Imagination revenues up as sale process continues

July 06, 2017 //By Peter Clarke
Processor intellectual property company Imagination Technologies Group plc has managed to increase its annual revenue despite a troubled last couple of years.

For the year ended April 30, 2017 Imagination made a loss of £27.9 million on sales revenue of £145.2 million. The loss was much reduced from £81.3 million in the previous year while sales were up 19 percent.

Licensing revenue was up by 82 percent to £33.9 million (2016: £18.6 million) and royalty revenue was up 8 percent to £111.1 million (2016: £102.7 million). Net debt at the end of year was £28.4 million down from £40 million six months before and down from £33.0 million a year before.

Imagination said that after receiving interest in buying the whole of the company it had decided to initiate a formal sale process on 22 June 2017 and that preliminary discussions are going on with potential bidders. There have been reports that interest has come from China.

Last month the company offered its MIPS processor and Ensigma wireless IP divisions for sale and these transactions are also progressing. The sale of the divisions, including the sale of the system-on-chip division to UK design house Sondrel, followed the news that Apple, which owns 8 percent of the company, would stop using Imagination’s PowerVR graphics technology for its iPhones and was developing its own GPUs.

This has given rise to a dispute between Imagination and Apple. Imagination has said it does not understand how Apple can develop GPUs without using Imagination intellectual property.

Andrew Heath, CEO said, "Apple's unsubstantiated assertions and the resultant dispute have forced us to change our course, despite the clear progress we have been making. Initially we elected to sell the now much stronger MIPS and Ensigma businesses in order to strengthen our balance sheet and concentrate our resources on PowerVR. Additionally, we have received interest from a number of parties for the whole group – reflecting the real quality and strategic value of our businesses and the associated IP."

www.imgtec.com