LONDON — A slowdown in sales in several regions and reduced margins at its Pure digital radio subsidiary saw pre-tax profits decline for the six months to October 31 at Imagination Technologies Group plc (Kings Langley, England), but the company says it managed to grab important licensing deals for its SoC intellectual property during the period.

Group revenues were came in at £27.2 million, up 6 percent on the corresponding period last year, with adjusted pre-tax profit down to £0.8 million from £1.8 million in 2007.

Group pre-tax profits, adjusted for share-based remuneration expenses, fell to £0.1 million, from £1.3 million last time.

Licensing and royalty revenues increased by 10 percent to £15.5 million, while Pure Digital revenues increased by just 2 percent to £11.7 million.

In licensing, Imagination said it had seen record orders for new business including six major agreements involving over 10 silicon IP core licenses along with strategically and financially important deals with two major international OEMs, and four semiconductor companies.

Licensing revenues at £9.0 million were, on a sterling basis, similar to last year, but on a US dollar basis showed an underlying 12 percent reduction.

"However this recognition of revenue does not reflect the very strong order input during the first half of over $40 million. Whilst an element of this has been recognized as revenue during the first half of the current financial year, the vast majority has been carried forward as backlog and will underpin licensing revenues over the next few years," the company said.

In the period, the number of partner chips shipped more than doubled to 41 million units and the company said its goal remained to achieve two hundred million annual unit shipments by its partners by 2010.

Royalty revenues were £6.5 million, a 23 percent increase over 2007, but this was just a 4 percent rise when adjusted for US dollar basis.

The company says the reduced royalty rate per chip has resulted from the mix currently weighted towards low-end chips incorporating single IP cores together with legacy revenue sharing arrangements with ARM for the MBX IP core in some accounts. "However, we see this reduction as a transitional phase before richer royalty flows come on stream from SoCs incorporating both newer IP cores such as POWERVR SGX and multiple IP cores, and the phasing out of the revenue sharing."

Hossein Yassaie, Imagination's chief executive, said: "A combination of this level of license orders, the doubling of our partner chip volumes to over 40 million units and the ongoing year-on-year increase in new SoC design wins are indicative of the progress we are making and a measure of the strength of our business."

Yassaie added that while the global economic slow-down had an impact on the company's rate of progress, it remained confident of continuing to make further progress in the current financial year.

Related Articles

Has Imagination added Sony to Apple consumer design win?

Samsung extends licensing deal for graphics cores

Groups back European DAB profiles initiative