25th Jun 2008 07:00
25 June 2008
Imagination Technologies Group plc
Full year profit, continued growth momentum and strategic progress
Imagination Technologies Group plc (LSE: IMG), leading provider of System-on-Chip (SoC) Intellectual Property (IP), today announces results for the 13 months to 30 April 2008, with comparatives for the 12 months ending 31 March 2007.
Business Highlights
Licensing
Continued strong performance; 13 major agreements, involving over 22 silicon IP core licences:-
Strategically important deals with major international OEM, Texas Instruments, NEC Electronics in the first half, and Renesas, Samsung, NEC Electronics and Intel in the second half
New partnerships with Sigmatel (now part of Freescale), SI Electronics and Wireless Ventures
Range across broad market areas - mobile phone, Personal Media Player (PMP), digital TV, MID/UMPC, digital radio/connected audio and amusement
Strong pipeline of prospects
Royalties and Design Wins
Partner chips shipped increased to 47m units (2007: 26m units)
67 chip design wins (2007: 50); 26 in production
90+ mobile phones - Nokia, Samsung, Sony Ericsson, Motorola and other major global players
Leading PMP devices shipping in volume
Shipment of Intel® Centrino® Atom™ technology in MID/UMPC markets started
DAB market share increased to 80%; global adoption of DAB-based standards and emerging market for Internet and connected audio technologies to drive growth
Strong position for graphics for in-car navigation systems and PNDs (Personal Navigation Device)
PURE Digital
Remains leading digital radio supplier in UK
Increased market share despite tightening economic situation
Strong and diversifying roadmap underpins further progress
- Increasing opportunities in markets beyond UK
- Major products with Internet connectivity and portal support launching next quarter
- New products and strong ranging with key retailers for Christmas period
Financials
Group revenue up 25% at £60.0m (2007: £48.1m)
Technology revenues increased 47% on a $ basis to £29.9m
- Licensing revenue up 56% on a $ basis to £19.0m
- Royalty revenue up 33% on a $ basis to £10.9m
- PURE Digital revenue up 15% to £30.1m (2006: £26.3m)
Gross profit up 42% to £38.6m (2007: £27.1m); margin % improved to 64% (2007: 56%)
Continued investment in R&D for both Technology and PURE businesses
Profit before tax of £1.9m (2007: Loss £2.3m)
Earnings per share 1.0p (2007: Loss per share 1.2p)
Net cash balance of £7.2m at April 2008 (March 2007: £9.6m)
Hossein Yassaie, Chief Executive, commented:
"With very strong licensing revenue performance and continued progress in partner chip volume ramp-up, the growth in our Technology business was over three times the average of the IP industry as a whole. The fundamental drivers behind this significant progress are the increasing relevance of our technologies to emerging market requirements, the diverse nature and scale of these mainstream consumer markets, and the calibre and leading position of our partners in these markets.
"While the global economic slow-down remains a macro-level concern, based on the active pipeline of licensing opportunities, the expected volume ramp-up in partner chip shipments and PURE's leading position and innovative product roadmap, we remain confident of continuing to make good progress in the current financial year. Our goal remains to achieve two hundred million annual unit shipments by our partners in the 2010 timeframe."
Geoff Shingles, Chairman, commented:
"We are seeing the continued financial and strategic benefits flowing from the ongoing huge effort and commitment from Hossein, his management team and our highly skilled employees. I am confident that Imagination will continue to build on its leading position and grow to become a major global player in the markets in which it operates."
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Enquiries: |
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Imagination Technologies Group plc |
Tel (today): 020 7457 2020 |
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Geoff Shingles, Chairman |
Tel (thereafter): 01923 260 511 |
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Hossein Yassaie, CEO |
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Trevor Selby, CFO |
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College Hill |
Tel: 020 7457 2020 |
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Adrian Duffield/Carl Franklin |
About Imagination Technologies
Imagination Technologies Group plc (FTSE:IMG) - a leader in semiconductor System on Chip Intellectual Property (SoC IP) - creates and licenses market-leading embedded graphics, video and display accelerators, multi-threaded processors and multi-standard receiver technologies. These IP solutions are complemented by dynamic and extensive developer and middleware ecosystems. Target markets include digital radio and audio; mobile phone multimedia; personal media players (PMP); in-car navigation and driver information; personal navigation devices (PND); Ultra Mobile PC (UMPC) and Mobile Internet Device (MID); digital TV & set-top box; and mobile TV. Its licensees include leading semiconductor and consumer electronics companies, as well as innovative leading edge start-up and fabless semiconductor companies. Imagination has corporate headquarters in the United Kingdom, with sales and R&D offices worldwide. See: www.imgtec.com.
