https://imagination-technologies-cloudfront-assets.s3.amazonaws.com/presentations/15122015/FY16%20Half%20Year%20Results%20December%202015%20FINAL%20v2%2015dec2015.pdf
https://imgtec.com/news/press-release/half-year-results-statement-2015/
Imagination Technologies Group plc (LSE: IMG, “Imagination”, “the Group”), a leading multimedia, processor and communications technology company, today announces results for the six months ended 31 October 2015.
Overview
- Short-term royalty revenues impacted by slowdown in semiconductor and smartphone markets, and ramp-down of customer’s legacy chip as previously reported
- Medium-term outlook on royalty revenue substantially strengthened through new multi-year multi-core license agreement for PowerVR graphics
- Further significant design-wins achieved in key markets for mobile, automotive and TV
- The above new license agreement and design-wins are expected to result in additional multiple 100m’s of unit shipments in FY18 and beyond
- Licensing closure timing and recognition rate in H1 does not reflect the strong pipeline and substantial growth in backlog
- Operating costs tightly managed resulting in significantly lower rate of cost growth than previously guided, while maintaining the necessary investment in key areas
- The Board currently expects adjusted operating profit for the financial year to 30 April 2016 to be below previous expectations
Financial highlights
- Group revenues of £71.1m (2014: £82.2m)
- Technology revenues of £62.7m (2014: £72.8m)
- Licensing revenues of £12.6m (2014: £16.0m)
- £3.0m deals closed 24hr outside half-year window (resulting in £1.5m of recognised revenues moving from H1 to H2)
- Royalty revenues of £49.8m (2014: £56.3m)
- Adjusted operating loss* of £7.3m (2014: profit £5.0m); reported operating loss of £20.8m (2014: £10.3m)
- Adjusted loss per share* 2.6p (2014: earnings 1.3p); reported loss per share 7.7p (2014: earnings 3.9p)
Business highlights
- Strong licensing pipeline and backlog
- 42 licenses signed (2014: 49) with over 22 existing and new partners
- Backlog of booked (but not recognised) orders up 50% over the same time last year
- Further increase in new committed SoCs with over 28 additional SoC design-wins which will contribute to future royalties
- New strategic multi-year agreement with tier-one mobile market partner
- Penetration of significant automotive market for both PowerVR and MIPS continues to develop strongly with multiple partners
- PowerVR deployed in all key over-the-top TV platforms
- Strong platform offering for emerging IoT opportunities
- Pure loss further reduced following the actions taken last year
Outlook
- The high backlog level and both the size and quality of the sales pipeline support H2 licensing revenue increasing from H1 and also being higher than H2 FY15
- Unit shipments are expected to recover in H2, although it remains difficult to provide precise guidance given dependence on timing of semiconductor industry recovery
- Careful direction of our investments will result in underlying operating cost growth of around 2%, significantly reduced from previously expected 5%-10%, resulting in a c.£5m reduction against our original plan for the financial year
Hossein Yassaie
, Chief Executive, commented:
“Although our financial performance in the first half has been disappointing, reflecting a short-term slow-down in the overall semiconductor industry and softness in the mobile market, the fundamental medium-term demand drivers remain strong.
“Imagination has significantly strengthened its position in several key markets and in particular in mobile, automotive and TV/STB segments. The strategic license agreements secured with key players in these segments provide the backbone for significant acceleration in unit shipments with multiple 100’s of million unit growth over the next 2-3 years.
“With growing revenues driven by the strong design-win base already established, continued demand for our existing and new technologies and ongoing discipline on operating costs mean that the operating margin is expected to significantly improve in the medium-term.”
