Imagination Technologies Group plc (LSE: IMG, “Imagination”, “the Group”), a leading multimedia, processor and communications technology company, notes the recent press coverage.
As stated at the time of the half-year result in December 2015, the Group recognises the challenges it is facing given the current economic backdrop of the industry in which it operates. The Group is already and actively controlling the investments that it is making to minimise Opex growth. Imagination continues to monitor the industry situation and will take further actions as and when necessary.
Pure’s prime focus is now the growing digital radio market and its financial performance is improving rapidly. The Group is reviewing its strategic options for this business.
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This was in response to yesterday's Sunday Times article which stated that in response to institutional shareholder pressue, the chairman and new CFO were going to offload Pure and also enter a sale & leaseback arrangement for the new HQ buildings.
It's been said many times ,over many years, on this blog, and pretty much by everyone else connected with IMG, that Pure needs to go. Note the prime focus of Pure has finally been changed from the 'of strategic importance' and 'pathfinder' to 'now the growing digital radio market'.
It was always the case that removing Ensigma's R&D out of Pure would perhaps make it profitable but that misses the main issue - we are an IP company, not a consumer OEM and if the IP is good enough (ensigma etc) then 'they will come' and you don't need to put product on the shelves yourself. I don't think we'll ever approach the 30-40% margin aims as long as Pure is part of IMG, regardless of how well the rest of the business is doing.
