The maker of Pure digital radios has decided to sell the business and parted company with its longtime chief executive, Sir Hossein Yassaie, after warning that it would suffer a loss this year.
Imagination Technologies, which also makes microchips for companies such as Apple, said Yassaie had stepped down with immediate effect after it issued its second profit warning in two months. It will sell Pure, whose radios feature in many British kitchens, as part of a restructuring plan to save £15m a year.
When Imagination announced half-year results in December, it warned that annual profit would miss market expectations because of weaker demand for smartphones containing its chips but it predicted business would pick up in the second half.
In a trading update, Imagination said conditions had got worse and that it now expects a loss for the year ending in April. Its shares, which have almost halved in the past year, tumbled 16% in early trading and were down 1.5% at 130p by mid-morning on Monday.
The company blamed a slowdown in sales of microchips reinforced by concerns about trading prospects in China for its woes. Royalty payments from some large customers fell short of expectations in the final three months of 2015 and forecasts have been reduced for the first quarter of this year.
Imagination said two weeks ago it was reviewing its options for Pure, which Yassaie launched in 2002 to capitalise on the development of digital radio. The business, originally conceived to showcase Imagination’s chip technology, has sold more than 5m radios.
The company said: “There are potentially more appropriate owners for Pure, given the economies of scale in the consumer electronics market, who will be able to leverage its leading technologies and brand. Imagination will treat the Pure division as a discontinued operation with immediate effect.”
Yassaie moved to Britain in 1976 and completed a PhD in electronics at Birmingham University. After working at other technology companies he joined Imagination in 1992 and became chief executive in 1998. He received a knighthood in the 2013 honours list for services to technology and innovation.
Bert Nordberg, Imagination’s chairman, said: “Through Hossein’s vision and drive, the group has become a global technology leader. His many notable achievements include the development of graphics and video processors for smartphones, gaming devices, TVs and the automotive industry, and the introduction of digital radios as a mainstream product.”
Andrew Heath, a non-executive director, has taken over as chief executive while Imagination looks for a new boss.
