LONDON (Alliance News) - Imagination Technologies Group PLC on Thursday said it will divest or shut down non-core and/or cash consuming units as well as further reducing overheads, as part of a plan to accelerate its restructuring programme.
This will reduce the multimedia technology company's cost base by an additional GBP12.5 million on a net annualised basis, on top of the GBP15 million reduction in operating costs it had already identified in February when it first announced the restructuring programme. Savings will be delivered in the financial year ending April 2017.
Imagination said the reductions will enable it to reinforce and build on its three core businesses of graphics and multimedia, processing, and connectivity. There are no planned reductions in those areas.
As part of the cost-cutting measures, Imagination expects to reduce the group's headcount globally by 200, on top of the 150 job losses it revealed would occur in February. It is, however, seeking to fill over 50 roles in its multimedia PowerVR business.
Imagination will undertake asset write-downs as well as record a number of contract and tax provisions. The cash cost of the total reduction will be less then GBP5 million, restricted to redundancy payments, and will be funded from existing resources.
Imagination said it has seen "considerable interest" in its consumer electronics business Pure, which it is planning to sell by the end of 2016.
In the current financial year, both royalty and licensing revenue continue to be in line with the board's expectations, it said.
"This swift and decisive action will put us back on a sound financial footing and will enable us to have the necessary resources to further strengthen our three core businesses. They are unaffected by these cuts," Interim Chief Executive Andrew Heath said in a statement.
"The ongoing operational review will identify clearly where we need to focus, building on our current strengths and allocating the right capital to ensure growth and attractive returns," he added.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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