014 was GBP59.8m (2013: GBP55.0m). The increase of GBP4.8m is due to the acquisitions of Posedge and Kisel.
The investment balance increased to GBP21.1m (2013: GBP18.7m) following investments made during the year in Ineda Systems, NetSpeed, Onkyo, Blu-Wireless, Orca Systems, UBC Media and Toumaz totalling GBP3.6m, and a subsequent appreciation in the value of investments predominantly due to movements in share price and exchange rates of GBP1.0m which was recognised in the revaluation reserve. These increases were offset by a net GBP2.2m impairment charge which was recognised in the income statement.
Property, plant and equipment was GBP63.6m (2013: GBP45.9m) reflecting the capital expenditure of GBP22.3m (2013: GBP22.1m). The primary element of this is the re-development of the Group's property facilities in Kings Langley. This is the third year of the four year re-development plan.
Trade and other receivables were GBP51.0m (2013: GBP64.0m). The majority of the decrease is due to the timing of royalty receipts from customers.
Trade and other payables were GBP37.5m (2013: GBP35.6m).
Corporation tax payable was GBP0.2m (2013: GBP56.3m). The reduction in the balance reflected the tax liability that arose from the MIPS acquisition, which was settled on 14 June 2013.
Interest bearing loans and borrowings were GBP24.3m (2013: GBP31.0m). During the year GBP4.5m was repaid.
The deferred tax liability was GBP17.1m (2013: GBP19.2m).
Cash generated from operations before movements in working capital was GBP28.3m (2013: GBP34.0m).
The cash balance decreased to GBP19.2m (2013: GBP76.6m). The decrease reflects the GBP55.9m tax payment in June 2013 that arose as part of the MIPS acquisition. At the year end Group net debt was GBP5.0m (2013: excluding MIPS tax liabilities GBP10.7m).
On 17 June 2014 the Group renewed its existing bank facilities with a new 4 year term to June 2018.
* Adjusted profit is used by management to measure the performance of the business year on year by excluding non-recurring items (items which typically do not occur every year), items relating to acquisitions and investments, non-cash based share incentive charges and amortization of intangible assets acquired from acquisitions. The reconciliation from reported results to adjusted results is set out in note 2.
Technology Business
During the year the Technology business continued to make real progress in both licensing and design wins.
Licensing and design-wins
As expected the momentum in licensing accelerated in the second half of the year leading to a number of important licensing agreements and deal extensions involving over 50 customers and around 115 IP licenses. We saw expanding licensing activities for graphics and video with initial customer engagements for our new vision technology. Additionally there was very strong engagement and licensing for our MIPS processors and significant license growth for the Ensigma communications IP family. Increasing numbers of customers signed licenses for IP from multiple families. There is a growing and general trend towards demand for IP sub-systems or solutions combining multiple IP cores, an aspect that our strategy is designed to fully support.
The target markets for the deals closed include mobile phone and tablets/mobile computing across performance, mainstream and entry categories, TV/STB (set top box) and the emerging video streaming market, home connectivity and automation, wearables, IoT and embedded control, media players/camera, automotive, digital radio and industrial/enterprise equipment.
-- Multimedia - The key technologies under this category are graphics, ray tracing, video and vision:-
o Graphics - The PowerVR graphics processor (GPU) family continues to lead the market in technological capability, roadmap strength and ecosystem and remains by far the most adopted and shipped technology of its kind. During the year there were 37 PowerVR GPU licenses across all markets and segments including several low-end use cases where we expect to regain market share over time.
The PowerVR Series6 technology has seen further deployment in the market and is now shipping for use in automotive, DTV (digital TV) and mobile devices, delivering the latest features (e.g. OpenGL ES 3.x) and demonstrating the performance and power consumption advantages of this class-leading technology. During the year we launched both our PowerVR Series6XT and Series 6XE IP core families. These now provide solutions for the broadest range of performance and area requirements enabling us to support the full range of SoC requirements. We saw strong licensing activities in the year across the full range of these cores.