Financial and Business Review
The 2007/8 financial period saw significant progress in both financial and strategic terms with both the Technology business and the PURE Digital business delivering growth and the Group achieving profitability.
Financial Review
As stated last year, the Group has moved the end of the financial year to 30 April, primarily to provide a more accurate assessment of its royalty revenues at the close of financial periods. The financial period for 2007/8 was extended to 13 months; running from 1 April 2007 to 30 April 2008. From hereon financial years will run from 1 May to 30 April. In the commentary below, therefore, the results for the 13 month period to April 2008 are compared to those for the 12 months to March 2007.
Group revenues for the period ending 30 April 2008 were £60.0m (2007: £48.1m), an increase of 25%. Technology revenues, comprising licensing and royalties, were 37% ahead at £29.9m (2007: £21.8m), on an actual dollar basis, Technology revenues grew by 47%. PURE Digital revenues, in spite of the tighter market conditions in 2008, were up 15% at £30.1m (2007: £26.3m).
Licensing revenue increased strongly by 46% to £19.0m (2007: £13.0m) with a significant number of licensing agreements, including extensions to existing partnerships, being signed. On an underlying dollar basis revenue grew by 56%. Royalty revenue increased by 24% to £10.9m (2007: £8.8m), based on the shipment of 47m chips (2007: 26m), up 33% on a dollar basis.
The significant exchange rate movements at the revenue level have had minimal impact on the Group's overall profitability with the dollars generated by the Technology business being used to procure product for the PURE Digital business.
Gross profit for the period was £38.6m, a 42% increase (2007: £27.1m). The gross margin continued to improve to 64% (2007: 56%). This has resulted from stronger gross margins in both Technology and PURE Digital divisions together with a further change in the Group revenue mix towards the higher margin Technology business.
Research and development expenses were £29.1m (2007: £23.4m). Investment in our technologies is critical to ensure that we can continue to supply market leading IP Cores to our partners. Similarly engineering resources are important in supporting the growing licensing business and ensuring wider deployment of our technologies by our partners. There has been increased investment in PURE Digital in order to deploy Wi-Fi and Internet connectivity in PURE products. The investment of resources in the development facility in India has continued.
Sales and administrative costs were £8.0m (2007: £6.2m). Non cash share-based incentive costs have increased to £1.3m in the period (2007: £0.7m).
As a result of the strong gross profit growth in the period, the Group has moved into profitability. The profit before tax for the period of £1.9m compares to a loss of £2.3m for the previous year.
There was a net tax credit in the period of £0.4m (2007: £0.2m charge). This resulted from a £0.5m deferred tax credit offset by tax deducted at source on overseas earnings not recoverable.
The Group reported earnings per share of 1.0p (2007: loss per share 1.2p).
There was an operating cash outflow of £1.0m in the period (2007: £2.0m outflow), which resulted from increased working capital. The latter relates to increased debtors, cash from which is coming through in the current financial period, and an increase in stock for PURE Digital which is being managed.
Capital spend in the period was £2.4m (2006: £1.9m) which included additional equipment for the engineering teams as well as fitting out new facilities at Kings Langley and Leeds. Net cash resources stand at £7.2m at April 2008 compared to £9.6m at March 2007.
Business Review
Technology Business
The Technology division was one of the fastest growing businesses amongst leading IP companies with a growth rate exceeding the industry average for 2007 by over three times. This progress means that the business has risen to fourth position by revenue in the global IP league table (source: Gartner). This has been achieved as a result of our R&D effort over many years being targeted to ensure both significant competitive advantages and strong alignment of our offerings and roadmaps with emerging market trends.
Licensing
Following consecutive growth over the last five half-year periods for licensing revenue, the second half of 2007/8 again saw a strong performance.
