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The share price of Imagination Technologies (LSE:IMG) has gained 17.21 pence, an increase of 7.37%, as at 2:45 pm today. Shares are currently trading at 250.71, well above the stock’s 50, 100, and 200 day moving average. Investors received news this morning that full-year company revenues as of 30 April 2014 were up by 13% to £170.7 million, achieve partially as a result of a 32% increase in licensing and 15% increase in royalty revenues.
Imagination Technologies is a global leader in multimedia, processor, communication and cloud technologies. It 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.
The only black eye in the report was that profits and their ancillary metrics were lower than the previous year. However, those numbers were not unexpected. There are some naysayers out there this morning on the discussion boards, one of which said, “Perhaps, if they post a loss in the future, we could look forward to further gains.” Serious investors should avoid these morons like the plague.
CEO Hossein Yassaie’s comments were sage: “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 validates the strength of our strategy and the relevance of our road maps.
“All the indications from existing and new customers are that the alternative that MIPS processors offer is credible, respected and welcome . . . [and] are clear indications of our real and continued progress. 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-centered IP platforms they are enabling, will allow us to take advantage of the numerous growth opportunities ahead”
If you read this column regularly, you know that I almost invariably hesitate to predict the future, and I am not really about to do that here. But you will notice that I highlighted several phrases in the preceding paragraphs. I did so because these are some of the areas in which companies with technological intellectual property are going to have an exceptional opportunity to excel whilst others will quickly be left behind.
So, although I am not predicting future success – there are just too many other factors to consider – I am saying that IMG may be worthy of in-depth, objective scrutiny, more in terms of their preparedness for things to come than on their current or past successes. And, most certainly, no amount of charts and graphs can predict what key IP that addresses the highlighted items could propel IMG to unparalleled success.
