Profit declined in a record revenue year for Imagination Technologies Group plc, a licensor of processor intellectual property, in its financial year to April 30, 2013.
Imagination's customers shipped 700 million units in the year, 535 million down to Imagination's established business, compared with 325 million in 2012, and 165 million units associated with MIPS in the 12 weeks since the business was acquired on Feb. 7, 2013.
Annual sales at Imagination (Kings Langley, England) were £151.5 million (about $240 million), up by 18.8 percent compared with £127.5 million (about $200 million) in the 2012 financial year. The growth in unit shipments resulted in a 49 percent growth in royalty revenue.
However, the net profit was £6.2 million (about $9.7 million) compared with £20.5 million (about $32 million) for the preceding year. Although Imagination acquired MIPS Technologies Inc. during the year only £2.7 million (about $4.2 million) was attributed to acquisition costs. The biggest factor in Imagination's reduced profit was the increase in R&D expenses. These were recorded as £84 million (about $130 million) in 2013 compared with £60 million (about $95 million) in the previous year.
During the year Imagination completed the first phase of a planned redevelopment of the company's headquarter campus in Kings Langley. The overall project is expected to complete in 2015 and will consist of three office buildings to house approximately 1,100 employees and a dedicated datacenter. The total project investment is expected to be around £65 million (about $100 million) of which £35 million (about $55 million) has now been made.
"Last year marked a number of key strategic developments by Imagination. We saw a notable jump in unit shipments and we also implemented a program of significant investment in technologies, people and infrastructure to support our five year growth program," said Sir Hossein Yassaie, CEO of Imagination, in a statement. "In particular, the MIPS integration is progressing very well and customer reaction to the acquisition and the technology roadmap has been very positive," he said, adding: "We have started the year well and are on course to see over 650 million units, excluding MIPS, shipped in the current financial year - another significant step towards our 1 billion unit shipment target in 2016."
In this case I don't think they are out of control.
Imagination has a multi-year plan of which buying MIPS was a part. It will be interesting to find out who is the entrpreneurial visionary who is going to be doing the driving there.
One problem that both ARM and Imagination now have is that they are loaded with legacy responsibilities.
There may yet be an opportunity for a new kid on the block (or an old one like AMD) to come up with a novel processor architecture that is better suited for the heterogeneous multicore era.
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