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Tough trading conditions and a slow down in the rate of iPhone
shipment growth will result in Imagination posting an operating
loss for the year to the end of April, it has warned.
Imagination, which licenses graphics and video processing
technology to semiconductor companies, has in recent years
struggled to ease its reliance on the iPhone and iPad maker.
The company said on Thursday it would reduce its cost base by an
extra 12.5 million pounds ($18 million) a year by 2017, on top
of the 15 million pounds cuts announced last month, by shedding
200 staff and shutting down or selling businesses.
Shares in the company, which also counts Apple as an investor,
gained 5 percent to 179.4 pence at 0835 GMT, hitting their
highest level for 3 months. The stock has lost almost a third of
its value over the last twelve months.
Liberum analysts said the new cuts should feed straight through
to Imagination's core earnings (EBIT), potentially doubling a
consensus forecast for its 2017 full-year.
As part of the initial restructuring, Imagination had flagged
150 job losses and said it would dispose of its loss-making
digital radio business Pure by the end of this year.
There was "considerable" interest in Pure, Imagination said.
For the current year, the company said revenues from royalties
and licensing continued to be in line with expectations, and
that the new measures would help its financial recovery.
(Editing by Kate Holton and Alexander Smith)
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