Imagination Technologies set to post biggest ever loss as costs soar
Investors are braced for UK chip maker Imagination Technologies to report a slump in earnings this week.
The Hertfordshire-based tech firm will post its full year results tomorrow and analysts have pencilled in a £20m loss, the worst in its 30-year history.
Imagination is heavily exposed to its main customer iPhone maker Apple, and has been trying to reposition itself for market where smartphone sales are softer after years of runaway growth.
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It’s UK tech rival Arm Holdings has been making similar moves to diversify its phone-focused operations.
In May Imagination warned that revenues and losses for last year would be “materially below market expectations” as a result of renegotiating contracts and writing off two customers’ debts.
In March, Imagination announced 200 job losses as it tried to speed up the restructuring and cost-cutting programme.
Earlier this year long-time chief executive Sir Hossein Yassaie was replaced by former Rolls Royce executive Andrew Heath after shares tanked over the course of 2015 and it was relegated from the FTSE 250.
Shares have recovered somewhat this year however, up almost 50 per cent. They were boosted after it was reported Apple was in "advanced talks" to acquire the company in March.
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Shares rose by more than 17 per cent, taking to company's market cap to around £600m. However, Apple, which experienced its first sales slowdown in more than a decade in recent weeks, ruled out such a deal "at this time".