We announced the PowerVR Wizard family of ray tracing IP cores, and began strategic collaboration with key developers. This technology has been very well received and is in early evaluation with a number of major partners.
o Video - Our PowerVR video decode and encode processor (VPU) families, which support the latest and emerging formats, continue to see strong volume growth. We are seeing a growing industry trend in favour of licensing rather than internal development, particularly as the next generation of advanced video standards are coming to market. During the year there were 11 video core licences.
o Camera Vision Processing - Vision processing is needed to get the best image from a camera sensor. This is an area that is important both for market opportunity and technology synergy reasons. Specifically it is clear that the deployment of camera functionality is relevant to many product categories and market segments. Furthermore careful and tight integration of camera vision processing, video encode and GPU cores can be used to achieve very important optimisations. We announced the first product, the Raptor architecture, in this family in November 2013. The technology has now been licensed to three partners.
-- CPU and Processor cores
Customers' engagements and licensing activities have been strong and encouraging with around 48 licenses concluded globally for MIPS cores across existing and new customers during the year. Among these there were a number of strategically important agreements including, as reported at the first half, a key license with a new tier-one player.
The opportunities for MIPS include:
o Existing customers who have regained confidence in MIPS and continue their commitment to MIPS.
o Previous MIPS customers, who had in recent years engaged with other architectures, reconsidering their future direction.
o New markets with no barriers to entry and no legacy (wearables and IoT) where the partners have selected MIPS over competitors.
o Other markets that will become relevant as the Warrior family is delivered including mobile phones and tablets.
Development of the next generation MIPS Warrior family of processor cores and the drive to strengthen and build on the MIPS ecosystem continue as planned.
Strong progress has also been made in further strengthening the MIPS ecosystem with the recent launch of the industry body prpl (pronounced 'purple'). This foundation which is supported by many industry leaders is another key step to bringing together and further strengthening many key developer communities ensuring comprehensive support for the MIPS ecosystem.
Customer engagements with MIPS remain strong and there is considerable interest in the Warrior family of cores which we launched earlier in the year. We are seeing strong interest for the next cores from this family including a range of 64bit cores which will be available later in 2014.
An important growing market for processors is the wearable device market which is an exciting opportunity for MIPS cores given its efficient architecture and we have seen important progress in this area. During the year Google launched their wearable operating system Android Wear with MIPS announced as a launch partner.
Whilst the progress on MIPS is very encouraging, and is ahead of our internal plans, it should be noted that this is a long-term strategy to offer real choice in the CPU and processor IP market.
The MIPS family of processors combined with our Ensigma communications technology offer a highly efficient 'connected processor' which we believe is uniquely well positioned for many connected devices and the emerging IoT and Machine-to-Machine (M2M) applications.
-- Communications
The Ensigma communications technology is an important and growing part of our business with a number of new customers licensing this technology during the year.
o Connectivity and broadcast - Our Ensigma programmable radio processing unit (RPU) family supports both high performance and low power connectivity standards. These include Wi-Fi, Bluetooth, Bluetooth LE and others as well as multi-standard broadcast receivers, which are essential for many mainstream markets. In particular home connectivity in support of streaming and automation as well as the emerging IoT markets offer major opportunities for our offerings here. We secured 11 further licenses for Ensigma technology during the year, representing 3x growth as this technology becomes a more sizable part of our business.
o VoIP - our family of video and voice over IP (VoIP) products, including platform agnostic SDKs, constitute an important element in our IP offering with relevance to both the arrival of 4G/LTE networks which require VoIP over LTE (VoLTE) and general internet-based communication. Two new licenses were signed for this technology during the year.
The Ensigma product offering was further enhanced during the year with the acquisition of Kisel, a small but leading provider of digital RF IP. This allows us to provide a comprehensive solution to customers who require it, while also working with customers who have their own RF partners or solutions.
