25th May 2005 07:01
Imagination Technologies Group PLC25 May 2005 Imagination Technologies Group plc ("Imagination") Results for the twelve months to 31 March 2005 Imagination Technologies Group plc, leading provider of System-on-ChipIntellectual Property (IP), today announces results for the twelve months to 31March 2005 Business Update • Licensing - Imagination's IP is increasingly central to partners' roadmaps o 8 partnership agreements concluded in the year • 4 in mobile phone graphics/multimedia, 3 in TV, and 1 in mobile TV o Extensive partnerships include 6 of the top ten semiconductor companies • Multi-core and family licenses with Intel, TI and Renesas • Graphics IP licenses with Samsung, Freescale, and Philips • Expanding platform IP licensing partnerships with Sharp and Frontier Silicon o Since year end concluded new licensing partnership with Intel for new generation graphics and video processing IP family • Royalties - 28 partner chips in development/production, up 40% o 7 devices in production, 10 in prototype, 11 in pre-silicon development o Solid base for future royalty growth o 2.5 million partners' chips shipped in the year o First mobile devices from Intel and Renesas started shipping • End user products include NTT DoCoMo handsets from Fujitsu and Mitsubishi and Dell PDA • Many further handsets from several top OEMs in the pipe o TI, Philips and Samsung demonstrating and sampling customers with mobile phone chips o 70% market share of DAB digital radio market - 80+ end user products shipping including Sony, Sharp and Philips o End-user set-top-box (STB) products using our IP now shipping and we expect digital TV devices to ship by leading manufacturer during first-half 2005/6. o Renesas car navigation chip leading the market • After-market products from Mitsubishi and Pioneer shipping • Expect top-brand cars to ship with factory-fit systems shortly• PURE Digital - maintains leadership position in the DAB market Financials • Group revenue similar to last year's at £30.6m reflecting timing of licensing closure and impact of exchange rates o Technology revenue of £14.1m - underlying growth of 9% o Royalty revenues increase to £1.3m (2004: £0.9m); second half growth of 70% compared to first half o PURE Digital retains market-leading position for DAB radios • Second half revenue up nearly 50% compared to first half reflecting good Christmas sales• Gross profit increased to £17.6 m (2004: £17.1m), margins up to 58% (2004: 55%)• Continued investment with £19.2m spend in R&D and capex of £2.5m• Loss after tax, excluding goodwill amortisation, of £5.5m (2004: £2.2m)• Cash reserves of £7.7m (2004: £6.5m) Geoff Shingles, Chairman, commented: "Despite some timing uncertainly in deal closure and in partners' chip volumeramp-up, this year we made significant progress in securing further key partnersand establishing the basis for substantial future market share. As a result wenow have much broader and deeper relationships with many of the top playersincluding Intel, TI, Renesas, Sharp and others, where our technology has becomea critical component of their products and roadmaps. In addition to digitalradio and in-car systems, end-user products including those from Fujitsu,Mitsubishi and Dell have begun shipping in mobile phone/PDA markets. We aresupplying IP cores that will be used in the highest volume future consumerelectronics products. These trends will continue and accelerate in the comingmonths increasingly demonstrating our migration to being a major player in thesilicon IP business." 25 May 2005 Enquiries:Imagination Technologies Group plc Tel (today): 020 7457 2020Geoff Shingles, Chairman Tel (thereafter): 01923 260 511Hossein Yassaie, CEOTrevor Selby, CFO College Hill Tel: 020 7457 2020Nick Elwes/Adrian Duffield Operational and Financial Review Overview We have continued to make significant and strategic progress in many of the keyareas of our activities, particularly in mobile phone, digital radio/audio, TVand mobile TV segments, during the financial year ending 31 March 2005. Althoughwe have suffered from some delays on license closure, the year has seen thecontinued adoption and licensing of our key technologies by many of the topplayers and industry leaders including Intel, TI, Freescale, Sharp and FrontierSilicon. We have also witnessed, though later than expected, the initial volumeramp-up of further partner devices particularly in the mobile phone /PDA space(e.g. Fujitsu and Mitsubishi NTT DoCoMo handsets in Japan, and a Dell PDA),during the latter months of the year. The quality of committed partners, the strength of engagements, the marketposition secured and the rapidly growing end-equipment design wins are a strongtestimony to the world-class nature and competitiveness of our offerings and asolid foundation for our future growth. PURE Digital has continued to lead theDAB