In the last quarter of this financial year (Jan-March 2002) we have seen real progress in partners committing to a range of our technologies as they begin to finalise the next round of their product developments. This indicates that the tight market conditions during the second and third quarters, which were extending the sales cycle with prospective licensing partners, are showing signs of improvement.
In this last quarter, we have closed significant new licensing and customisation contracts totalling approximately £7m ($10m) for our technologies covering the PowerVR MBX, MPEG, and related cores as well as the META multi-threaded DSP and Ensigma communication and audio offerings. As usual, details of our partnerships will be announced in line with the market requirements of our partners. We expect these new partnerships to lead to our technologies being utilised in digital TV, amusement, in-car entertainment/navigation, mobile and wireless applications. The majority of the revenue and cash associated with these agreements will come through in the 2002/3 financial year with royalty revenue streams following.
In the second half to March 2002, revenues and margins are expected to be similar to the first half, reflecting the difficult conditions for closing business during most of 2001/2 financial year. Royalty revenue in the second half has been adversely affected by the uncertainty on the PC side, with this weakness being offset by improved licensing and development income from our now more diverse business. Whilst conditions have been tight we have continued the strategic R & D investment in our technologies with the addition of the CodeScape tool team in September to support our revolutionary META multi-threaded DSP processor core activities.
Against this background we will close the year with net cash balances in excess of £8m.
Interest in our embedded PowerVR graphics and video cores for entertainment, in-car and mobile applications is growing and we believe that the PowerVR MBX family of cores is an increasingly strong proposition for exploitation, both directly and through our partnership with ARM, with semiconductor and system companies.
We have made real progress in exploiting our META and Ensigma technologies in digital radio and audio applications where we have secured a strong market position and growing customer interest. Further implementations of our META core in conjunction with our DVB (free-to-air digital TV) technologies are currently being developed through our partnership with Frontier Silicon for highly integrated and versatile digital TV/home entertainment System-On-Chip devices. These devices are receiving strong interest from global consumer equipment manufacturers.
The decision of STMicroelectronics (ST) to seek a buyer for its PC activities has adversely impacted our trading in the second half. As we stated in our recent announcement, there has been and continues to be discussion with interested parties. We will update shareholders with any further developments. The bandwidth efficient nature of PowerVR technology makes it ideal for both high-end and integrated graphics PC solutions as well as game console systems. Our relationship with ST remains strong with on-going collaboration in the set-top box market and, more recently, for mobile multimedia applications.
With our expanding range of off-the-shelf PowerVR, META and Ensigma IP cores, we will continue to invest in building our business development infrastructure to effectively promote these leading technologies. In particular this will include setting up a Japanese office during the first half of 2002/3 to service the growing customer base and the strong interest from Japanese and Far East companies in our technologies.
Whilst there are some signs of improvement, conditions in our industry remain tight. Prospects for our broadening range of IP are strengthening and, very encouragingly, in this quarter we have seen partners committing to license our technologies. The significant business closed in the fourth quarter secures new revenue streams and gives us confidence of further licence deals that will lead to an improved financial performance during the next financial year.
Imagination will be announcing preliminary results for the year ended 31 March 2002 on Tuesday 28 May 2002. An analyst presentation will be held on that day at 9.30am at College Hill Associates, 78 Cannon Street, London EC4.