-- FlowCloud
This technology is an emerging one with considerable synergy and significant potential for Imagination. Given our strong silicon IP offerings in the key areas of processing and connectivity, we have been taking steps to ensure these technologies are complemented by relevant software technologies that can enable their easy and quick deployment in the emerging IoT and M2M markets. The FlowCloud platform technology has been designed to speed-up the deployment of cloud-managed connected devices in diverse markets including home automation, healthcare monitoring, energy management, security and monitoring, connected/intelligent toys, industrial and agricultural monitoring/control and many more. The technology aims to offer a ready-made ('shrink-wrapped') software platform, running on our silicon IP solutions and covering the server and client ends of such systems. FlowCloud is an application independent software platform that ensures all essential baseline services such as authentication, security, update/maintenance are available to the developers, alongside APIs for functions such as control, streaming, and payment services.
We signed three licenses for FlowCloud software IP during the year.
Partner chip shipments and SoC design-wins
Partner chip unit shipments grew strongly to 1,259m units. Non-MIPS shipments were broadly flat with prior year at 530m (2013: 535m). We have seen an increasing proportion of shipments using Series6 graphics technology and given the design wins achieved during the year we expect this to continue to grow.
The licensing activity in the year has resulted in a significant increase in new committed SoCs with around 60 new SoC design-wins added which will contribute to future royalties.
Pure business
Pure's focus has been and continues to be proactively helping to drive certain important developing and emerging markets that are strategic to our business:-
-- Digital radio:- Pure's product line drove the market from the early days and set the much needed agenda to help develop this new market. This continues today in the form of supporting and driving the adoption of digital radio internationally. We now expect some of these markets, including the UK (which has started a digital tick mark transition phase) to begin migration towards a switch-over plan supported by governments whilst others such as Germany develop further in digital radio penetration. As a result we expect the global markets for digital radio to grow substantially over the next few years with our technology playing a key part and securing a major share. Pure was the first manufacturer to gain the Digital Radio Tick mark for its full, current range of home and in-car digital radios.
-- Wireless home audio:- As a first step in helping to drive home connectivity and automation, Pure has been focussed on wireless audio streaming. These systems use many of Imagination's underlying IP offerings including MIPS processors, Ensigma connectivity processors and FlowCloud technology and are paving the way for the connected home revolution.
-- There are now significant developing partnerships which include tier one players that have been impressed by Pure's products and technologies. The Caskeid stereo and multi-room wireless technologies which power Pure's new Jongo family of wireless speakers deliver industry leading performance and in particular synchronisation capabilities that uniquely match wired systems.
-- Home automation:- A longer term goal is to contribute to the emergence and development of the home automation opportunities through the use of Imagination's processing, connectivity and FlowCloud technologies.
As part of the development of the Group and the growing focus on platform delivery we have undertaken an organisational restructure in the Pure division during the year to further align the activities, reduce cost and increase the focus on the critical projects for this business.
This year Pure has introduced a new mini version of its iconic Evoke digital radio, the Evoke D2, while Bluetooth has been introduced to selected digital radios to reflect the growing trend for wireless streaming. Pure also expanded its new Jongo multiroom speaker range by adding three tabletop wireless speakers, the Jongo T2, T4 and T6. Jongo is the first multiroom speaker range that can be used with any audio or radio app, thanks to the integration of Imagination's Bluetooth Caskeid technology. Pure's in-car digital radio range was boosted by a strategic relationship with the UK's biggest car accessory retailer Halfords, which produced a range of two exclusive 1-DIN car radios, the Highway 260DBi and the Highway 240Di.
Key international milestones included the launch of Pure's music service, Pure Connect, in the US, the celebration of 10 years of Pure digital radio in Switzerland and the ranging of Jongo in around 1,500 Walmart stores in the US.
Outlook
Licensing activity remains strong and we expect to see good performance in licensing during FY15 with high activity levels across all of our IP portfolio. We expect the demand for our graphics and video technologies to remain strong. The progress made with MIPS and the confidence created in the customer base will continue to drive the demand for our processor cores. Additionally the opportunities in home connectivity and IoT provide a positive environment for further development of our MIPS and Ensigma licensing business. We also expect the newer technologies including ray tracing (Wizard family) and vision (Raptor family) to make growing contributions.
