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Barr Ellison Solicitors – commercial property
1 February, 2006 - 11:39 By Staff Reporter

ARM targets further growth through R&D

Chip designer ARM delivered full-year results ahead of forecasts and confirmed that its revenues would grow at about 15 per cent in 2006, in line with previous guidance.Chip designer ARM delivered full-year results ahead of forecasts and confirmed that its revenues would grow at about 15 per cent in 2006, in line with previous guidance. The company said that the positive effects from its 2004 merger with Artisan were now being felt, boosting licensing and royalty income in particular.

The Cambridge headquartered company, which designs chips for iPods, mobile phones and a host of other consumer electronics devices, posted full-year revenues of £232.4m, up 14 per cent on the previous year. Pre-tax profits came in at £81.3m for the year to December 31 2005.

ARM upped its spending on R&D in a bid to drive sustained revenue growth, spending just over a quarter of revenues (£60.1m) in the area.

CFO, Tim Score said: “We have grown revenues at twice the rate of the semiconductor industry, achieved operating margins healthily in excess of 30 per cent and seen volumes of ARM powered products grow by more than 30 per cent year-on-year to 1.66 billion units.

“Notwithstanding the 20 per cent increase in R&D expenditure to drive expected strong

revenue growth, a 24 per cent increase in earnings per share has enabled us to return more cash to shareholders via our progressive dividend policy and the ongoing share buyback program that we introduced during the year.”

ARM is preeminent in the mobile phone market, but is trying to diversify into other vertical markets. Encouragingly, unit shipments in the non-mobile segments gew by 46 per cent. This growth was achieved through the launch of ARM powered hard disk drives, games consoles, Wi-Fi chipsets and automotive products.

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