market with innovative and market-driving products while this market hasbeen transitioning to mainstream. We have maintained a strong R&D focus so that we are able to address key markettrends, service our growing world-class partner base, and deliver anindustry-leading technology roadmap. Financial Review In the year ended 31 March 2005, group revenues were £30.6m, a small decrease onlast year (2004: £31.2m). This total comprised technology revenues of £14.1m(2004: £14.0m) and systems revenues of £16.5m (2004: £17.2m). Overall technology revenues were similar to last year primarily due to timingdelays in the closure of licensing business as well as the adverse impact of thedollar exchange rate. After adjusting for exchange rate movements there wasunderlying revenue growth of 9%. Within technology revenues, royalty revenuesfor the year increased to £1.3m (2004: £0.9m) based on the shipment of2.5million chips incorporating our technology. The second half showed royaltyrevenue growth of over 70% compared to the first half. We expect this trend toaccelerate now as an increasing number of chips are coming to market. Second half revenues for PURE Digital were nearly 50% up on the first half andincreased to £9.8m, based on a strong Christmas period and the launch of abroader range of products. However the tighter market conditions in the firsthalf meant that revenue for the year as a whole was slightly lower than lastyear. Gross profit for the year was £17.6m representing a 58% margin on revenues.These show an increase on the corresponding figures for last year of £17.1m and55%, primarily due to stronger margins on systems revenues resulting from a morefavourable exchange rate on product purchases. Research and development expenses increased by 20% to £19.2m (2004: £16.1m).This higher investment is critical to ensure that our IP development programmesstay on track and that we are able to support our growing customer base. Salesand administrative costs excluding goodwill amortisation of £4.9m (2004: £4.1m)included a bad debt reserve of £0.4m in respect of a smaller licensee. Excludingthis one off cost, sales and administrative costs were 11% higher. The loss after tax, excluding goodwill amortisation, was £5.5m which compares toa loss of £2.2m for last year, reflecting this year's increased investment inresearch and development. After goodwill amortisation, the post tax loss was£6.5m (2004: £3.3m). We again benefited from a Research and Development taxcredit in the year of £1.1m (2004: £0.8m) which when netted off against taxincurred on overseas earnings resulted in a tax credit of £0.8m (2004: £0.6m)for the year. The cash spend of £2.5m on capital included £0.8m in respect of a newengineering facility. In the second half, there was a marked decrease in workingcapital and as a result cash resources at March'05 of £7.7m (March'04: £6.5m)were marginally ahead of the balance at September'04. There was an operatingcash outflow of £5.5m (2004: £3.1m) in the year. The placing of 8.5m shares in June 2004 raised a net amount of £7.0m in order toprovide additional working capital and, importantly, demonstrate a strengthenedfinancial position to existing and prospective partners. Business Update Overview Technology Business Update Licensing Progress Update For the year to 31 March 2005 we concluded eight new licensing agreements withfour in the mobile segment, three in TV/Consumer and one in mobile TV. Of thesethree were concluded in the first half and five during the second half. Many ofthese agreements are of very significant strategic importance given the partnersand markets involved, and include:- • Freescale (formerly the semiconductor arm of Motorola Inc.) for PowerVR mobile graphics through ARM;• Texas Instruments' major licence upgrade to a PowerVR MBX family licence which now extends to the PowerVR MBX Lite core and will bring our entry-level PowerVR technology to high volume segments of the mobile handset market;• Intel which has very recently extended its agreement for PowerVR MBX and related IP to a family licence which enables wider deployment;• Frontier Silicon, which has licensed our mobile TV IP platform as a lead partner;• Sharp's major license upgrade across many IP cores as the partnership widens and deepens. Additionally since the year-end we have concluded an important agreement withIntel involving our new generation graphics and video technology codenamedEurasia and certain video codec IP. We continue to have a very active pipeline of negotiations and opportunities inall our key markets, with a number of these at an advanced stage, which weexpect to close in the current financial year. Specifically we see strongpotential in the following areas:- • PowerVR mobile graphics/video (MBX family and related cores) - among the potential agreements at an advanced stage are ongoing negotiations with a