For 2007/8, this led to the completion of strategically important and financially significant licensing agreements during the year. In total, Imagination concluded 13 major new licensing agreements, involving 22 Silicon IP core licences. In addition there were a number of smaller extensions or upgrades from existing customers as well as an increasing number of software licenses with system companies enabling them to tailor their use of our flexible IP to their product requirements. Major licensing agreements were concluded across the breadth of our key markets including mobile phone, personal media player (PMP) devices, TV/Digital audio/visual (AV), MID/UMPC, digital radio/connected audio and amusement.
Specifically, a strategically important partnership was secured with a major international OEM which is deploying our new generation graphics and video cores in a number of its current and future key products. A further agreement with Texas Instruments (TI) for a second member of the POWERVR SGX family will lead to our IP being deployed in a broader strategic manner at TI. As a result, multiple generations of Imagination's graphics technology are being deployed in OMAP2, OMAP3 and in future OMAP platforms.
A licence with NEC for key display technologies for the digital AV market segment has extended this important partnership into an additional market area. We expect the fruits of this partnership to appear in TVs from a global major brand during early 2009. Other significant agreements closed during the year included Renesas licensing a third POWERVR SGX core for use in its successful and fast growing SH-Mobile product lines, a new license with Samsung for graphics and video cores and Intel with a major licence extension adding a number of our new graphics, video and display cores.
One notable feature is the increasing depth of our partner engagements which not only have resulted in the licensing of a broader range of technologies but also their application across wider markets by partners. Licenses with new partners during the year included Sigmatel (now part of Freescale), SI Electronics and Wireless Ventures.
Partner Chip Shipments and Royalties
Partner chip unit shipments continued to grow and reached 47m units (2007: 26m units) for the period. The volume growth has been primarily driven by the production ramp-up across the mobile phone, PMP, digital radio and 3D-enabled car navigation systems. There have also been initial contributions from the TV and mobile TV segments. Imagination's products form a critical component in an increasingly wide range of consumer devices; in the vast majority of high-end mobile phones that utilise advanced graphics, in leading standard setting PMP devices, in new emerging categories such as MID and UMPC, in digital radios as well as in new emerging connected audio devices, and are being designed into more and more consumer and automotive product categories. The increasing number of new licences which Imagination has signed reinforces the Company's view of the eventual size of the available market for its technologies.
The Company remains comfortable with its forecast of achieving 200 million partner chip shipments in the 2010 timeframe and beyond although, as can often happen in the early stages of a market development, the rate of product introduction and the speed of production ramp-up can be variable and has recently been a little slower than anticipated. As reported by some of our semiconductor partners and their OEM customers, the uncertain global economic environment appears to have, in some cases, slowed down the volume ramp up during the post-Christmas period where the units shipped fell a little short of initial targets. This was reflected in our full year partner chip volume which grew very significantly but just missed the 50m target.
Within the mix of partner SoCs shipped we have also seen volume build up of some lower-end and older devices which usually attract a lower per unit royalty. Over time, with the increasing number of SoCs with our newer generation technologies and/or higher content of Imagination IP coming to market, we will see the mix migrating more towards higher-value as well as higher-end devices. In this respect we have just seen initial customer shipment of POWERVR SGX based chips from a number of our partners.
Overall, Imagination expects general progress and growth to continue as existing product volumes ramp up, more products come to market, and as target markets develop and expand. In this respect our diverse semiconductor partnerships, the spread of their design wins across many key OEMs, and our close relationships with some of these OEMs, will continue to work in our favour and minimise the macro economic effects. Furthermore, the emerging markets including China and India also have significant demand for advanced and new products and will be generally helping to reduce the impact of global economic issues.
Given the mainstream markets that Imagination is targeting and the increasing relevance of its technologies to these markets it is clear that across mobile phone, PMP, digital radio, car navigation/information, TV, MID/UMPC and mobile TV segments the total available market will grow to over 2 billion units by 2010. The proportion of this total market size that is relevant to technologies offered by Imagination, i.e. serviceable available market (SAM), is set to exceed 800 million units by 2010. Imagination believes it is well positioned to capture a significant portion of this available market based on the ability of its technology offerings to provide highly competitive solutions to address the requirements of these markets and its strong partnerships with world leading semiconductor companies and key OEMs.
Imagination's target is to achieve 200 million chip volume per annum in the 2010 timeframe with the prospect of significant further growth beyond. This view is underpinned by our partners' increasing commitment to the Company's technology, both across multiple generations of each technology as well as across Imagination's broadening technology offerings.
