Imagination Technologies Group Regulatory News (IMG)

18 Sep 2009 07:00



18 September 2009

Imagination Technologies Group plc

Interim Management Statement

Imagination Technologies Group plc ('Imagination', LSE: IMG), a leading provider of System-on-Chip (SoC) Intellectual Property (IP), is today issuing its Interim Management Statement for the period from 1 May 2009 to 17 September  2009. 

The Group has continued to see important and active interest in its technologies across many partners and markets. For many of our partners, the technologies we offer are of long-term and strategic significance and are increasingly becoming fundamental to their business success. Earlier in the financial year, this led to two of our key partners, Apple and Intel, taking increased shareholdings in the Group. 

To date, we have concluded a number of licensing agreements with both existing and new partners. We have an on-going active dialogue with others prospects on a variety of opportunities which are increasingly diversified across our IP portfolio. Whilst we expect licensing revenue to continue to make progress across the year as a whole, as always it remains difficult to predict the precise timing of the closure of licensing deals, particularly as the decision making process of some companies continues to be influenced by the economic environment.

Taking into account the formal royalty statements received from licensing partners covering the first two months of the financial year, we continue to expect strong volume unit and royalty revenue growth for the year. This results from the continued ramp up of volume of existing products as well as the launch of an increasing number of new end-user products incorporating our IP. The actual rate of increase in volume this financial year will be influenced by consumer spending and our partners' market deployment plans. We remain on track to achieve our target of around 200 million units shipping in the 2010/11 financial year. 

Across the financial year, we also expect to see a progressive increase in the number of licensee products incorporating our latest generation graphics technology, POWERVR SGX, as well as a growing proportion of devices with multiple Imagination IP cores. We also expect to see shipments increase in new markets including TV/Set-Top-Box and Mobile Internet Devices, such as netbooks. 

After the tougher trading environment last year, especially in the first half of the financial year, PURE is making solid progress, with revenue in the first four months significantly ahead of the corresponding period last year. In the UK, PURE has maintained market leadership and strong product ranging at key retailers. 

We are seeing an acceleration in the adoption of digital radio standards overseas and PURE has been active in developing key relationships in support of developing revenues from overseas markets. We expect this to be a fast growing element of PURE's business. This continued progress in overseas markets together with the improved environment in the UK, means that we are expecting a marked improvement in PURE's trading performance for this financial year. 

PURE has maintained its very strong product line up with the launch of several new products including the first bedside connected radio, Siesta Flow, a second generation Chronos iDock, and the first fully iPhone-ready micro system, Sirocco 150. Of particular note is the launch yesterday of the ground breaking PURE Sensia which in addition to DAB offers an advanced intuitive touch screen user interface, internet connectivity and new capabilities such as social networking applications, photoframe functionality and on-line information services. As a result, we believe PURE is well positioned for the important Christmas season.

Based on an active licensing pipeline, the expected chip volume and royalty revenue growth, plus PURE's strong product line-up and the emerging overseas opportunity, the Group remains well on track for further good growth. Whilst the macro economic volatility and its influence on consumer spending could have some impact in the short term on the rate of our development, the Board remains confident that the Group's solid progress will continue in line with its expectations. 

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