number of parties including another two top-ten semiconductor companies. Conclusion of the latter two agreements would bring the number of top ten semiconductor companies licensing Imagination's technology to eight;• A new family of next generation graphics/video technology (codenamed Eurasia), where we have already secured the number one semiconductor supplier, Intel, as a lead partner. We see real and significant interest in this new technology from many of our existing partners and expect to secure others in the near future;• For our Ensigma communication and Metagence processor technologies we see Mobile TV and TV segments being the key drivers and we are having significant discussions with partners in these segments. The mobile TV market is becoming increasingly important as the cellphone market embraces this new technology. Our unique multi-standard capability offers significant benefits over the competition and is attracting serious interest from many parties. With this in mind we expect to secure further significant penetration in themobile phone, mobile TV and TV segments as well as new market areas. We arepleased that during the second half we have made such strong strategic progressin our licensing partnerships, but naturally there is some disappointment thatthe timing of the closure of some of the deals has meant that the overall valueof the licensing business closed in the second half has been impacted. Royalty Progress Update - Partner SoCs Across mobile phone, TV, mobile TV, digital radio/audio, car navigation, andamusement market segments, we now have a total of 28 partner SoCs committed, upfrom 20 at the beginning of the financial year. Of these seven are now inproduction and shipping. Specifically the number of shipping devices at thebeginning of financial year 2004/5 was three rising to five during the earlypart of the second half. The final two devices have only just entered intoproduction and should begin to contribute to royalty generation from the firsthalf FY2005. The target markets for the 28 committed partner SoCs are, 14 in mobile phone/PDA, six in STB and TV, two in digital radio, two for car navigation, two inamusement and one for mobile TV segments. These devices constitute a verystrong basis for growing future royalty revenue as volume ramps up and moredevices enter into production. We expect the number of shipping devices toincrease from seven to around 12 by the end of 2005/6 with particular increasein mobile and TV focussed devices. We have maintained the growth trend and our market share in DAB. Additionally,despite some delays in the launch of handsets based on our IP and based only ona small number of shipping devices, we saw significant shipment during the lastthree months of the year in this segment from our lead partners. As a result thetotal number of partner chips exceeded 2.5m units, more than doubling theprevious year's figure. We expect an exponential growth in volume as more and more of our partners'products are released to manufacturing and also as the volume for each ramps upover time. PURE Digital Update During last year, PURE Digital maintained its leadership of the DAB marketthrough delivering feature-rich advanced products such as: the Bug - the firstpause/rewind/record DAB radio; Legato - a CD and MP3 integrated DAB system; andSONUS-1XT - with advanced voice feedback. These products, which push boundarieswith new features such as EPG, and mainstream products like the refreshedEVOKE-1XT and the lower cost Elan range, have significantly helped to drivemarket growth. We recently announced that PURE Digital had exceeded the500,000-unit shipment milestone for digital radios. PURE Digital's revenues showed strong progress during the second half, driven bya good Christmas and the launch of a broader range of products. Overall PUREDigital product margins for the year have improved but revenues for the yearwere slightly down compared to last year due to a slower first half and theexpected increased competition from lower-end products. We expect PURE Digitalto continue its steady progress and its leadership in the DAB market as thissegment continues to grow. PURE Digital has plans to launch other strategicproducts in support of Imagination's IP. Market Segment Update We have very strong, industry-leading IP offerings in a number of key marketsegments and in particular in mobile phone/PDA, digital radio, TV, Mobile TV,and car navigation markets. Year-to-date we have been able to make significantprogress in many of these areas and in particular:- Mobile Phone and PDA's The mobile market transition for both device and network capabilities are wellunderway. The device capabilities that are very relevant to our PowerVRtechnology are graphics, video and display. These capabilities will increasinglybecome essential requirements for all but the most basic