28th Jul 2015 07:42
LONDON (Alliance News) - Set-top TV box maker Pace PLC on Tuesday posted a rise in pretax profit for its first half, and expressed confidence in making further progress in the second half of 2015 and beyond, ahead of its agreed takeover by the US's Arris Group Inc.
Pace agreed to a USD1.4 billion takeover offer from NASDAQ-listed broadband equipment maker Arris in April. Pace said the transaction is progressing in line with expectations, and it expects to complete it in the fourth quarter of 2015.
The company posted a pretax profit of USD85.1 million for the half year to end-June, up from USD72.0 million a year before, as a decline in revenue to USD1.08 billion from USD1.14 billion was offset by lower cost of sales and research and administrative costs. The company attributed its increasing operating profit to an improved product mix, supply chain efficiency and increased operational efficiency.
Pace blamed its fall in revenue on challenging economic conditions, the strength of the dollar, and industry consolidation reducing demand in a number of regions.
It said it expects to see strong revenue growth in its second half, driven by new product launches and increased demand for existing products from key customers across a number of regions.
Pace expects revenue in the range of USD2.65 billion to USD2.72 billion for its full year, with adjusted earnings before interest, tax and amortisation expected to be around USD255 million, compared to USD241.1 million a year before.
Pace said that, in view of its proposed takeover by Arris, it does not intend to recommend the payment of any further dividends at this time.
"Whilst we are focused on closing the transaction with Arris, we continue to make good progress on executing our strategy as a standalone entity; key wins, deployments and increasing demand coupled with ongoing operational improvements give us confidence that we will maintain our momentum and make further progress in the second half of 2015 and beyond," said Chief Executive Officer Mike Pulli in a statement.
Shares in Pace are trading up 0.2% at 361.60 pence Tuesday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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