New SoC Design Wins
The momentum behind new partner SoC design wins has continued with the cumulative number of committed partner SoCs increasing to 67 at April 2008, compared with 50 a year ago. These design wins are active devices, of which 26 are shipping with balance of 41 still in design. They are the drivers for future partner SoC shipments and therefore further royalty revenue growth. These committed devices are diversified across Imagination's partners and key market segments: 28 for mobile phone; three in digital radio; three for PMP, 10 for car & personal navigation; four in UMPC/MID; six in mobile TV; eight for digital TV; and five for amusement and toys.
Importantly we now have well over 20 partner SoCs deploying our new generation graphics, POWERVR SGX, with three having just entered initial production stages.
Markets
Given the mainstream markets that Imagination is targeting and the increasing relevance of its technologies to these markets it is clear that across mobile phone, PMP, digital radio, car navigation/information, TV, MID/UMPC and mobile TV segments, the total available market will grow to over 2 billion units by 2010. The proportion of this total market size that is relevant to technologies offered by Imagination, i.e. serviceable available market (SAM), is set to exceed 800 million units by 2010.
Imagination believes it is well positioned to capture a significant portion of this available market based on the ability of its technology offerings to provide highly competitive solutions to address the requirements of these markets and its strong partnerships with world leading semiconductor companies and key OEMs.
A review of progress in Imagination's target markets is as follows:-
Mobile Multimedia - In the mobile phone market segment, over 90 handsets have so far incorporated Imagination's technologies; many of which are market leading models with new capabilities from the key OEMs. These include handsets from Nokia, Samsung, Sony Ericsson, Motorola, NEC, Fujitsu, Mitsubishi, Panasonic and Sharp. Imagination is seeing continued and accelerated demand for multimedia technologies in this market. Imagination estimates that during 2007/8 its graphics technology was deployed in over 70% of handsets that were equipped with hardware acceleration.
As expected the deployment of hardware acceleration is rapidly increasing to a larger proportion of mobile phones as the demand increases providing us with a fast growing serviceable available market as already highlighted. Imagination's strong partnerships should enable us to continue to effectively exploit this opportunity as it grows. Apple's deployment of graphics in its iPhone and iPod Touch, with their much improved user interface and Internet browsing capabilities, has created what is now being called 'the Apple Factor' in the industry. This is resulting in a major drive by all key players to improve the user interface for handsets, for which hardware acceleration is essential. This 'Factor' is having an accelerating effect in deployment of graphics and multimedia technologies not only in the handset markets but in all mobile and even consumer electronics categories, which in turn has increased the demand for the technologies we offer.
Digital Audio - The digital radio market has been and continues to be an important target for Imagination's multi-standard receiver and processor/DSP technologies. Imagination has been a key innovator and driver in this segment and saw its technology deployment increased to over 80% in DAB and related markets in 2007. The digital radio market is now developing significantly from both a geographical and technological aspects. DAB or DAB+ and other variations are now being actively deployed in many countries beyond the UK, helping to accelerate the growth of the digital radio market.
The penetration of Internet connectivity and WiFi is enabling new opportunities in the form of Internet and WiFi based radio and audio streaming. These connected audio trends are strongly supported by our radio/connected audio technology platform which is being developed to support global broadcast as well as Internet connectivity. This combination is expected to be a key driver in the next generation of radio and connected audio devices. Both from a technology licensing perspective as well as through PURE Digital, Imagination is well placed to continue to lead in this market.
PMP - This year Imagination has also seen its technology deployed by a key player in the PMP market where products increasingly require advanced graphics and video capabilities in order to improve interactivity and user interface capabilities. Imagination has also secured a number of new partner SoCs that it expects will enable the Company to obtain a significant market share in this high growth segment.
Car Navigation - In the car navigation market, the vast majority of the new 3D-based navigation systems in Japan continue to use partner chips which deploy Imagination's POWERVR technology. In addition to the long-standing relationship with Renesas which is progressing well, the new relationships with other key players in this market such as NEC, Freescale and SiRF are set to result in a significant market share in both traditional in-car navigation systems and in the next generation of Personal Navigation Devices (PNDs). The attention that the traditional mobile phone application processor semiconductor companies (such as TI) and also Intel through its Intel® Centrino® Atom™ technology offerings are paying to these markets has increased the routes through which our technologies are being offered in this market.
