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Smartphone caution knocks Imagination Technologies

Smartphone caution knocks Imagination Technologies

Imagination Technologies (LON:IMG), the maker of the graphics chip used in the iPhone and others, took another sharp turn downward as it warned smartphone demand was slowing.

Imagination said the growth in chip shipments would be 580-630m units for the second half of its year against its previous forecast of 650mln. The total for year will now be about 1.3bn.

 “This takes into account the general slower growth trend in the higher-end smartphone shipments and also market share considerations in the low-end,“ it said.

Underlying profits in the half year to October fell to £13.2mln from £16.8mln, though revenues improved 19% to £85.2mln. Pre-tax profits fell to £2.22mln (£10.5mln). The lower profitbaility reflected a big rise in research spending.

Shares in the group have more than halved since March on fears growth may be stalling and they tumbled another 15% today.

Investec said the results missed consensus forecasts on a number of fronts, with earnings, revenues and shipments all below consensus.

“The group is in a transitional year with major licensees having pulled out of the smartphone market; others have the potential to ramp up activity, but in FY15E,” said the broker.

Shares fell 39p to 209.5p.

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Imagination Technologies Group Timeline

September 17 2014

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