admin/environment/php extension/gd

GD module for php5

This package provides a module for handling graphics directly from PHP scripts. It supports the PNG, JPEG, XPM formats as well as Freetype/ttf fonts.

Install GD module for php 5

Ubuntu: Download and install gd

sudo apt-get install php5-gd

You might need to restart Apache (not necessary)

sudo /etc/init.d/apache2 restart