Based on licensing and design wins achieved during the year, we expect to see shipment volumes increase during FY15 with growth predominantly coming in the second half of the year. The active licensing in MIPS is driving new SoC designs which will ultimately create new volume. Whilst, as stated before, the historical MIPS volume could be subject to some fluctuations, we expect for FY15 that it will be broadly flat. Non-MIPS volume will be driven by continued growth of existing customers' designs, the timing of the ramp-up for the new design-wins in the lower-end of the smartphone categories and the shipment build-up in newer technologies including Ensigma and Vision IP. We are confident that we will see this volume exceeding 1b unit shipment over the next three years. As all our IP families are increasingly making meaningful contributions to our volume and revenues we plan to report a more representative measure of our market penetration by reporting total volume comprising the units of the multimedia, processor and communications IP shipments.
The smartphone market was around 1b units in 2013, and is expected to grow to around 1.4b by 2016. Given our strong existing and growing partnerships across both of the important established platforms, iOS and Android, and we continue to believe an ultimate graphics market share of around 40% to 60% of the total smartphone market remains a reasonable and realistic goal.
Progress with MIPS has been encouraging and we remain confident in the opportunities for this business. The strong licensing performance during last year and the visibly growing industry engagement and support should be seen as a good indicator of the progress being made. This is a long-term strategic investment which we expect to create substantial value over a 4-5 year period.
Pure continues to showcase our technologies effectively and drive some of our key IP offerings. The focus in the near term is on wireless audio which is a major industry development area. The product focus and the reorganisation changes we have made recently are expected to improve Pure's financial performance.
The investments we have made over the last two years have provided us with the required structures for growth. We expect the growth in underlying operating expenses to be significantly lower than previous years at around 10% in FY15.
Given that the vast majority of our revenue is transacted in dollars, and while we have hedging policies in place, it should be noted that significant foreign exchange rate fluctuations could have an impact on our sterling reporting.
Fundamentally our multimedia (graphics and video) business is very strong with ray tracing and camera vision elements offering new and significant opportunities for the future. MIPS is meeting our expectations with next generation technology well-underway with growing customer endorsement and interest, whilst our Ensigma connectivity activities are now moving from investment to mass market exploitation. Additionally the comprehensive and complementary range of IP cores across these key areas is increasingly enabling us to offer solution-centric IP platforms in support of the new industry trends.
As a result the Board remains confident that the Group is on track to deliver continued progress.
Sir Hossein Yassaie
Chief Executive
24 June 2014
Consolidated income statement
Hot Features
Premium
Year to Year to
30 April 2014 30 April 2013
GBP'000 GBP'000
---------------------------------------------- -------- -------------- --------------
Revenue 170,835 151,467
Cost of sales (20,461) (20,816)
---------------------------------------------- -------- -------------- --------------
Gross profit 150,374 130,651
Research and development expenses (114,835) (83,956)
Sales and administrative expenses (33,257) (28,750)
Group restructuring costs (397) -
Gain on investments 348 1,763
Impairment of investments (2,585) (5,679)
Acquisition related costs (1,275) (2,744)
Contingent acquisition consideration
release 1,648 -
---------------------------------------------- -------- -------------- --------------
Total operating expenses (150,353) (119,366)
---------------------------------------------- -------- -------------- --------------
Operating profit 21 11,285
Financial income 83 1,195
Financial expenses (418) (320)
---------------------------------------------- -------- -------------- --------------
Net financing (expense)/income (335) 875
(Loss)/profit before tax (314) 12,160
Taxation credit/(charge) 1,089 (5,884)
---------------------------------------------- -------- -------------- --------------
Profit for the financial year attributable
to equity holders of the parent 775 6,276
---------------------------------------------- -------- -------------- --------------
Earnings per share Basic 0.3p 2.4p
Diluted 0.3p 2.3p
------------------------ ------------------------------ -------------- --------------
During this year and the previous period all results arise from continuing operations.