Imagination's partnership with Intel in the personal computing/UMPC and MID segment has progressed to plan with the recent significant announcement of launch and production shipment of the Centrino Atom processor technology which is using our POWERVR SGX and VXD video cores. The Centrino Atom chipset has already secured many OEM design wins with over 10 products announced and due to ship shortly. There is a very strong ongoing partnership with Intel with further significant additional projects committed during the year.
TV - Imagination's continued commitment to the TV segment is starting to bear fruit and has made an initial contribution to overall volume and royalty ramp-up in the 2007/8 financial period. Given the further significant design wins the Company has secured during the year, Imagination expects to be able to build volume in this market next year and beyond. Specifically, Imagination now expects its partnership with NEC to lead to TVs from a major global brand to start shipping from early 2009.
Mobile TV - With Imagination's current generation technology already shipping in some of the early T-DMB mobile TV markets in Asia, the shipment of devices featuring its new multi-standard mobile TV technology should see Imagination's technology deployed in a widening range of geographic markets as these develop. Imagination's partners deploying this multi-standard mobile TV technology supporting DVB-H and T-DMB are now at a stage that they are able to demonstrate leadership performance and extremely small footprint solutions to key OEMs worldwide. As a result Imagination expects that this will ultimately result in securing a sizable market share in this segment as this market emerges and achieves volume.
PURE Digital
With a good Christmas sales period, and in spite of a marked post-Christmas slow down in consumer spending and softness in retail demand, PURE was able to deliver another year of revenue growth and a profitable full year.
During the period, PURE maintained its leadership of the DAB market and has continued to implement its effective strategy for this market by i) taking advantage of the digital nature of DAB in order to deliver products which provide advanced and novel features, ii) diversify its product range within the digital radio to all key market segments, and iii) deliver quality low-cost products to both secure growing retail shelf space and also to drive the DAB market forward.
During 2007/8, the UK DAB market grew by 19% in unit volume and by 9% in value as more affordable radios continued to come to market. Other countries have also begun embracing digital radio. Ireland is expected to adopt the DAB standard shortly. The advent of the DAB+ standard is also accelerating this process with this enhanced standard now being adopted by many other countries including Australia, Switzerland and Germany. France has selected a European variant of the Korean T-DMB standard.
Our underlying multi-standard receiver and audio technologies at Imagination support all these developments and PURE already has advanced plans in delivering DAB+, T-DMB and other required standards as the opportunities in other markets arise.
PURE is actively engaged in all the key relevant markets including Ireland, Switzerland and Germany from its head office in UK and through its local presence in Germany. Additionally this year PURE has formally opened up its sales office in Australia to take full advantage of the fast approaching opportunities in Australasia.
In 2007/8, as part of its ongoing strategy, PURE launched a range of new products prior to the Christmas period including its eco-friendly range, EcoPlusTM, which significantly reduces both stand-by and operational power consumption and uses environmentally friendly component and packaging. This initiative has been extremely well received by all the key retailers and is a key part of PURE's future commitment to the environment.
PURE also launched its new EVOKE-1S range which incorporates many advanced features such as IntellitextTM for better data access and Organic Light Emitting Diode (OLED) graphical display technology in order to provide a crystal clear display for reading from any angle. Additionally during the second half of the year PURE announced Highway, its first self-install, in-car DAB solution which also supports iPod connectivity allowing both in-car digital radio and digital music playback.
Among initiatives to broaden into new market segments, PURE also launched its successful Chronos product equipped with iPod docking which has been a big success and is rapidly became the best-selling iPOD docking radio. As part of its drive to make the DAB more affordable PURE launched the new £49 Siesta clock radio as the entry level product to its successful clock radio range.
PURE has this week announced the first member of the new 'ONE' family, 'ONE Mini' with a new price point of £39. This radio, plus other members of this family to be launched shortly, will build on the huge success of the original ONE radio, both growing the market and increasing PURE's share of it. There will also be other products launched over the next few months to complete the line up in preparation for the peak season.
In the context of new emerging areas PURE has been actively developing products which complement its existing activities. These developments are strongly linked in with Imagination's overall technology strategy and are targeted to both support and enhance its technology offerings in these areas. A key area is Internet connectivity and connected/streaming audio; a major focus for both the Technology division and PURE.
