(Adds CEO comments and background.)
By Rory Gallivan
LONDON--U.K. semiconductor group Imagination Technologies Group
PLC (IMG.LN) posted a wider full-year pretax loss as it continued
to invest in research and development, but said it expects to
benefit from a slower growth in operating costs in the future.
Imagination, whose chips are found in devices made by Apple
Inc., Tuesday reported a pretax loss of 12 million pounds ($19.1
million) for the year ended April 30, against a GBP314,000 loss the
previous year, on revenue up to GBP177 million from GBP170.8
million.
Royalty revenue from sales of devices containing Imagination's
technology rose 9% to GBP118.9 million, boosted by a
better-than-expected performance from MIPS, which Imagination
acquired in 2012.
Revenue from licensing its technology to other companies rose
just 2% to GBP39 million, in line with the company's warning in
March that licensing revenue would be close to the previous year's
level, not up 10% as previously predicted.
Imagination said it is targeting licensing revenue growth of 10%
in the current year and it expects royalty revenue to rise.
"As our revenues grow, the natural operational gearing of the
business means that the financial performance is expected to
significantly benefit from a slower growth in operating costs,"
said Chief Executive Hossein Yassaie.
Speaking to Dow Jones Newswires, Mr Yassaie said he was
particularly pleased that MIPS is performing ahead of expectations,
which he said shows customers have welcomed the competition it has
brought to a market dominated by ARM Holdings PLC.
MIPS specializes in central processing units, which power the
general functions performed by smartphones and other devices.
Imagination was previously focused on graphics processing units, or
GPUs, but decided to diversify following a push by ARM Holdings
into the GPU market.
Mr Yassaie said Imagination will continue to invest in growing
technology areas despite plans to keep a lid on operating cost
growth. Such areas include the "Internet of Things," a term used to
describe objects such as speakers and cars being connected to the
Internet so they can be controlled or monitored remotely, and the
security issues associated that arise from this, he said.
Shares at 1051 GMT were up 7 pence, or 3.3%, at 223 pence
valuing the company at GBP604.6 million.
-Write to Rory Gallivan at rory.gallivan@wsj.com; Twitter:
@RoryGallivan
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