Consolidated statement of comprehensive income
Year to Year to
30 April 2014 30 April 2013
GBP'000 GBP'000
---------------------------------------------- --- -------------- --------------
Profit for the financial year attributable
to equity holders of the parent 775 6,276
Other comprehensive income:
Items that are or maybe reclassified
subsequently to profit or loss:
Exchange differences on translation
of the balance sheets of foreign
operations
Exchange differences on translation
of part of the net investment in
foreign operations
4,242 (797)
Change in fair value of assets classified
as available for sale
Tax on items that are or may be reclassified
subsequently to profit or loss (2,206) -
997 -
- -
-------------------------------------------------- -------------- --------------
Total other comprehensive income/(expense)
for the financial year, net of income
tax 3,033 (797)
--------------------------------------------------- -------------- --------------
Total comprehensive income for the
financial year attributable to equity
holders of the parent 3,808 5,479
--------------------------------------------------- -------------- --------------
Consolidated statement of financial position
At 30 April At 30 April
2014 2013
GBP'000 GBP'000
---------------------------------------- ----------- -----------
Non-current assets
Other intangible assets 58,560 59,615
Goodwill 59,834 54,981
Property, plant and equipment 63,616 45,873
Investments 21,081 18,711
Deferred tax 4,928 10,446
Corporation tax 1,657 -
-------------------------------------------- ----------- -----------
209,676 189,626
Current assets
Inventories 9,054 8,512
Trade and other receivables 51,016 64,018
Corporation tax 4,415 -
Cash and cash equivalents 19,248 76,572
-------------------------------------------- ----------- -----------
83,733 149,102
------------------------------------------- ----------- -----------
Total assets 293,409 338,728
-------------------------------------------- ----------- -----------
Current liabilities
Trade and other payables (37,514) (35,575)
Interest bearing loans and borrowings (8,561) (4,643)
Corporation tax payable (240) (56,279)
-------------------------------------------- ----------- -----------
Non-current liabilities (46,315) (96,497)
Other payables (6,010) (2,871)
Interest bearing loans and borrowings (15,696) (26,309)
Deferred tax liability (17,062) (19,241)
Corporation tax (3,325) (2,418)
-------------------------------------------- ----------- -----------
(42,093) (50,839)
Total liabilities (88,408) (147,336)
-------------------------------------------- ----------- -----------
Net assets 205,001 191,392
-------------------------------------------- ----------- -----------
Equity
Called up share capital 26,769 26,571
Share premium account 99,648 99,236
Other capital reserve 1,423 1,423
Merger reserve 2,402 2,402
Revaluation reserve 1,583 586
Translation reserve 1,415 (621)
Retained earnings 71,761 61,795
-------------------------------------------- ----------- -----------
Total equity attributable to equity
holders of the parent 205,001 191,392
-------------------------------------------- ----------- -----------
Consolidated statement of changes in equity
Share Share Other Merger Revaluation Translation Retained
capital premium capital reserve reserve reserve earnings Total
GBP'000 GBP'000 reserve GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
GBP'000
--------------------------- -------- -------- -------- -------- ----------- ----------- --------- --------
At 1 May 2012
26,425 98,348 1,423 2,402 586 176 48,027
Profit for the 177,387
year - - - - - - 6,276
6,276
Other comprehensive
income for the
year:
Exchange differences
on translation
of foreign operations - - - - - (797) -
Change in fair (797)
value of assets
classified as available
for sale - - - - - - - -
--------------------------- -------- -------- -------- -------- ----------- ----------- --------- --------
Total other comprehensive
income for - - - - (797) - (797)
the year
Transactions with
owners:
Share based remuneration
Tax credit in respect
of share-based
incentives
Issue of shares
at nil cost - - - - - - 11,316
Issue of new shares 11,316
- - - - - - (3,793)
31 - - - - - (31) (3,793)
115 888 - - - - - -
1,003
--------------------------- -------- -------- -------- -------- ----------- ----------- --------- --------
At 30 April 2013 26,571 99,236 1,423 2,402 586 (621) 61,795 191,392
--------------------------- -------- -------- -------- -------- ----------- ----------- --------- --------
At 1 May 2013
Profit for the 191,392
year 26,571 99,236 1,423 2,402 586 (621) 61,795
775
Other comprehensive - - - - - - 775
income for the
year:
Exchange differences
on translation
of the balance
sheets of foreign
operations - - - - - 4,242 - 4,242
Exchange differences
on translation
of part of the
