Overview
Robust year of licensing activity across all IP families and diverse markets with significant growth in engagements for solution-centric IP platforms
New strategically important multi-year licensing deals with high volume/tier-one mobile players for both PowerVR graphics and MIPS processors
Encouraging year-on-year growth in MIPS processor unit shipments
Operating costs tightly managed resulting in lower rate of cost growth than previously guided
Business well positioned for future growth
Financial highlights
Group revenues of £177.0m (2014: £170.8m)
Technology revenues increased 7% to £158.6m (2014: £147.6m)
- Licensing revenues up 2% to £39.0m (2014: £38.3m)
- Royalty revenues up 9% to £118.9m (2014: £109.0m)
Adjusted operating profit* of £21.1m (2014: £24.0m); Reported operating loss of £8.5m (2014: £0.1m)
Adjusted earnings per share* 6.3p (2014: 8.1p); Reported loss per share 4.9p (2014: earnings 0.3p)
Business highlights
Strong licensing across all IP families, delivering highest ever licensing revenue and record backlog
- 121 licenses signed (2014: 115) with over 40 existing and new partners
- Agreements signed with partners including Ali, Atomos, Avago, Broadcom, Celeno, Elvees, Fujitsu, HiSilicon, Ineda, InfoTM, Intel, JCI, Lantiq, Loongson, MediaTek, Pioneer, Renesas, Sigma, Spreadtrum, Texas Instruments, Toshiba, Toumaz and Yokogawa
Significant increase in new committed SoCs with over 60 additional SoC design-wins which will contribute to future royalties
MIPS unit shipments increased 9% year on year to record level of 797m (2014: 729m); non-MIPS shipments stable at 530m (2014: 530m)
Pure loss reduced following the actions taken last year
Outlook
Based on the increased backlog and the active pipeline of prospects, target of 10% growth in licensing revenue in FY16
Expect growth in unit shipments and royalty revenue
Underlying operating cost growth expected to be 5% - 10%
Expansion of operating margins in medium-term with longer-term target of 30% - 40%, with a rise in profitability in FY16
Hossein Yassaie, Chief Executive, commented:
"We have seen robust licensing and royalty revenues across all three IP families whilst continuing to tightly control our costs.
"Significantly we have secured major design wins for our graphics and processor IP with new high volume mobile players - these multi-year agreements will further drive unit shipments in the medium term. Our connectivity IP continues to gain momentum.
"The established strengths and comprehensive nature of our three key IP families have enabled our unique platform capability which has significantly contributed to licensing revenues this year.
"As our revenues grow, the natural operational gearing of the business means that the financial performance is expected to significantly benefit from a slower growth in operating costs. We therefore expect to see significant expansion in operating margins in the medium-term."
