Imagination Technologies Group (IMG) is prepared to admit to a disappointing first half but seems reluctant to go further despite the fact that last years adjusted half term profit of £5m has been transformed into a thumping loss of £7.3m. and the reported loss has doubled to £20m. But you must understand that this is not the fault of the board. It is because the company has been (yes – that dreaded word again) impacted both in royalty revenue and in a ramp down of customer’s legacy chip. Somewhere someone in the company will know what a customers legacy chip is.
The profit warning appears last of the 7 items in the company’s half year overview – no point in giving it too much prominence and it admits that adjusted operating profit for the year to 30th April next will be below previous expectations.
I still wonder why companies are never impacted by anything favourable. Well I dont really – it is so that the CEO and the board can take full credit for success and blame the bad times on impacts for which they hope not to be held responsible.
Despite its problems the company has a pipeline of size and quality, with the added benefit of a backlog and fundamental medium term demand drivers remain strong. I am sure that will impress them in Barnsley where they still speak something like English.
As for the poor shareholders they have been impacted by a fall in the share price from 226p to 163p in just a month and it has gone down another 8p so far this morning.
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