net investment
in foreign operations - - - - - (2,206) - (2,206)
Change in fair
value of assets
classified as
available for sale - - - - 997 - - 997
--------------------------- -------- -------- -------- -------- ----------- ----------- --------- --------
Total other comprehensive
income for - - - - 997 2,036 - 3,033
the year
Transactions with
owners:
Share based remuneration
Tax credit in respect
of share-based
incentives
Purchase of shares
for LTIP - - - - - - 13,179
Issue of shares
at nil cost 13,179
Issue of new shares - - - - - - (2,713)
- - - - - - (1,106) (2,713)
169 - - - - - (169) (1,106)
29 412 - - - - - -
441
--------------------------- -------- -------- -------- -------- ----------- ----------- --------- --------
At 30 April 2014 26,769 99,648 1,423 2,402 1,583 1,415 71,761 205,001
--------------------------- -------- -------- -------- -------- ----------- ----------- --------- --------
Consolidated statement of cash flows
Year to Year to
30 April 30 April 2013
2014 GBP'000
GBP'000
-------------------------------------------- ---------- --------------
Cash flows from operating activities
Profit after tax 775 6,276
Tax (credit) / charge (1,089) 5,884
------------------------------------------------ ---------- --------------
(Loss) / profit before tax
(314) 12,160
Adjustments for:
Depreciation and amortization
Loss on disposal of fixed assets 14,392 8,374
Net financing charge / (income) 180 292
Share-based remuneration 335 (875)
Gain on investments 13,179 11,316
Impairment of investments (348) (1,763)
Contingent acquisition consideration 2,585 5,679
release (1,648) -
Group restructure costs 397 -
Exchange difference (479) (1,146)
------------------------------------------------ ---------- --------------
Operating cash flows before movements
in working capital 28,279 34,037
Change in working capital, net of effects
from acquisition of subsidiaries
Increase in inventories (542) (2,598)
Decrease / (increase) in receivables 8,409 (11,708)
Decrease in payables (2,284) (22,263)
------------------------------------------------ ---------- --------------
Cash generated by operations 33,862 (2,532)
Interest paid (580) (103)
Taxes paid (58,442) (1,205)
------------------------------------------------ ---------- --------------
Net cash flows from operating activities
(25,160) (3,840)
Cash flows from investing activities
Investments made in the year
Proceeds from disposal of investments (2,643) (7,399)
Acquisition of intangible assets - 795
Acquisition of property, plant and (1,717) (1,128)
equipment (20,326) (22,901)
Acquisition of subsidiaries (2,484) 16,621
Interest received 41 226
------------------------------------------------ ---------- --------------
Net cash used in investing activities (27,129) (13,786)
Cash flows from financing activities
Proceeds from the issue of share capital 441 1,003
Draw down of loan - 30,952
Purchase of own shares for LTIP (1,106) -
Repayment of borrowings (4,635) (5,527)
------------------------------------------------ ---------- --------------
Net cash from financing activities (5,300) 26,428
Net (decrease) / increase in cash and
cash equivalents (57,589) 8,802
Effect of exchange rate fluctuation 265 1,508
Cash and cash equivalents at the start
of the period 76,572 66,262
------------------------------------------------ ---------- --------------
Cash and cash equivalents at the end
of the period 19,248 76,572
------------------------------------------------ ---------- --------------
Notes to the condensed consolidated financial statements
1. The financial information set out above does not constitute the company's statutory accounts for the years ended 30 April 2014 or 2013 but is derived from those accounts. Statutory accounts for 2013 have been delivered to the registrar of companies, and those for 2014 will be delivered in due course. The auditors have reported on those accounts; their reports were (i) unqualified, (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.
2. Segment Reporting
The Group determines and presents operating segments based on the information that is provided internally to the Board of Directors, which is the Group's chief operating decision maker. The Group is organized into two operating divisions which offer different services to different industries and are managed separately: the Technology business and the Pure business. The costs of the corporate head office and other costs which are not controlled by the operating divisions are allocated to these divisions. These divisions are the operating segments that are reported to the chief operating decision maker and are the Group's reportable segments. There is no inter-segment trading and no significant seasonality in the Group's operations although there is an increase in trading in the period leading up to Christmas.