handsets. The marketcan in general terms be segmented into three categories, namely, basic phones,mainstream feature phones (including camera phones) and Smartphones/PDAs(includes multimedia rich phones for entertainment). We expect the products with hardware graphics and video to be implemented firstin Smartphones/PDAs (including dedicated entertainment/gaming handsets) handsetsand to propagate over time into a growing share of feature phone segment aswell. The total mobile market in 2004 was over 660m units with Smartphones/PDAsdevices accounting for around 10%. The overall market is expected to reach 900million by 2008 with over 55% of this total comprising the two segments of theSmartphone/PDAs and the feature phone forming a legitimate target for variouslevels of hardware graphics and video acceleration. In support of theseestimates, Nokia, the largest mobile phone manufacturer, recently revealed atthe E3 (Electronic Entertainment Expo in US) plans for their advanced multimediaand gaming platform and announced that they expect the 2008 Smartphone marketalone to be 250m units. The power consumption constraints and advanced featureswill encourage migration away from using power hungry software only solutionswith high central processor clock speeds towards those using more battery-lifefriendly hardware acceleration as provided by our PowerVR technology. We now have 14 committed SoCs across our partners that incorporate our mobiletechnologies and are targeting the mobile phone and PDA markets. These includedevices from Renesas, TI, Intel, Samsung, Philips and Freescale. Significantly,in addition to Renesas and Intel, who started product shipment during the secondhalf, TI, Philips and Samsung were demonstrating mobile phone applicationprocessing devices incorporating our mobile graphics technology at the 3GSMWorld Congress in February 2005. Given the partners we have already secured, we are truly well positioned tobenefit from these trends as they progress. Our partners between them have over70% of the worldwide market for chips in the mobile sector and we expect to seeour technology achieve very high penetration in the growing segment of mobiledevices needing hardware graphics/video acceleration. Estimates over the nextfour years suggest that this segment will approach 50% of the total mobile phonemarket, providing the potential for our mobile technology to reach volumes inhundreds of millions per annum. Although we are at the very beginning of this process we have already seenshipments of around 1.5m partner chips incorporating our mobile graphics/videoin the second half following the launch of only three end-user devices. At thehalf-year, we reported that the launch of mobile phone products based on ourtechnology had been delayed due to partner project timing and, in particular,software integration. It is therefore pleasing to advise that we now have bettervisibility of a significant number of end product launches scheduled during the2005/6 financial year and beyond. There are already NTT DoCoMo enabled handsetsshipping in Japan (e.g., Fujitsu's F901iC & Mitsubishi D901i), and PDAs (e.g.,the Dell Axim X50v), which incorporate our mobile graphics/video technologies.Additionally we have visibility of over ten handset manufacturers who areactively developing mobile phones based our partners' chips that in turn use ourtechnology. Some of these, particularly in Japan and Korea, are targetingshipment before Christmas 2005. Digital Radio/Audio We have maintained our 70% market share in DAB digital radio technology despitesignificant growth in this market and increased competition. Over 80 end-userproducts, including models from Sony, Philips, TEAC and Sharp, are now based onour technology as supplied by our licensing partner Frontier Silicon. Throughthe same partnership we have also secured a lead position in the emerging T-DMBmobile TV market, which uses DAB as the underlying technology. In September this year, Frontier Silicon announced that its Chorus device, basedon our META technology, has shipped in over 1m DAB-based products, equating toover 70% of the installed base. The Chorus chip is now being deployed inautomotive design wins through a module specifically targeted for thisenvironment. To date most of the DAB volume has been in the UK, which isexpected to continue its growth from 1.2m units during the 2004/5 financial yearto around 1.8m units in 2005/6 and reaching 5-6m units by 2008. This will bringthe cumulative UK market volume to 13m by the end of 2008, and householdpenetration to 28% in the same timeframe. Other regions are between one to threeyears behind the UK although already this year we have seen real progress inDenmark, Benelux and Singapore. We expect to see further growth of this marketoverseas as other countries begin to roll out DAB. Frontier Silicon already havesolutions in place