Imagination Tech CEO
steps down; warns of operating loss
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[February 08, 2016]
By Paul Sandle
LONDON (Reuters) - Imagination
Technologies, a supplier of graphics technology to Apple, said its chief
executive Hossein Yassaie had quit, departing as the British company
warned it would make an operating loss this year.
Non-executive director Andrew Heath had been appointed interim chief
executive, the company said on Monday, adding that it would take
steps to cut operating costs, including the sale of its loss-making
digital radio business Pure.
Shares in Imagination, which licenses its graphics and video
processing technology to semiconductor companies, have slumped by
more than 80 percent since 2012 as it struggled to ease its reliance
on the iPhone and iPad maker.
They fell as much as 16 percent in early trade on Monday to 108
pence, giving the group a market capitalization of 300 million
pounds ($436 million).
The company, which counts Apple as an investor, said the market
slowdown it saw in December had persisted, and had been reinforced
by uncertainty about trading prospects with China.
It also said royalties from some key customers had fallen short of
expectations in the final quarter of 2015, and license sales were
Apple reported its slowest-ever increase in iPhone shipments last
month and forecast its first revenue drop in 13 years. Its rival
Samsung Electronics has also warned of softer sales of gadgets such
Imagination chairman Bert Nordberg said "trading conditions
continued to be very demanding", as the group said it expected to
report an operating loss for the year to end-April.
Analyst had expected an operating profit of 8.85 million pounds,
according to Thomson Reuters data.
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Yassaie took steps to widen Imagination's product line up by buying
the MIPS processing platform in 2012 for $100 million, but heavy
investment has not paid off in customer orders. He also persevered
with its Pure digital radio business, despite it repeatedly failing
to break into the black.
The company said on Monday it would sell Pure and reduce total
operating costs by 15 million pounds in its next financial year by
focusing on its core multimedia product.
Yassaie, who was knighted by Britain three years ago for services to
technology, said he was proud of helping build Imagination from
small beginnings into a leading provider of graphics processors.
"It's now time for someone else to lead this great company," he
(Editing by Kate Holton; editing by Adrian Croft)
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