Principal activities are as follows:
Technology business - the development of graphics, video, vision, processor, communications and connectivity technologies for licensing to semiconductor companies for incorporation into silicon devices.
Pure business - the development and marketing of consumer products to showcase the technologies of the Technology business and to develop new and emerging markets for such technologies.
Information regarding the operations of each reportable segment is included below. Performance is measured based on adjusted operating profit as shown in the table at the end of this note. Operating costs within the Technology business are not attributable to specific income streams and have not been allocated to specific income streams.
2014 2013
GBP'000 GBP'000
----------------------------------- --------- ---------
Revenue
Technology business
Licensing 38,324 29,112
Royalties 109,033 95,051
Other 241 1,553
----------------------------------- --------- ---------
Total 147,598 125,716
Pure business 23,237 25,751
----------------------------------- --------- ---------
Operating profit / (loss) 170,835 151,467
8,617 18,857
Technology business (8,596) (7,572)
Pure business
----------------------------------- --------- ---------
Segment operating profit 21 11,285
Net financing (expense) / income (335) 875
----------------------------------- --------- ---------
(Loss) / profit before tax (314) 12,160
Taxation credit / (charge) 1,089 (5,884)
----------------------------------- --------- ---------
Profit for the financial year 775 6,276
----------------------------------- --------- ---------
2014 2013
GBP'000 GBP'000
------------------------------------------------------ -------- ---------
Total assets
Technology business 251,888 239,796
Pure business 16,311 10,923
------------------------------------------------------ -------- ---------
Total segment assets 268,199 250,719
Cash and cash equivalents 19,248 76,572
Deferred tax 4,928 10,446
Unallocated assets 1,034 991
------------------------------------------------------ -------- ---------
Total assets 293,409 338,728
Total liabilities
Technology business 82,352 143,076
Pure business 6,056 4,260
------------------------------------------------------ -------- ---------
Total segment liabilities 88,408 147,336
Unallocated liabilities - -
------------------------------------------------------ -------- ---------
Total liabilities 88,408 147,336
Other segment items
Capital expenditure
Technology business 18,591 21,787
Pure business 5,724 1,451
----------------------------------------------------- -------- ---------
24,315 23,238
Depreciation and amortization Technology business 14,018 8,057
Pure business 374 317
----------------------------------------------------- -------- ---------
14,392 8,374
Revenue is reported by geographical area of sales as follows:
2014 2013
GBP'000 GBP'000
------------------------ -------- --------
USA 94,218 85,189
Asia 40,359 32,518
United Kingdom 17,230 21,812
Rest of Europe 11,289 9,319
Rest of the world 4,611 1,218
Rest of North America 3,128 1,411
------------------------ -------- --------
170,835 151,467
------------------------ -------- --------
The basis for attributing external customers to individual countries is the customer's country of domicile.
Revenue from the largest customer of the Group in the year, which is included in revenue for the Technology division, represents approximately GBP52,503,000 of the Group's total revenues. No other individual customer represents over 10% of the Group's revenue.
All revenue originated materially from the United Kingdom.
The operating profit, net assets and capital expenditure of the Group materially relate to the United Kingdom.
Adjusted profit
Adjusted profit is used by management to measure the performance of the business year on year by excluding non-recurring items (items which typically do not occur every year), items relating to acquisitions and investments, non-cash based share incentive charges and amortization of intangible assets acquired from acquisitions.
