In order to give our shareholders an update on our trading we are announcing prior to the close of our year end on 31 March 2003 that since announcing our interim results in November 2002, we have continued to make significant progress in licensing our range of technologies from our PowerVR, Metagence and Ensigma divisions to industry leading partners. This progress has been made despite industry conditions remaining tight. This increased business activity results from our strategy to provide a broad range of complementary and market-leading IP cores covering graphics, video, audio, broadcast, and communication for System-on-Chip (‘SoC’) applications. It also reflects the direct relevance of our IP to a number of growing and emerging markets.
During the second half, licensing and customisation business totalling approximately £9m ($14m) was closed which represents a significant increase over the first half. This has been achieved through concluding, during the second half, four major licensing contracts out of the eight advanced engagements mentioned in our interim statement. In addition to licensing agreements with Sharp and Hitachi Mobile, announced in January and February 2003, we have recently concluded two further licensing agreements, one involving a new partner and one an extension with an existing partner. Further information on these new licensing agreements will be provided as soon as announcement details are agreed with the relevant partners.
As well as increasing our partner base, we are also succeeding in broadening the markets being addressed by our partners with our technology. In addition to our partners’ SoC integrated circuits currently shipping in digital radio, slot machines and arcade, we now have committed SoC projects in development by our partners across digital TV, PDA, in-car navigation/entertainment, and mobile phone markets. We expect that royalty revenue flows, which are presently modest, will start to increase as these products come to market through 2003 and 2004.
Cash receipts from the new technology licensing business closed during second half have stabilised our cash position with the cash balance at March being above the September 2002 figure of £5.3m.
This increase in business level has also resulted in a 90% growth in our technology revenues in the second half of this financial year over the first half. In addition as the DAB market has continued to develop strongly, we have seen substantial revenue growth in the second half from our range of digital radio products, including the £99 EVOKE-1, marketed by our PURE Digital division and based on our META and Ensigma technologies. The result is that the expected improvement in our second half financial performance has materialised with the second half losses significantly reduced compared with the first half and the business progressing towards break-even for the six-month period.
Imagination Technologies’ preliminary results will be announced on May 19th 2003.