The Group has developed the underlying multi-standard radio and connected audio platform plus the necessary Internet portal technologies to enable upcoming PURE devices to receive new user friendly services including Internet radio, access to interactive and on-demand services such as Podcast and 'Listen Again' and support radio-triggered music download. There will be significant product announcements in the Internet and connected radio/audio area within the next quarter.
As a result of its continuing strong product line up and planned delivery of new technologies prior to the peak Christmas season, PURE has already secured strong product ranging at key retailers for the Christmas period.
Outlook
The ongoing requirements of Imagination's existing partners, combined with growing interest from new customers across a broad range of end user markets, gives the Board considerable confidence that Imagination's technologies will continue to be adopted in the future. Whilst the timing and level of licensing revenues may be difficult to forecast accurately, and the overall global economic uncertainty may have some impact on purchasing decision-making, Imagination expects to see an active 2008/9 for licensing opportunities and to make further progress in its Technology division.
The Group expects significant chip volume growth for the next few years as its technology deployment continues across key market segments, given the increasing number of end-user products coming to market and the expected rapid growth in the emerging markets which its technologies are targeting.
This is driven by the fact that the markets Imagination targets already have or will shortly have addressable market opportunities in the 10s or 100s of millions of units each, with this growth set to continue. Imagination's aim remains to reach 200 million annual volume in the 2010 timeframe given that the total serviceable market is estimated to exceed 800 million units by that date, although exact timing and scale of market growth are difficult to predict precisely.
With digital radio technology becoming a standard feature in most home audio and music systems in the UK, and in due course in other geographic markets, Imagination is confident that particularly over the medium term PURE will be able to maintain its progress and continue to grow through innovative and leading products and increased geographical market presence. For the current year new product plans are at a very advanced stage with several product announcements scheduled over the next few months. The retailer ranging plans are strong and firmly in place.
Given the very noticeable and ongoing retail softness post-Christmas, concerns remain over the exact scale of the global economic slow-down and its real impact on the consumer spending habits as we plan for the next peak retail season. Our strong product line, which will increasingly be unveiled over the coming months, the already-agreed extensive ranging with the top retailers, and the extended geographical sales coverage, are expected to position PURE as effectively as possible for the peak selling season.
We are continuing to invest in a controlled and targeted manner to ensure that we are fully able to exploit the strong market positions for both the Technology business and the PURE Digital business.
Based on an active licensing pipeline, expected chip volume ramp up and royalty growth, and PURE taking advantage of its strong product line-up, the upcoming peak season and the non-UK digital radio market development, the Group remains well placed. Whilst the macro economic volatility and its influence on consumer spending may have some short term impact on our development, the Board remains confident that the Group's good progress will continue.
Hossein Yassaie
Chief Executive
25 June 2008
Preliminary Results for the thirteen months to 30 April 2008
SUMMARISED CONSOLIDATED INCOME STATEMENT
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Thirteen months to 30 April 2008 £'000 |
Year to 31 March 2007 £'000 |
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|
|||||
|
Revenue |
60,022 |
48,062 |
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Cost of sales |
(21,413) |
(20,913) |
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|
Gross profit |
38,609 |
27,149 |
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|
|
|||||
|
Research and development expenses |
(29,110) |
(23,419) |
|||
|
Sales and administrative expenses |
(7,997) |
(6,250) |
|||
|
Total operating expenses |
(37,107) |
(29,669) |
|||
|
Operating profit/(loss) |
1,502 |
(2,520) |
|||
|
Financial income |
428 |
259 |
|||
|
Financial expenses |
(49) |
(40) |
|||
|
Net financing income |
379 |
219 |
|||
|
|
|||||
|
Profit/(loss) before taxation |
1,881 |
(2,301) |
|||
|
Taxation |
383 |
(244) |
|||
|
Profit/(loss) after taxation attributable to equity holders of the parent |
2,264 |
(2,545) |
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Earnings per share - basic |
1.0p |
(1.2p) |
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Earnings per share -diluted |
1.0p |
(1.2p) |
During this period and the previous year all results arise from continuing operations.
