Imagination Technologies Group plc Boosted By Strong Licensing Performance

imgThe share price of Imagination Technologies (LSE: IMG) — the  British-based semiconductor R&D and licensing company, best known for its PowerVR mobile graphics processors and its Pure DAB radio division — is up 5.5% at the moment, following publication of  its results for the year ended 30 April 2014.

The company reports that group revenues are up 13%, at £170.8m, within which licensing revenues rose 32% (to £38.3m), technology business revenues increased 17% (to £147.5m), and royalty revenues gained 15% (to £109m).  But revenues in the Pure DAB radio division, which the company says “continued to experience a difficult environment in the UK and some export markets”, fell 10%, to £23.2m. Imagination Technologies’ group gross profit was up 15%, at £150.3m, and its overall gross margin increased to 88% , from 86% in 2013.

However, despite the significant increase in revenue, both adjusted and reported operating profits fell — down 28% (to £24.1m) and 99.8% (to £0.02m) respectively. The company says this was due to an increase in underlying expenses of 30% resulting from investments made in R&D, together with the full year impact of the MIPS acquisition. Adjusted and reported earnings per share also fell, down 14% (to 8.1p) and 86% (to 0.3p).

Commenting on the results, CEO Hossein Yassaie said:

The significant growth in the licensing deal closure and the growing customer base confirm the strong alignment of our technologies to the existing and emerging markets as well as our partners’ needs.

“Whilst there will continue to be fluctuations and changes in the markets in whi/ch we operate, we are confident that our comprehensive and complementary IP families, and the solution-centric IP platforms they are enabling, will allow us to take advantage of the numerous growth opportunities ahead.”

At 246p, Imagination Technologies’ share price is up 38% so far in 2014, compared with a FTSE 100 index that’s only gained 0.5%.

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Jon doesn't own shares in Imagination Technologies. The Motley Fool owns shares in Imagination Technologies.