Pace ships 8.5m units in first half 2009Monday, July 27th, 2009
Pace plc Interim Results for the six months ended 3 June 2009
Pace plc (LSE:PIC) has delivered its seventh consecutive period of growth, reporting revenues of £526.5m for the half year ended 30 June 2009 (six months ended 30 June 2008: £231.1m), in line with upgraded management expectations for the full year operating performance as outlined in Pace’s trading update on 7 April 2009. During the period Pace also achieved a significant increase in adjusted4 profit before tax to £34.3m (six months ended 30 June 2008: £11.2m) and closed the period with net cash of £48.9m.
Pace has made considerable progress with its strategy to be a world leader in digital TV technology and has continued to perform well in all of its global markets, including North America and Europe, two of the world’s most valuable markets. The Group commenced shipments of HD set-top boxes to Comcast in the US and won Sky in Germany as a new HD customer. The Group’s revenues are well balanced with Pace’s business in the Americas, accounting for 47.6% of revenues and Europe and the rest of the world delivering 52.4% of revenues. Pace has built on its close customer relationships, ensuring that it is first to market in the creation of high quality products developed to an operator’s specific service and network requirements. Pace has over 100 pay TV operator customers worldwide, with over 90 different set-top box platforms delivered during the period. The Group’s customer base now includes 35 of the world’s top 100 pay TV operators.
The Group is building a new business base in Latin America, a market experiencing real momentum in digital viewing. Pace has developed an enviable customer portfolio with pay TV operators including the DIRECTV PanAmericana, Net Brazil where Pace was recently announced as launch supplier for high definition (HD) set-top boxes, Sky Mexico, Sky Central America and Sky Brazil.
Pace shipped 8.5m boxes during the period (six months ended 30 June 2008: 2.8m). The average selling price of £62 (six months ended 30 June 2008: £83) reflects the changing mix of products sold in the period and Pace’s ability to create the full range of products its customers require to evolve their services, from low-cost adapters through to powerful HD personal video recorders (PVR). Geographically Pace delivered 3m boxes into EMEA, 0.9m into Latin America, 4.2m into North America and 0.4m into Asia Pacific.
Overall high definition shipments accounted for 57% of Pace’s global revenues (six months ended 30 June 2008: 55%). Pace continues to lead in HD PVR deployments, adding three new HD PVR products as operators utilise this technology to attract and retain high-value consumers.
Forty-three per cent of revenues derive from a range of standard definition products and includes ongoing shipments of Pace’s new digital converter product for the US market. Pace secured large converter orders in 2008 and was ‘first to market’ ahead of other suppliers selected by the operator. The converters are designed to free up network bandwidth and enable cable operators to add HD services. These will, in due course, support demand for more HD set-top box products that Pace is already well positioned to provide through its growing US cable product range.
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