CONSOLIDATED STATEMENT OF RECOGNISED INCOME AND EXPENSE
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Thirteen months to 30 April 2008 £'000 |
Year to 31 March 2007 £'000 |
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|
|||||
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Exchange differences on translation of foreign operations |
30 |
(16) |
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Net change in fair value of available for sale investments |
(3,422) |
872 |
|||
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Deferred tax arising on available for sale investments |
(757) |
- |
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Total income and expense recognised directly in equity |
(4,149) |
856 |
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Profit/(loss) for the period |
2,264 |
(2,545) |
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Total recognised income and expense for the period attributable to equity holders of the parent |
(1,885) |
(1,689) |
SUMMARISED CONSOLIDATED BALANCE SHEET
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At 30 April 2008 |
At 31 March 2007 |
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£'000 |
£'000 |
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Non-current assets |
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Intangible assets |
4,700 |
4,872 |
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Property, plant and equipment |
4,626 |
3,791 |
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Investments |
4,611 |
7,027 |
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Trade and other receivables |
795 |
- |
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14,732 |
15,690 |
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Current assets |
||
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Inventories |
5,129 |
3,636 |
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Trade and other receivables |
12,988 |
11,260 |
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Cash and cash equivalents |
7,241 |
10,818 |
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25,358 |
25,714 |
|
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Total assets |
40,090 |
41,404 |
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Current liabilities |
||
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Bank overdraft |
- |
(1,259) |
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Current portion of long term borrowings |
(30) |
(29) |
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Trade and other payables |
(7,074) |
(7,495) |
|
(7,104) |
(8,783) |
|
|
Non-current liabilities |
||
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Deferred tax liability |
(243) |
- |
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Other interest bearing loans and long term borrowings |
(500) |
(529) |
|
(743) |
(529) |
|
|
Total liabilities |
(7,847) |
(9,312) |
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Net assets |
32,243 |
32,092 |
|
Equity |
||
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Called up share capital |
21,926 |
21,748 |
|
Share premium account |
50,937 |
50,321 |
|
Other capital reserve |
597 |
593 |
|
Warrant reserve |
826 |
830 |
|
Merger reserve |
2,402 |
2,402 |
|
Revaluation reserve |
2,235 |
6,414 |
|
Translation reserve |
18 |
(12) |
|
Retained earnings |
(46,698) |
(50,204) |
|
Total equity attributable to equity holders of the parent |
32,243 |
32,092 |
SUMMARISED CONSOLIDATED CASH FLOW STATEMENT
|
Thirteen months to |
Year to |
|
|
30 April 2008 |
31 March 2007 |
|
|
£'000 |
£'000 |
|
|
Cash flows from operating activities |
||
|
Profit/(loss) after tax |
2,264 |
(2,545) |
|
Tax (credit)/charge |
(383) |
244 |
|
Profit/(loss) before tax |
1,881 |
(2,301) |
|
Adjustments for: |
||
|
Depreciation and amortisation |
1,751 |
1,622 |
|
Net financing income |
(379) |
(219) |
|
Loss on sale of property, plant & equipment |
- |
15 |
|
Share-based remuneration |
1,318 |
718 |
|
Operating cash flows before movements in working capital |
4,571 |
(165) |
|
Increase in inventories |
(1,493) |
(191) |
|
Increase in receivables |
(3,451) |
(1,794) |
|
Increase/(decrease) in payables |
(572) |
619 |
|
Cash generated by operations |
(945) |
(1,531) |
|
Interest paid |
(49) |
(40) |
|
Taxes paid |
(33) |
(447) |
|
Net cash flows from operating activities |
(1,027) |
(2,018) |
|
Cash flows from investing activities |
||
|
Interest received |
437 |
250 |
|
Acquisition of intangible assets |
(456) |
(683) |
|
Acquisition of property, plant and equipment |
(2,099) |
(990) |
|
Net cash used in investing activities |
(2,118) |
(1,423) |
|
Cash flows from financing activities |
||
|
Proceeds from the issue of share capital |
794 |
6,891 |
|
Repayment of borrowings |
(28) |
(28) |
|
Net cash from financing activities |
766 |
6,863 |
|
Net (decrease)/increase in cash and cash equivalents |
(2,379) |
3,422 |
|
Effect of exchange rate fluctuation |
61 |
(247) |
|
Cash and cash equivalents at the start of the period |
9,559 |
6,384 |
|
Cash and cash equivalents at the end of the period |
7,241 |
9,559 |
NOTES
1. The above Income Statement and Balance Sheets are an abridged statement of the full Financial Statements for the thirteen months to 30 April 2008 and the year ended 31 March 2007, on which the reports of the Auditors, KPMG Audit PLC, are unqualified and which did not include a statement under Section 237(2) or 237(3) of the Companies Act 1985. The Financial Statements will be filed with the Registrar of Companies in due course. The 2007 Financial Statements have been filed with the Registrar of Companies.
