Imagination Technologies swings to profit ahead of its sale, but no progress has been made with Apple

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Imagination Technologies was a chip supplier for Apple (Source: Getty)

Imagination Technologies revealed it has returned to profit after an "exceptionally challenging" year in which it was forced to put itself up for sale.

The figures

The British tech firm said it made a profit before tax of £2.4m for the year ending 30 April after a loss of £29.4m the previous year.

The chipmaker said group revenue increased 19 per cent to £145.2m.

Shares in the company lifted 4.53 per cent to 150p in morning trading.

Why it's interesting

Imagination today said no progress has been made in its dispute with Apple after the Silicon Valley tech giant said it would not need to use the group's intellectual property in its products from 2019 onwards.

The firm's share price plummeted as much as 70 per cent after the announcement.

Last month, Imagination said it had entered a formal sale process for the group and was already in talks with potential buyers.

Preliminary discussions are ongoing with potential bidders, Imagination said.

The UK tech firm also announced it has undergone "significant" restructuring this year and successfully delivered £27.5m of cost savings.

"The management team have done a tremendous job over the last year, turning the business around, returning it to profitability and with a clear strategy for growth. It is therefore highly regrettable that this progress has been so severely impacted by the stance taken by Apple," said chairman Peter Hill.

What Imagination Technologies said

Chief executive Andrew Heath said:

Last year was exceptionally challenging but operationally we delivered a strong set of results. Our restructuring programme was implemented as planned and our focus on our core IP businesses resulted in notable progress across all three of our businesses.

We improved our financial performance across the business. We returned the business to profitability and saw good cash generation despite the outflow from the now discontinued businesses.

However, Apple's unsubstantiated assertions and the resultant dispute have forced us to change our course, despite the clear progress we have been making.

Read more: Apple hints at future plans with shock drop of Imagination Technologies