LONDON A steep decline in licensing revenues saw revenues at Imagination Technologies Group plc decline for the half year ended September, even though the licensable circuit developer and IP group increased royalty revenues by over 200 percent over the corresponding period last year.
Interim losses also widened, which the company said was due to a slowdown in new licensing agreements.
However, Imagination (Kings Langley, England), whose software is used in chips for digital radios and television equipment, games consoles and mobile phones, said its licensing pipeline was "very encouraging".
Group revenues for the six months dropped from £13.1 million ($22.6 million) to £12.8 million ($22 million), while losses before tax widened to £ £4.8 million ($8.2 million) from £2.9 million ($5 million) in the corresponding period in 2004. The company says the pre-tax losses reflected the 10 percent increase in R&D spending and the cost of sales, including establishing a new sales activity for the technology business in the U.S.
The company said it expects “significant revenue growth” in the second half of this financial year compared with last year. It sees good opportunities in digital radio and car navigation markets and, in the near future, from LCD TV shipments, following recent deals with Sharp.
On the digital radio front, Imagination said that its shareholding in Frontier Silicon has been restated under new reporting rules, with its investment increasing from a cost of £600,000 ($1 million) to a ‘fair value’ of £6.2 million ($10.7 million).
Royalty revenues tripled to £1.5 million ($2.6 million) during the period reported thanks to the launch of three handsets containing the company's graphics chips in Japan and Korea.
Revenues from licensing were down 31 percent in the period to £4 million ($6.9 million).