Lossy Imagination says there’s good signs in graphics
Imagination Technologies Group plc (Kings Langley, England) has told analysts that it has made a market share gain for its graphics processor intellectual property in mid-tier mobile phones and continues to be the market leader at the high-end. However, that did not prevent the troubled company from reporting financial losses for its financial year ended April 30, 2016.
The company reported a retained loss of £80.9 million on revenue of £120.0 million. This compares with a retained loss of £13.0 million on revenue of £156.8 million in the previous year. Licensing revenue from continuing operations more than halved to £17.1 million from £37.8 million in the previous year. Royalties from continuing operations also declined to £102.7 million from £118.4 million in the year before.
Net debt at the year-end was £33.0 million compared with £27.2 million a year before.
The loss was expected as the company announced a restructuring of the company in February 2016 to focus on the licensing of its PowerVR, MIPS and Ensigma intellectual property and plans to sell its Pure digital radio business (see Imagination’s CEO steps down). Apple, a key customers that holds a stake in the company of about 8 percent, entered into discussions about acquiring Imagination although subsequently ruled the move out (Apple has no plans to buy Imagination).
PowerVR in mobile. Source: Imagination, McKinsey, Strategy Analytics.
Even though revenue fell faster year-on-year for Imagination’s PowerVR business – from £111.2 million to £87.9 million – than in other IP business units, the company is claiming there is now an improving situation at least in a subset of the market. The company said it had made a market share gain in the quickest-growing mid-tier of mobile phones through its 8XE cores. It also said it has clear market leadership in high-end phones with its series 8XT cores and that it planned to retain that leadership position while making gains in other applications such as automotive and STB/DTV.
The sale of the Pure digital radio business is on course ad attracting “considerable interest,” the company said.
“We have now taken the necessary action to put Imagination back onto a sound financial footing,” said CEO Andrew Heath, in a statement. “We will increase investment in PowerVR, which reported significant profits, building on our leading position and exploiting new markets. We will focus MIPS and Ensigma where we have, or can build, differentiated, defendable positions. We will also look to improve the prospects for both business units through partnership arrangements aimed at building the necessary ecosystems and reaching scale more quickly.”
Heath also claimed that Imagination has maintained “strong positions with leading customers.”
Related links and articles:
News articles:
Apple has no plans to buy Imagination
Imagination finds VR customer for ray tracing
Russian video chip firm switches from ARM to MIPS
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