Interim Management Statement

8 March 2012

Imagination Technologies Group plc

Interim Management Statement

Imagination Technologies Group plc ('Imagination', LSE: IMG), a leading multimedia, communications and embedded processor technology company, is today issuing its Interim Management Statement for the period from 1 November 2011 to 7 March 2012.

Trading update

Following the strong performance in the first half of the financial year, the momentum in the business continued. The Group's revenue showed good growth against last year as expected.

A combination of new product launches, the traditional holiday period uplift and continuing momentum across the customer base, all contributed to the expected ramp in royalty volumes (quarter ended December 2011). Royalty rates remain firm as the proportion of royalty volume incorporating newer IP was maintained.

Steady progress in licensing continued, following high levels of activity in the first half. The Group signed new licences with both existing and new customers across all key IP product families.

Despite the tough UK retail environment and weak global consumer demand, PURE revenues remained marginally ahead of last year. The strong growth in overseas markets continued.

Technology update

PowerVR graphics & video - the first two Series6 'Rogue architecture' cores were launched in January (PowerVR G6200, G6400). PowerVR Series6 graphics delivers up to 20x performance improvement over the previous generation comparable GPU cores, targeting the same markets. Production versions of the IP cores have been shipped to lead customers.

The optimised combination of GPUs (graphics processors) and VPUs (video processors) continued to gain traction, stimulating growing interest in the Group's PowerVR VXD video decoders and VXE encoders alongside GPUs.

Ensigma communications - the Group saw continued growth in interest and licensing for the Group's multi-standard Ensigma Series3 UCCP DTV solutions, as customers appreciate the value of the technology able to target global multi-standard TVs and STBs.

The on-chip connectivity support in the form of Wi-Fi and other standards continue to interest more customers, looking to integrate such functions for connected consumer audio and multimedia products for home, mobile and automotive use.

Hellosoft V.VoIP and VoLTE - Imagination saw good progress and momentum, including strong engagement in key initial LTE network deployment. It had a positive reception to the new Social Communicator V.VoIP products shown at MWC 2012. These integrate voice and video over IP (V.VoIP) into Facebook and other social media services.

Caustic Professional - good progress was made in the initial engagement in the professional market segment. Technology development and initial delivery are making good progress with the first ray-tracing test chip now manufactured and in use by the development team.

Outlook

The licensing pipeline remains robust. This is expected to result in another good year of growth in licensing revenue, although as ever the timing of deal closures is not always certain.

The royalty volume trend for the full year is in line with the expected range (300m - 320m units) with royalty rates likely to remain at least at the level shown in the first half of the financial year.

Revenue for the financial year from PURE is expected to show a modest improvement on last year, although the environment remains challenging.

The Board remains confident that the Group is on track for continued progress, with the full year results expected to show another good year of growth.

Hossein Yassaie, Imagination's Chief Executive said:

"The demand for our technologies continues to grow strongly. They are powering the transition in several markets to "smart" devices - in particular phones, tablets, TVs and in cars, where our state-of-the-art multimedia and connectivity offering are key drivers.

"Our strategy to identify and create disruptive technologies is paying off - it is set to continue to fuel further strong progress over the next few years."