LONDON (Alliance News) - Imagination Technologies Group PLC Tuesday expressed confidence in delivering continued progress and said it expects to see "significant expansion in operating margins in the medium-term", as it posted a widened pretax loss for its recently ended financial year.
The chipmaker, which left the FTSE 250 index last Monday, posted a pretax loss of GBP12.0 million for the year to end-April, widened from a pretax loss of GBP314,000 a year before, as a rise in revenue to GBP177.0 million from GBP170.8 million was offset by higher operating costs, and financial expenses of GBP3.6 million.
Revenue growth was driven by high levels of licensing activity, improved royalty revenue, and higher shipments of its MIPS processor units.
Its consumer products segment, Pure, saw revenue fall to GBP18.4 million from GBP23.2 million, as a result of the company refocusing the division, so it has been trading in a lower number of territories with a tighter product set.
Imagination Technologies said it expects to see licensing revenue in its current financial year in line with its 10% long term growth rate, driven by an increased backlog at the end of its recently ended financial year and a strong sales pipeline.
It believes that the refocusing of its Pure business and momentum in its core markets will drive a rise in revenue in this business, which is expected to reduce the operating loss at Pure.
The company expects a lower increase in adjusted operating costs than in previous years, between 5% to 10%, as it continues to tightly manage its investment.
"As our revenues grow, the natural operational gearing of the business means that the financial performance is expected to significantly benefit from a slower growth in operating costs. We therefore expect to see significant expansion in operating margins in the medium-term," said Chief Executive Hossein Yassaie in a statement.
Shares in Imagination Technologies are trading up 3.3% at 222.49 pence Tuesday morning.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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