Strong licensing boosts Imagination Tech
(Adds details, shares, analyst reaction)
LONDON, June 24 (Reuters) - Britain's Imagination Tech , a supplier of graphics and video technology to Apple , beat expectations for full-year operating profit on Tuesday, reflecting stronger demand to license its processor blueprints.
Licensing revenue rose 32 percent to 38.3 million pounds ($65 million), towards the upper end of its forecast, while royalty revenue, which it receives on each of the 1.25 billion chips shipped by partners, rose 15 percent to 109 million pounds.
Chief Executive Hossein Yassaie said the company had seen significant growth in new licensing deals both for smartphones and new products.
Shares in Imagination, which have risen 29 percent in the last three months, were up 8.3 percent at 243 pence at 0722 GMT, the biggest riser on the FTSE mid cap index.
Analyst Lee Simpson at Jefferies, who has a "buy" rating on the stock, said Imagination was back on track as the travails of last year, when it suffered weak licensing and dropping royalty rates, ebbed.
"There will always be industry volatility but largely speaking there is still a long runway of growth to be seen across much of IMG's IP portfolio," he said.
Adjusted operating profit at the group for the year to end-April fell to 24.1 million pounds from 33.5 million a year ago, largely on an increase in operating expenses after it acquired the MIPs processor technology in 2013. ($1 = 0.5880 British Pounds) (Reporting by Paul Sandle; editing by Kate Holton)