LONDON (Alliance News) - Imagination Technologies Group PLC on Monday detailed restructuring plans, including the sale of its consumer electronics business Pure, as it said Chief Executive Hossein Yassaie has stepped down with immediate effect.
Additionally, the chip designer said that it now expects to report a loss before interest and tax for its full year to end-April, as conditions in the semiconductor sector have "not improved" since its last update in December.
Non-Executive Director Andrew Heath has been appointed interim chief executive, and the company said it will start a search for a new chief executive immediately.
The company said that since it reported its first-half results in December, market conditions have not improved, and the slowdown in the semiconductor sector has continued, compounded by uncertainty over future trading prospects in China.
Royalty revenue from some key customers has fallen short of previous expectations, Imagination Technologies said, and whilst its licence pipeline remains strong, deals are closing more slowly than it had previously expected. As a result, it now expects a "material reduction" in revenue for its current financial year and resulting profitability.
Imagination Technologies plans to undertake a number of restructuring and cost cutting measures in its business, which it hopes will reduce its total operating costs by GBP15 million in the year to end-April 2017. The company said that it will treat the Pure division as a discontinued operation with immediate effect, and said it believes there are "potentially more appropriate owners" for the business.
The company plans to initiate a "full operational review" including all of its research and development expenditure.
"Trading conditions continue to be very demanding. We need to be very focussed on continuing to meet our customers' needs, and commercialising our IP, cost effectively, based on our core business," said Chairman Bert Nordberg in a statement.
"The measures announced today will allow the business to maintain the necessary investment in key areas, in order to further strengthen our unique IP, technologies and system solutions. They will also set the group on track to deliver attractive returns in the coming years," Norberg added.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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