Profits at graphic chips specialists Imagination Technologies have surged on the back of strong royalty revenue growth and a return to profitability at its digital radio business, PURE.
Royalty revenues soared 72 per cent year on year to £11.1m, with the number of 'partner' chips containing Imagination's intellectual property rising 33 per cent to 54m units. The average royalty per chip has also increased to 34¢ (21p) from 26¢ a year ago. Chief financial officer Trevor Selby reaffirmed that Imagination is on track to hit 200m shipments by the next financial year. That has helped mitigate against weaker licence sales, which grew just 2 per cent to £9.3m due to the tougher semiconductor climate. Mr Selby cautions about the lumpy nature of the licensing side, but adds that the business typically enjoys a stronger second half. He also expects growth in the semiconductor sector next year.
Meanwhile, PURE's sales grew 52 per cent to £17.8m. This was fuelled by a return to normal levels of sales in the UK - where revenues grew 25 per cent - and the continued adoption of digital radio in the rest of the world. In fact, international sales trebled to £5.4m and Mr Selby says they will continue to grow going forward.
Analysts at broker Panmure Gordon expects full-year EPS of 4.16p (1.46p in 2009), rising to 10.63p in 2011.
| ORD PRICE: | 224p | MARKET VALUE: | £537m | |
| TOUCH: | 224-226p | 12-MONTH HIGH: | 250p | LOW:34p |
| DIVIDEND YIELD: | nil | PE RATIO: | 35 | |
| NET ASSET VALUE: | 24p | NET CASH: | £22m | |
| Half-year to 31 Oct | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2008 | 27.2 | 0.09 | nil | nil |
| 2009 | 38.2 | 3.85 | 2.6 | nil |
| % change | +40 | +4,179 | - | - |
Ex-div: - Payment: - | ||||
