Imagination: Year end trading update, Apple dispute resolution procedure and planned sale of MIPS and Ensigma

May 4, 2017 -- Imagination Technologies Group plc (LSE: IMG, “Imagination”, “the Group”), a leading multimedia, processor and communications technology company, publishes a trading update for the year to 30 April 2017, has commenced a dispute resolution procedure with Apple Inc. (“Apple”) and announces that it intends to sell its MIPS and Ensigma businesses.

Trading update

The Group finished the financial year strongly with the results expected to be in line with the Board’s expectations, reflecting the positive effects of the restructuring implemented during the last 15 months as well as a focus on Imagination’s new priorities.

Dispute resolution procedure

As announced on 3 April 2017, the Group is in discussions with Apple regarding its commercial relationship.

Imagination has been unable to make satisfactory progress with Apple to date regarding alternative commercial arrangements for the current licence and royalty agreement.

Imagination has therefore commenced the dispute resolution procedure under the licence agreement with a view to reaching an agreement through a more structured process.

Imagination has reserved all its rights in respect of Apple’s unauthorised use of Imagination’s confidential information and Imagination’s intellectual property rights.

Operational update and proposed disposal of MIPS and Ensigma

Since 3 April 2017, the Board has reviewed the composition of the business.

While the Group has continued to invest in its MIPS and Ensigma businesses, it has now decided to actively market these businesses for sale, concentrate its resources on PowerVR, and strengthen Imagination’s balance sheet.

MIPS is focused on the embedded processor markets, where it has a strong position, and completed a number of deals with major customers during the last financial year. It has continued to see design wins in networking, routers and DTV/STB and has made good progress in the mobile LTE modem and industrial IoT markets.

MIPS also has a growing position in automotive through its relationship with Mobileye and is collaborating with a number of OEMs and Tier 1 suppliers.

Ensigma offers leading, comprehensive IP licensing for connectivity in mobile computing, unmanned systems and IoT, with low power capability. Revenues more than doubled in H1 FY17 driven by strong licencing activity. This momentum has been maintained.

MIPS and Ensigma have complementary capabilities in low power, connected devices providing end to end customer solutions with a strong security solution.

PowerVR

Imagination’s market leading PowerVR business continues to address attractive growth markets.

The Group has recently launched its new PowerVR offerings in both the high-end XT and mid-range XE families, representing significant competitive advances in the PowerVR architecture.

With continued investment, the Group considers PowerVR to be well placed in mobile, automotive, digital TV/set top boxes and the rapidly emerging AR/VR market and having the potential to exploit investments for artificial intelligence in the medium-term. Imagination will continue to make the appropriate investments in the PowerVR business.

The Group expects to publish its year end results the week commencing 3 July 2017.

This announcement contains inside information.

There will be a conference call for analysts and investors at 8:30am UK time today.

Please contact Jessica Bennett for conference call details: jessica.bennett@instinctif.com

About Imagination

Imagination is a global technology leader whose products touch the lives of billions of people across the globe. The company’s broad range of silicon IP (intellectual property) includes the key processing blocks needed to create the SoCs (Systems on Chips) that power all mobile, consumer and embedded electronics. Its unique multimedia, processor and connectivity technologies enable its customers get to market quickly with complete and highly differentiated SoC platforms. Imagination’s licensees include many of the world’s leading semiconductor manufacturers, network operators and OEMs/ODMs who are creating some of the world’s most iconic products. See: www.imgtec.com.