Pace boxing clever with record profits
TV SET-TOP box maker Pace enjoyed record results in the first half of the year and has predicted its strong sales will continue.
With a full contribution from its acquisition of the set-top box business of Royal Philips Electronics, which was completed in April 2008, Pace saw pre-tax profits of £34.3m in the six months to June 30 compared to £11.2m for the same period the previous year.
Sales more than doubled to £526.5m against £231.1m last year as Pace shipped 8.5m boxes during the period compared to 2.8m a year earlier.
The group said that its gross margin had reduced from 21% to 17.2% reflecting the “increased diversification” of its product mix but operating margin had improved to 6.5% from 5%.
The group had net cash of £48.9m at the half year and is paying an interim dividend of 0.5p.
Pace said that its sales in Latin America are growing while French broadcaster Canal Digital has become the first operator customer for Pace’s MultiDweller technology that allows interactive digital services to be provided to customers in apartment blocks without the need for costly rewiring.
Chief executive Neil Gaydon, said: “We are extremely pleased with our half year results as the Pace Group continues to consistently deliver against its customer, technology and product strategies. We signalled significant upgrades to management’s expectations for the full year and with strong half year results we are firmly on track.
“Pace is taking full advantage of the growing global demand for our products and technologies in digital payTV markets, which, when coupled with our scale and excellent operational execution is enabling us to grow operating margins. The 6.5% adjusted operating margin achieved in the first half of 2009 puts us on track for our 8% medium term target.
“We expect our strong performance to continue during the second half, and with good order visibility we are confident in our ability to deliver against management’s expectations for the full year.”
