Imagination Technologies swings to profit, says no progress in Apple dispute

Imagination Technologies has swung to a pre-tax profit for the year to the end of April as it remains in talks with potential buyers for the company.

The group swung to a profit of £2.4m versus a £29.4m loss the year before, as revenue rose 19% to £145.2m.

The company announced back in May that it was putting two of its three core businesses up for sale after its largest customer, Apple, decided to stop using its technology in new products. Imagination, which is currently in dispute with Apple over infringement of intellectual property rights, said on Tuesday that it was engaged in preliminary discussions with potential bidders.

It added that it has made no progress in its dispute with Apple.

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. Initially we elected to sell the now much stronger MIPS and Ensigma businesses in order to strengthen our balance sheet and concentrate our resources on PowerVR. Additionally, we have received interest from a number of parties for the whole Group - reflecting the real quality and strategic value of our businesses and the associated IP. We therefore initiated a formal sale process, which is ongoing.”

At 0806 BST, the shares were down 6.4% to 143.50p.