for these emerging DAB markets. The emergence of the mobile-TV standard T-DMB, which is based on the DABstandard, also means that our DAB technology and devices based on it havefurther significant potential. (See section on Mobile TV). TV Segment (Digital and Flat Panel Transitions) Three major transitions in the TV market are creating significant opportunities:the mainstream transition from analogue to digital, the arrival ofhigh-definition (HD) TV and, very importantly, the migration to flat paneldisplays. In addition the arrival of digital transmission around the world hasintroduced yet more broadcast standards to be supported covering terrestrial,satellite and cable options. Our strategy has been to target our technologies atthese changes and hence maximise the benefits that we can bring to partnersinterested in exploiting these trends. Specifically we have three benefits thatmake our offering in this segment unique and effective for our partners. One isour multi-standard UCC (Universal Communications Coprocessor) technology thatallows the same semi-programmable engine to perform both analogue (NTSC, PAL, &SECAM) and the many digital demodulation (receiver) functions. The second isde-interlacing and image-enhancement technologies that are highly innovative andessential for effective support of flat panel screens. And finally, and veryimportantly, the uniquely comprehensive and end-to-end TV IP that fully supportsthe latest trends. In addition to our extensive PowerVR video technologies andmulti-standard UCC, our multi-threaded META processor is able to service allgeneral-purpose and audio requirements of modern TVs in a very efficient manner. The total worldwide TV market is over 160 million units per annum and whilst thevast majority are still old fashioned analogue CRT TV's, the proportion ofdigital (with analogue legacy support) and flat panel TV's is increasingrapidly. The flat panel TV volume in 2004 was over 8.1m units and is expected toreach 15m in 2005 and 50m units by 2008. Digital TV shipments are expected torise from 17m in 2004 to almost 80m in 2008. Industry analysts indicate thattotal shipments of Digital TVs and digital STBs were 49 million units in 2004and are expected to total 181m by 2010. We have three active partners in this segment. A total of six partner devicesare committed, with Frontier Silicon's Logie in production, four at prototypesilicon stage and one other in pre-silicon development phase. Currently FrontierSilicon's Logie is the only shipping device and is used in two Freeview boxesunder the Goodmans and Matsui brands. More STB and iDTV design wins are in thepipeline and we expect other TV products including flat panel iDTVs based on ourtechnologies to begin shipment by end of first half FY2005. Mobile TV Another emerging market is that of mobile TV where new standards, such as DVB-H,T-DMB, ISDB-Tss, have been ratified that support these services in differentregions. These technologies will be very relevant to mobile handsets andpotential volumes are similarly large. Various research organisations havesuggested market sizes of between 85m to 130m units by 2010. Nokia has forecastean even more aggressive figure of 300m units by the year 2010 for DVB-H alone. Through our original partnership with Frontier Silicon we are already engaged inproducts targeting T-DMB as this standard is based on DAB and can benefit fromexisting devices and broadcast infrastructure. Our technology for mobile TV reception is unique in that it is designed to bemulti-standard and flexible so that the same solution can support multiplestandards used in a region and/or even support different geographical standardssimilar to tri-band mobile phones. We believe this feature is very important for the simple reason that globaloperators and multi-band capabilities have been a key trend in the mobile phonemarket. Our mobile TV platform combines the programmability of UCC Mobile andsuitably selected processing cores from our META and MTX range of processors todeliver highly flexible solutions with low power. We have been developing ourmulti-standard mobile TV receiver platform targeting DVB-H and T-DMB initiallyand will extend to ISDB-Tss in a second phase. This technology is now at thestage of lead partner engagement and we are seeing significant interest. InMarch 2005, we licensed the technology to Frontier Silicon as a lead partner. Trial services for T-DMB (Korea and certain EU countries including Germany),DVB-H (US and EU - including UK, Finland, Germany, France, Spain and Australia),and ISDB-Tss (Japan) have begun and we expect full-blown services to be in placeand products in support of these markets to start shipment from the mid 2006onwards. The Chorus chip and its follow-on are also well placed to target the emergingmobile TV standard (T-DMB) in Korea, a DAB related broadcast standard. Asimplied