Imagination’s profit falls due to order delays

IMAGINATION Technologies, the British firm that designs graphics chips for smartphones including Apple’s iPhone, saw its full-year profit dip, as the market had expected after a warning last month.

Imagination posted adjusted pre-tax profit of £34.3m in the year to the end of April, down from £36.8m a year ago, on revenue up 19 per cent to £151.5m.

Analysts were expecting about £32m on the bottom line after they slashed forecasts by nearly £10m last month, when the group said it had seen delays in signing licensing deals in the second half.

The FTSE 250-listed company has suffered as a number of its chipmaking customers, such as Renesas and Texas Instruments, have shifted their focus away from smartphones and tablets.

To add to the challenges, Imagination’s competitor ARM has been winning market share in next generation smartphones, mobile computers and digital TVs.

Imagination said it had made a good start to the new year, and was on course to see its partners ship more than 650 million chips containing its technology this year.

“Last year marked a number of key strategic developments by Imagination,” said chief executive Hossein Yassaie. “We saw a notable jump in unit shipments and we also implemented a programme of significant investment in technologies, people and infrastructure to support our five year growth programme.”

Imagination’s share price closed 6.2 per cent higher at 324.2p.