Imagination Technologies slumps as it warns over full year profit

Imagination Technologies was under pressure after the company said operating profit for the year will be below previous expectations, as it posted a wider first half loss amid a slowdown in the semiconductor market.

For the year to the end of October, the group, whose chips are used in Apple devices, reported a pre-tax loss of £22.7m from £10.7m in the same period last year as revenue dropped to £71.1m from £82.2m.

Revenue from licensing activities slid to £12.6m from £16m in the first half of 2014, while royalty revenues came in at £49.8m from £56.3m.

Chief executive Hossein Yassaie said: "Although our financial performance in the first half has been disappointing, reflecting a short-term slow-down in the overall semiconductor industry and softness in the mobile market, the fundamental medium-term demand drivers remain strong.

"Imagination has significantly strengthened its position in several key markets and in particular in mobile, automotive and TV/STB segments. The strategic license agreements secured with key players in these segments provide the backbone for significant acceleration in unit shipments with multiple 100's of million unit growth over the next 2-3 years.”

The company said it now expects costs to grow by around 2% over the year, down from a previous range of 5% and 10%, but warned that operating profit will be below previous expectations amid challenges and uncertainty in the semiconductor industry.

At 0924 GMT, Imagination shares were down 6.1% to 153.50p.