Imagination Technologies Lowers Licence Expectations For Full Year

LONDON (Alliance News) - Imagination Technologies Group PLC Wednesday lowered its expectations for licence revenue growth, saying it now expects to post full-year licence revenue in line with the previous year, with the potential for single digit growth if remaining deals close on time, as licensing activity has been "a little muted" in its second half to date.

In the previous year to end-April 2014, Imagination posted licensing revenue of GBP38.3 million. At the time of its interim results in December the company was targeting 10% growth in licensing revenue.

Imagination Technologies on Wednesday attributed the muted trading to timing rather than "any fundamental change in demand" for its products, and cited a good, growing pipeline.

The company did, however, raise its expectations for growth in shipments of its MIPS embedded microprocessors, now expecting growth of 5% to 10% compared to the previous year. It had previously guided volumes "marginally ahead" of last year. Shipments of non-MIPS units are expected to be in line with its previous guidance, similar to the previous year's level.

Shipments of MIPS units were stronger than expected in the fourth quarter, Imagination said, and Non-MIPS unit shipments increased strongly in the quarter as well.

The company said that changes in its consumer electronics division Pure it made in the last financial year are "starting to deliver improved performance in its core markets", and as a result it expects the business to show a reduced underlying loss for the full year.

It continues to expect underlying operating costs for the year to be up 10% compared to the previous year. The stronger dollar has boosted revenues, although this also hit operating costs, partly offsetting this boost.

"The progress across our three main IP families is a further step forward towards our longer term target of increasing our operating margins to 30-40%," said Chief Executive Hossein Yassaie in a statement.

Imagination Technologies is set to rejoin the FTSE 250 from next Monday.

By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews

Copyright 2015 Alliance News Limited. All Rights Reserved.