2. Segment Reporting
The Group operates as two business segments; the Technology business, comprising licensing and royalty revenues, and the PURE Digital business. The segment information in respect of these businesses is presented below.
|
Thirteen months to |
Year to |
|
|
30 April 2008 |
31 March 2007 |
|
|
£'000 |
£'000 |
|
|
Revenue |
||
|
Technology business |
29,863 |
21,749 |
|
PURE Digital business |
30,159 |
26,313 |
|
60,022 |
48,062 |
|
|
Operating profit/(loss) |
||
|
Technology business |
(97) |
(4,369) |
|
PURE Digital business |
1,599 |
1,849 |
|
1,502 |
(2,520) |
|
|
Total assets |
||
|
Technology business |
23,846 |
22,694 |
|
PURE Digital business |
9,003 |
7,892 |
|
Unallocated assets |
7,241 |
10,818 |
|
40,090 |
41,404 |
|
|
Total liabilities |
||
|
Technology business |
3,707 |
4,259 |
|
PURE Digital business |
3,367 |
3,265 |
|
Unallocated liabilities |
773 |
1,788 |
|
7,847 |
9,312 |
|
|
Net asset analysis |
||
|
Technology business |
20,139 |
18,435 |
|
PURE Digital business |
5,636 |
4,627 |
|
Unallocated assets and liabilities |
6,468 |
9,030 |
|
32,243 |
32,092 |
|
|
Other segment items |
||
|
Capital expenditure |
||
|
Technology business |
2,176 |
1,744 |
|
PURE Digital business |
238 |
182 |
|
2,414 |
1,926 |
|
|
Depreciation and amortisation |
||
|
Technology business |
1,579 |
1,491 |
|
PURE Digital business |
172 |
131 |
|
1,751 |
1,622 |
Revenue is segmented by geographical area of sales as follows:-
|
Thirteen months to |
Year to |
|
|
30 April 2008 |
31 March 2007 |
|
|
£'000 |
£'000 |
|
|
Revenue |
||
|
United Kingdom and Europe |
32,175 |
30,267 |
|
Asia |
14,649 |
7,551 |
|
North America |
12,334 |
8,719 |
|
Rest of the world |
864 |
1,525 |
|
60,022 |
48,062 |
All revenue originated from United Kingdom and Europe.
The operating profit, net assets and capital expenditure of the Group materially relate to the United Kingdom and Europe.
3. The Directors do not propose the payment of a dividend (2007: Nil).
4. The taxation credit for the period relates to a deferred tax credit partially offset by tax deducted at source on overseas earnings not recoverable in the period.
5. Earnings per share
The basic earnings per share for the financial periods reported have been calculated on the weighted average number of shares in issue as shown in the table below. The diluted earnings per share has been calculated on the weighted average number of shares potentially in issue.
|
Thirteen months to |
Year to |
|
|
30 April 2008 |
31 March 2007 |
|
|
Profit/(loss) attributable to shareholders |
£2,264,000 |
(£2,545,000) |
|
Weighted average number of shares in issue |
218.5m |
211.1m |
|
Effect of dilutive shares: Employee Incentive Plans |
11.7m |
-* |
|
Weighted average number of shares potentially in issue |
230.2m |
211.1m* |
*There were potentially dilutive ordinary shares in issue at 31 March 2007 however these are not disclosed as they are anti-dilutive for the period.
6. The Group's full Report & Financial Statements will be made available to shareholders by 24th July 2008. Additional copies will be available from the Company's registered office, Imagination House, Home Park Estate, Kings Langley, Hertfordshire WD4 8LZ.
7. The Annual General Meeting of Imagination Technologies Group plc will be held at Imagination House, Home Park Estate, Kings Langley, Hertfordshire WD4 8LZ at 11.00am on 15th August 2008.
Related Shares:
Imagination Technologies Group