above there are also indications that other countries including someEuropean countries that have DAB infrastructure may opt for T-DMB to acceleratethe mobile TV roll out. The low power consumption video decoders from our PowerVR team extend ouroffering beyond the receiver functionality and address the multimediarequirements of devices targeting these markets. Car Navigation The total market for worldwide car navigation systems in 2004 was around 8munits rising to 20m units by 2008. The use of high performance 3D graphics innext generation car navigation is fast becoming mandatory. Our partner Renesas,a market leader in this segment, has had great success with its PowerVRMBX-based devices (including SH7770) and has secured many design wins andsignificant market share. Two OEMs, Mitsubishi and Pioneer, have announced theirproducts and have been shipping high-end after-market systems based on thisdevice since summer 2004. Going forward we expect other products to be announced by major manufacturersincluding systems targeted for factory-fit by car manufacturers in Japan. Weexpect the success of Renesas in Japan, and the global nature of the automotiveindustry, to result in the use of their devices by manufacturers in the rest ofthe world, specifically in the US and Europe. Other semiconductor companiesoperating in this market are also interested in our technologies and we expectthis to lead to new licensing agreements in due course. Amusement We have ongoing relationship with key players in the amusement market. Amongthese are Aristocrat and IGT who use our graphics technology and we also havedevelopment programmes in place with Sammy Sega and Renesas. Currently ourtechnology is being used in Aristocrat and IGT's advanced machines. We expectthe result of our work with Sega Sammy and Renesas to lead to further progressin this market during this year. Outlook and the Future The Group has made significant and strategically important progress during theyear in securing very important long-term new and expanded partnerships whichnow include six of the top ten semiconductor companies. We have continued toinvest to ensure we support the growing number of partners as they start to shipproduct and maintain a cohesive development roadmap that underpins our businessobjectives and our partners' requirements. Our IP is now playing an increasinglyfundamental role in our partners' product development plans. Financial performance in the year was impacted by delays on the closure oflicensing deals. However we have a very active pipeline of negotiations andopportunities, particularly for current and new generation mobile graphics, TVand mobile TV segments and a number of these are at an advanced stage. Alreadysince year-end we have concluded a major agreement with Intel regarding our newgeneration graphics and video technology. The quality of our partners, the scale of partner SoC design wins and thesignificant role our technologies play in our partners' roadmaps willincreasingly accelerate volume growth, particularly in the mobile phone market,and hence our royalty revenues. Associated with this, we also expect anincreased news flow in the coming year as more end-user products are launchedand more partners commit to our current and future technologies although theclosure of new deals will be subject to the usual timing uncertainties. Hossein Yassaie Chief Executive 25 May 2005 IFRS (International Financial Reporting Standards) The Group has prepared these consolidated accounts for the year ended 31st March2005 in accordance with generally accepted accounting principles (GAAP) in theUnited Kingdom. From 1st April 2005, the Group is required to adopt International FinancialReporting Standards (IFRS) in the preparation of its consolidated statements.Therefore, the Group will issue its interim results for the period ending 30thSeptember 2005 in accordance with IFRS. Comparative figures will be restatedaccordingly. The Standards which are expected to have most impact on the net result andshareholders' funds are: IFRS2 re Share Based Payments; IFRS3 re BusinessCombinations under which goodwill will not be amortised; and IAS39 re FinancialInstruments under which trade investments will be valued at fair value. CONSOLIDATED PROFIT & LOSS ACCOUNT Year to 31st March 2005 2004 Total Total Notes £'000 £'000 Group turnover 1 30,583 31,215 Cost of sales (12,947) (14,066) Gross profit 17,636 17,149 Research and development expenses (19,243) (16,096) Sales and administrative expenses (5,938) (5,083) Group operating loss before goodwill amortisation (6,526) (3,012) Goodwill amortisation (1,019) (1,018) Group operating loss (7,545) (4,030) Share of loss of associated undertaking - (4) Total operating loss (7,545) (4,034) Net interest receivable 260 155 Loss on ordinary activities before taxation (7,285) (3,879) Taxation 3 805 613 