Imagination Technologies warns on profits

Micro chip maker Imagination Technologies warned that profits would fall below expectations after delays to several deals hit licensing revenue for the full year. The company said that as a result of short-term delays to several agreements, licensing revenue would reach £27m for the year to end-April, a fall of 22% on the previous year's £34.4m, which would obviously hit profits. Imagination, a key supplier for Apple's iPhones and iPads, noted that despite an active pipeline of licensing engagements, the closure timing of a number of deals had been subject to higher levels of uncertainty because of "structural and organisational changes among a number of semiconductor partners in various regions". The group said it was "confident this timing issue is a short term phenomenon related to the 'lumpy' nature of licensing revenues" and that in recent months it had "witnessed increased engagement activities and a growing pipeline of opportunities across all our key IP offerings". Chief Executive Hossein Yassaie said: "Whilst we continue to see strong demand for our technologies, we are disappointed that the licensing revenues are below our expectations in this period. "Despite these short-term timing issues, we continue to see growing partner engagements across our key technologies - these include a number of very significant, strategic deals." "The volume shipment ramp-up continues apace towards our target of 1.0bn units in 2016 - excluding MIPS - whilst the licensing pipeline remains as active, strong and sound as ever."For the full year 2013 the group said it expected unit shipment growth to continue to be very strong, with annual shipments in excess of 500m units, driving significant year on year royalty revenue growth. For full year 2014 Imagination said it currently expected licensing revenue to be in the range of £30m-£35m excluding those from acquisition MIPS.OH