Shares in Cambridge chip designer ARM Holdings began to trek northwards
as soon as encouraging first quarter results were posted by the firm –
recently named the best East of England company of all time in Business
Weekly’s ‘Champion of Champions’ competition.
ARM saw Q1 dollar revenues rise 4 per cent year on year to $134.3m (£67.5m) to the end of March.
Chief executive Warren East said the company had made an encouraging start to 2008. “Our Q1 results demonstrate robust operational execution with sequential revenue growth in PIPD and continued strong demand for our Cortex family of microprocessors with a further seven licences signed in the quarter.
“Growth in underlying royalty revenues in both PD (Processor Division) and PIPD (Physical IP Division) of more than 20 per cent year-on-year provides further evidence of the increasing use of AM’s technology in the rapidly broadening range of consumer electronics products.”
Sterling revenues of £67.9m were 2 per cent ahead year-on-year after a 2 per cent weakening of the dollar against sterling. At the Q1 2007 effective rate, ARM’s first quarter sterling revenues this time would have been £69.1m.
Against the backdrop of growth in more sophisticated mobile phones, underlying PD royalties grew 12 per cent sequentially and 22 per cent compared to Q1 2007.
Total PIPD revenues were up 9 per cent to $9.1m, including a $0.8m of catch-up royalties. Underlying royalties were up by 20 per cent year-on-year.
Sales of development systems in Q1 2008 were $14.2m, representing 11 per cent of group revenues, compared to $13.5m in the same period last year. Service revenues were slightly higher.
Net cash at March 31 was £55.2m – up from £51.3m at December 31. During the quarter, £13m of cash was returned to shareholders through the purchase of 15 million shares. the buy-bck programme will resume very shortly.
Group order backlog at the end of the quarter remained at the record high level that was achieved in Q4 of 2007 and was up more than 20 per cent year-on-year.
ARM reports that is has won a legal battle with Nazomi Communications Inc and is pursuing ongoing litigation with Technology Properties Limited Inc. Based on independent legal advice, ARM doesn’t expect any significant liability to stem from these proceedings. The market responded positively, sending ARM’s shares 7.75p (8.76 per cent) higher to 96.25p.
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