11th January 2001

Imagination Technologies Group plc – Interim Management Statement

Imagination Technologies Group plc (‘Imagination’, LSE: IMG), a leading provider of System-on-Chip (SoC) Intellectual Property (IP), is today issuing its Interim Management Statement for the period from 1 May 2008 to 18 September 2008.

Following strong progress in our Technology Business particularly over the last two years, we continue to see significant and active interest in our technologies for use across both established and emerging markets. As we have commented before, the nature of our licensing arrangements with our key partners is increasingly becoming strategic with our technologies playing a key role in their product roadmaps. This was demonstrated by the recent announcement of a significant new multi-year, multi-use licensing agreement with an international electronics systems company which provides it with access to Imagination’s broad range of graphics and video IP. Additionally we have advanced engagements and negotiations with a number of new partners which see our technologies as essential for their future product roadmaps. Whilst we expect licensing revenue to continue to make progress across the year as a whole, as always it remains difficult to predict the precise timing of the closure of licensing deals.

Taking into account the formal royalty statements received from our licensing partners covering the first two months of the financial year, the increasing number of high profile end-user products incorporating our IP that are starting to ship, and the ramp up of existing products, we do expect to see good volume unit growth for the year. The actual rate of increase in volume will, of course, be influenced by consumer spending. Across the year we also expect to see the volume of products incorporating multiple Imagination IP cores, our new generation graphics SGX technology, and shipments in new markets such as TV/STB and MID to steadily increase.

PURE Digital has continued to strengthen its product offering in both existing market areas as well as in targeting new segments, notably in-car entertainment and internet connected broadcast. Our Highway in-car radio has been very well received and the PURE EVOKE Flow internet radio, with its unique portal-based user interface, has now made the internet radio proposition ready for mainstream adoption. The initial feedback on this product has been extremely positive.

Outside the UK, we are seeing real progress in countries switching from analogue to digital radio and, based on its new multi-standard product range, we expect PURE to play a strong role in these emerging markets. We anticipate that PURE’s export sales will develop and grow with these trends.

As we reported at the end of our financial year, tighter economic conditions led retailers to focus on minimising their stock holding from early on in the current calendar year which has impacted PURE revenues. We have, however, seen some pick up in demand as retailers stabilise their stock levels and start to plan the build up for the Christmas period. We believe we are very well placed in terms of product offerings and ranging with retailers for this important period although clearly the PURE Digital result for the year will be influenced by the overall consumer confidence and spending.

We remain confident that we are well placed to exploit our target markets in terms of our technology offerings and partner engagements as well as our PURE Digital products and its market presence. We are continuing to invest in research and development to ensure that we build on our position, maintain our product leadership and support our growing customer base. We expect to show further progress this financial year although, as we indicated at the time of our year end results, the extent will also be influenced by macro-economic conditions.

Imagination Technologies Group plc
Hossein Yassaie, CEO
Trevor Selby, CFO
Tel: 01923 260511

College Hill Associates
Adrian Duffield
Tel: 020 7457 2020

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