Loss on ordinary activities after taxation (6,480) (3,266) Loss per share Basic 6 (3.5p) (1.8p) Basic before goodwill amortisation 6 (2.9p) (1.3p) Diluted 6 (3.5p) (1.8p) Diluted before goodwill amortisation 6 (2.9p) (1.2p) During this and the previous year all results arise from continuing operations. BALANCE SHEET 2005 2004 £'000 £'000Fixed assetsIntangible assets 3,203 4,114Tangible assets 4,474 4,115Investment 613 613 8,290 8,842Current assetsStock and work in progress 2,332 2,003Debtors 7,192 4,500Cash at bank and in hand 7,670 6,498 17,194 13,001 Creditors: amounts falling due within one year (8,111) (5,752) Net current assets 9,083 7,249 Total assets less current liabilities 17,373 16,091 Long term liabilitiesCreditors: amounts falling due after one year (588) - Net assets 16,785 16,091 Capital and reservesCalled up share capital 18,905 18,014Share premium account 36,415 30,134Other capital reserve 313 267Warrant reserve 1,111 1,157Merger reserve 2,402 2,402Profit and loss account (42,361) (35,883) Shareholders' funds - equity 16,785 16,091 CONSOLIDATED CASH FLOW STATEMENT 2005 2004 £'000 £'000 £'000 £'000 Cash outflow from operating activities (5,455) (3,062) Returns on investment and servicing of financeInterest received 216 128Interest paid (39) (3)Net cash inflow from returns on investments and servicing of 177 125finance Taxation 805 576 Capital expenditure and financial investmentsPurchase of tangible fixed assets (2,164) (1,995)Purchase of intangible fixed assets (321) (209)Proceeds from sale of tangible fixed asset 344 -Net cash outflow for capital expenditure and financial investments (2,141) (2,204) Cash outflow before use of liquid resources and financing (6,614) (4,565) Management of liquid resourcesCash (outflow)/inflow from increase/decrease in short term deposits (1,103) 903 FinancingIssue of shares 7,172 4,981Long term loan 620 -Redemption of long term loan (6) - Increase in cash in the period 69 1,319 Reconciliation of operating loss to operating cash flows 2005 2004 £'000 £'000 Operating loss (7,545) (4,030)Depreciation and amortisation charges 2,904 2,841(Profit) on disposal of fixed asset (104) -Investment in respect of services provided - (66)(Increase) in stock (329) (487)(Increase) in debtors (2,609) (1,177)Increase/(decrease) in creditors: amounts falling due within one 2,228 (143)year Net cash outflow from operating activities (5,455) (3,062) Reconciliation of net cash flow to movement in net funds 2005 2004 £'000 £'000 Increase in cash in the period 69 1,319Cash flow from increase/(decrease) in liquid resources 1,103 (903) Movement in net funds in the period 1,172 416 Net funds at 1st April 6,498 6,082 Net funds at 31st March 7,670 6,498 NOTES 1. Segmental Analysis Turnover is analysed by geographical area of sales as follows: 2005 2004 £'000 £'000 United Kingdom and Europe 20,251 21,462Asia 4,343 6,544North America 4,628 1,899Rest of the World 1,361 1,310 30,583 31,215 All turnover originated from the United Kingdom and Europe 2. The Directors do not propose the payment of a dividend. 3. The taxation credit for the financial period includes a Research andDevelopment tax credit of £1,096,000(2004: £838,000) offset by tax deducted atsource on overseas earnings not recoverable in the period. No corporation taxcharge has arisen due to accumulated tax losses. 4. Copies of the Group's full Report & Accounts will be sent toshareholders by 5th July 2005. Additional copies will be available from theCompany's registered office, Home Park Estate, Kings Langley, Hertfordshire WD48LZ. 5. The Annual General Meeting of Imagination Technologies Group plc will beheld at Imagination House, Home Park Estate, Kings Langley, Hertfordshire WD48LZ at 11.00am on 27th July 2005. 6. Loss per share 2005 2004 £'000 £'000 Loss attributable to shareholders (6,480) (3,266)Goodwill amortisation 1,019 1,018 Loss attributable to shareholders before goodwill amortisation (5,461) (2,248) 2005 2004 Shares '000's Shares '000's Weighted average number of shares in issue 186,806 176,678 There are no potentially dilutive ordinary shares in issue as at31 March 2005 2005 2004 Loss per share - Basic (3.5p) (1.8p) - Basic before goodwill amortisation (2.9p) (1.3p) - Diluted (3.5p) (1.8p) - Diluted before goodwill amortisation (2.9p) (1.2p) The above Profit and Loss Accounts and Balance Sheets are an abridged statementof the full Group accounts for the years ended 31 March 2005 and 2004, on whichthe reports of the Auditors, KPMG Audit PLC, are unqualified and which did notinclude a statement under Section 237(2) or 237(3) of the Companies Act 1985.The Statutory Accounts will be filed with the Registrar of Companies in duecourse. The 2004 Statutory Accounts have been filed with the Registrar ofCompanies. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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