IMG

IMG

Wednesday, 22 June 2011

Killer results from Imagination - 1 billion chips here we come!

IMG released FY results this morning.
HY surprised many by announcing a new ambitious target of around 1 billion chips/year within 5 years. It was expected he would announce a 500m chip target, but obviously IMG are in a very confident mood.
ASP came out at 27c/chip (13% lower) with royalty volume up 94%(!) at 245m chips. Licensing was also very strong at £28.5m (up 24%). I think it's fair to say the only major semi target remaining for IMG is Qualcomm.
Well done HY et al.
Summary:

Adjusted pre-tax profit surges 80% to £24.0m; driven by 94% chip unit volume growth to 245m and licensing up 24% Imagination Technologies Group plc (LSE: IMG, “Imagination”, “the Group”), a leading multimedia, communications and embedded processor technology company, today announces results for the 12 months to 30 April 2011.
Imagination Technologies Group plc (LSE: IMG, “Imagination”, “the Group”), a leading multimedia, communications and embedded processor technology company, today announces results for the 12 months to 30 April 2011.
Financial highlights
  • Group revenue up 21% to £98.0m (2010: £80.9m)
    • Technology revenues increased 47% to £69.8m (2010: £47.3m)
      • Royalty revenue up 69%; very strong momentum
      • Licensing revenue up 24%; reflects high activity level
    • PURE revenues £28.2m (2010: £33.6m)
  • Technology - adjusted operating profit* up 97% to £26.7m (2010: £13.6m)
  • Adjusted Group pre-tax profit* up 80% to £24.0m (2010: £13.3m)
  • Group pre-tax profit £16.4m (2010: £10.2m)
  • Adjusted earnings per share* up 48% to 10.8p (2010: 7.3p)
  • Reported earnings per share 7.7p (2010: 6.0p)
  • Strong cash generation from operations of £19.1m (2010: £8.6m), cash balance increased to £49.4m at 30 April 2011 (2010: £29.4m)

Business highlights

Technology business

Royalties and design wins
  • Partner chips shipped almost doubled to 245m units (2010: 126m) – new target of 1 billion units per annum in five years
  • Significant volume shipments in mobile phone, TV/STB, personal computing/tablets, digital radio & automotive markets
  • 115 active partner chip designs (2010: 91); 48 in production (2010: 37)
Licensing
  • Strong licensing activities
    • Addition of several new key partners including ST-Ericsson, ST Microelectronics, Fujitsu, LG, NetLogic & SiS
    • Many new and extended agreements with existing partners
  • 20+ important agreements involving 35+ silicon IP cores
  • Across all markets - mobile phone, digital TV/STB (set top boxes)/thin-clients, Personal Media Player (PMP), mobile computing/tablets/netbooks and in-car navigation/dashboard
  • For graphics, video, broadcast/connectivity and processor silicon IP cores and HelloSoft VoIP technologies
    • First tier-one licensee for ENSIGMA UCC technology
  • Significantly increased and active pipeline of prospects across all IP families
Acquisitions
  • Two strategic acquisitions completed in the second half of the year in connectivity/V.VoIP and graphics areas to contribute to Group’s next phase of development

    PURE business

    • Tight economic environment and cautious retailers particularly impacted UK revenues
    • Good revenue increase from new & growing international markets with a 75% year on year increase for the second half
      • Continued strategic development and path finding role
      • Focus on digital broadcast, connected devices and Cloud solutions
    • Expect improvement in 2011/12 driven by the growing export business and new products
      • DAB+ roll-out in Germany set for 1 August 2011
      • Cloud offering strengthening with time and driving connected product adoption
Hossein Yassaie, Chief Executive, commented:
"The almost doubling of the annual unit shipment of devices using our technologies, and strong licensing activities, have again resulted in a substantial jump in full-year revenues and profits.
"Our technologies, instrumental in many of the key market trends, continue to gain ground and are powering many market-driving and iconic end-user products.
"With well over 500m devices across numerous categories having shipped to date, approximately half of this volume during the last financial year alone, we now see a revised target of around one billion units for the annual run-rate for our partners’ chips as a reasonable goal within five years.
"Despite the current slow-down in consumer spending PURE continues effectively to showcase and drive key technologies. We expect to see an improvement in this division over the medium term, particularly in international markets.
"Whilst acknowledging the on-going challenges to the global economy, we are increasingly confident of our continued good progress in the current financial year and beyond given the very active, growing pipeline of licensing prospects, the growth in design wins and the momentum in our chip volume, together with PURE’s leading position and product portfolio."
Click here to view the full financial results
END

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