Year to 30 April 2014 Year to 30 April 2013
Technology Pure Total Technology Pure Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
--------------------------------------- ----------------- --------- --------- ---------- -------- ----------
Reported operating profit
/ (loss) 8,617 (8,596) 21 18,857 (7,572) 11,285
Share-based incentive costs 12,401 778 13,179 10,190 1,126 11,316
Net gain on investments (348) - (348) (1,763) - (1,763)
Impairment of investments 2,585 - 2,585 5,679 - 5,679
Amortization of intangibles
from acquisitions 8,607 - 8,607 4,207 - 4,207
Acquisition related costs 1,275 - 1,275 2,744 - 2,744
Contingent acquisition consideration
release (1,648) - (1,648) - - -
Group restructuring costs - 397 397 - - -
-------------------------------------------------- ---------- --------- --------- ---------- -------- ----------
Adjusted operating profit
/ (loss) 31,489 (7,421) 24,068 39,914 (6,446) 33,468
Net financing (expense) /
income (335) 875
-------------------------------------------------- ---------- --------- --------- ---------- -------- ----------
Adjusted profit before tax 23,733 34,343
-------------------------------------------------- ---------- --------- --------- ---------- -------- ----------
3. Taxation
There was a net tax credit in the period of GBP1,089,000 (2013: net tax charge GBP5,884,000).
The tax credit comprises:
-- UK corporation tax charge of GBP81,000 (2013: GBP1,088,000) on profits for the period. This charge is offset by excess taxable deductions on the exercise of shares, the credit for which has been taken to reserves
-- a current tax charge on overseas revenues not recoverable in the year of GBP2,531,000 (2013: GBP1,430,000).
-- a current tax credit on overseas profits of GBP2,020,000 largely a result of an over provision in the 2013 accounts relating to MIPS (2013: GBP1,167,000)
-- a deferred tax charge of GBP2,005,000 relating to the utilisation of a deferred tax asset previously recognised in respect of historical tax losses, and the effect of changes in tax rates (2013: GBP5,885,000)
-- a deferred tax credit of GBP3,686,000 relating to the release of the deferred tax liability created on acquisitions of subsidiaries and the effect of changes in tax rates (2013: GBP1,352,000)
4. Earnings per share
2014 2013
GBP'000 GBP'000
----------------------------------------- -------- --------
Profit attributable to equity holders of
the parent 775 6,276
2014 2013
Shares Shares
'000 '000
--------------------------------------------------- ------------- -------------
Weighted average number of shares in issue 266,246 264,903
Less: Weighted average number of shares
held by Employee Benefit Trust (1,902) (2,896)
Effect of dilutive shares: Employee incentive
schemes 11,553 12,925
--------------------------------------------------- ------------- -------------
Weighted average number of shares potentially
in issue 275,897 274,932
2014 2013
--------------------------------------------------- ------------- -------------
Earnings per share Basic 0.3p 2.4p
Diluted 0.3p 2.3p
Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue to assume conversion of all potential dilutive ordinary shares.
Adjusted earnings per share
2014 2013
GBP'000 GBP'000
----------------------------------------------- --------- ---------
Adjusted profit before tax - (see note 2) 23,733 34,343
Adjusted taxation charge (2,431) (9,689)
----------------------------------------------- --------- ---------
Adjusted profit attributable to equity holders
of the parent 21,302 24,654
2014 2013
Shares Shares
'000 '000
--------------------------------------------------- ------------- -------------
Weighted average number of shares in issue 266,246 264,903
Less: Weighted average number of shares
held by Employee Benefit Trust (1,902) (2,896)
Effect of dilutive shares: Employee incentive
schemes 11,553 12,925
--------------------------------------------------- ------------- -------------
Weighted average number of shares potentially
in issue 275,897 274,932
2014 2013
--------------------------------------------------- ------------- -------------
Adjusted earnings per Basic 8.1p 9.4p
share Diluted 7.7p 9.0p
Adjusted earnings per share is calculated using adjusted profit attributable to equity holders of the parent which is derived from the adjusted profit before tax described in note 2.
5. The Group's full Report & Financial Statements will be made available to shareholders by 22 August 2014. Additional copies will be available from the Company's registered office, Imagination House, Home Park Estate, Kings Langley, Hertfordshire WD4 8LZ.
6. The Annual General Meeting of Imagination Technologies Group plc will be held at Imagination House, Home Park Estate, Kings Langley, Hertfordshire WD4 8LZ at 11.00am on 19 September 2014.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR SELSILFLSEEM
1 Year Imagination Technologies Chart |
1 Month Imagination Technologies Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
