27th November 2007

Imagination Technologies Group Plc Interim Profits and Strong Strategic Progress


Imagination Technologies Group plc (LSE: IMG), leading provider of System-on-Chip (SoC) Intellectual Property (IP), today announces results for the six months to 30 September 2007.

Business Highlights

Licensing

  • Strong performance in securing new licenses sequential increase over last four half year periods
  • Concluded six major new license agreements including:
  • Strategically important agreements with major international OEM (Original Equipment Manufacturer), Texas Instruments for future OMAP and NEC Electronics for digital AV
  • New deals with SigmaTel and SI Electronics and numerous extensions with existing partners
  • Key areas of mobile phone, PMP (Personal Media Players), digital TV, and amusement
  • Strong pipeline of prospects

Royalties and Design Wins

  • Partner chips shipped increased to 19.1m units (H1 2006: 13.3m units)
  • Over 70 mobile phone handsets launched/shipping from Nokia, Sony Ericsson, Motorola, Sharp, NEC, Fujitsu, Mitsubishi and other key players
  • Many further models in the pipeline
  • Maintained 70% DAB market share with products from all key brands
  • Leading supplier of 3D graphics technology for in-car navigation – many design wins in Japan
  • Ultra Mobile PC (UMPC)/Mobile Internet Devices (MID), new TV and mobile TV chips approaching production

PURE Digital

  • Maintains number one overall radio supplier position in UK
  • Increased market share
  • Strong and diversifying roadmap underpins the growth
  • New range of products launched for Christmas period
  • Major products with Internet connectivity and portal support to be launched

Financials

Group revenue up 23% at £25.6m (2006: £20.8m)
Technology revenues increased 52% on a $ basis to £14.1m

  • Royalty revenue up 23% on a $ basis to £5.2m
  • Licensing revenue up 77% on a $ basis to £8.9m

PURE Digital revenues increased by 8% to £11.5m (2006: £10.6m)
Very strong order book in place for Christmas period
Gross Profit up 44% to £17.0m (2006: £11.8m), gross margin up to 66% (2006: 57%)
Continued investment with underlying R & D spend up 13% to £12.7m
Profit before tax of £1.3m (2006: Loss £2.1m)
Earnings per share of 0.6p per share (2006: loss 1.1p)
Cash balance of £8.0m as at 30 September 2007

Hossein Yassaie, CEO, commented:

“”We have continued to make significant progress in realising both our financial and strategic goals and have now achieved profitability in both our Technology and PURE businesses. We have also made excellent strategic progress with key new and existing partners. The full benefit and significance of these will become clear in the coming years.

Our technologies continue to be valued and increasingly deployed by the leading players in important consumer markets. So far we have made inroads in some of our target markets, with further progress in these and other new markets yet to come. We are more confident than ever about the future prospects and are able to see our way, within approximately three years, to multiple hundred million annual unit shipments by our partners.

Based on the active pipeline of licensing opportunities, the expected volume ramp-up in partner chip shipments and the strong position of PURE Digital, we are confident of further significant progress in the current financial year and beyond.””

Geoff Shingles, Chairman, commented:

“”This is a tremendous achievement for Hossein and his team to report continued strong progress and profitability across the Group. They have really shown perseverance and commitment over the last few years. Imagination is now well positioned to provide its key technologies to a wide variety of global consumer markets as well as continuing to develop its leading position with PURE Digital.””

Enquiries:

Imagination Technologies Group plc
Tel (today): 020 7457 2020
Tel (thereafter): 01923 260 511

Geoff Shingles, Chairman
Hossein Yassaie, CEO
Trevor Selby, CFO

College Hill

Tel: 020 7457 2020
Adrian Duffield/Ben Way

Imagination Technologies

Imagination Technologies Group plc is an international leader in the creation and licensing of semiconductor System-on-Chip Intellectual Property (SoC IP) and in the development and manufacture of DAB digital radios. The Group is headquartered in the United Kingdom, with sales and R&D offices worldwide.

Imagination’s Technology Division creates market-leading embedded graphics, video and display acceleration, multi-threaded processing and multi-standard receiver technologies, complemented by dynamic and extensive developer support programmes. These SoC IP products are licensed to a wide range of semiconductor and consumer electronics companies around the world and are being used in the following markets: digital radio and audio; mobile phone multimedia; car navigation & driver information; personal navigation; ultra mobile PC (UMPC) and mobile internet device (MID); digital TV & set top box; and mobile TV.

Imagination’s PURE Digital Division (www.pure.com) was established to develop consumer products to showcase the capabilities of Imagination’s SoC IP. As a fully integrated part of the Group, PURE has become the creator and manufacturer of the world’s most popular DAB digital radios and is the number one supplier of radios in the UK.

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