14th Nov 2013 09:44
LONDON (Alliance News) - Pace PLC said Thursday that its trading performance progressed well in the third quarter, driven by continued momentum across the business.
Pace said that key wins achieved during the period have boosted the firms' confidence for its 2014, with project delivery for the new contracts already underway and underlying demand across the business remaining strong.
In its interim management statement for the third quarter, Pace said that while revenue for the period was lower, this had been anticipated, and is a reflection of the impact of dual-sourcing of Media Server supply by a large North American satellite customer. The firm expects full-year revenues to be broadly in line with 2012 figures.
The PayTV and broadband service technology developer also said that gross margins during the period benefited from improved revenue mix and procurement savings after the firm made improvements to its supply chain effectiveness. Operating costs during the period are down on the comparable period in 2012. The firm notes that operating margin for the full-year is expected to be greater than 7.5%.
Adjusted earnings before interest, taxes, depreciation, and amortization and return on sales were higher than the same period in 2012, despite the lower revenue, which Pace said reflects the firm's progress toward improved medium term profitability. Cash flow during the quarter was strong following the completion of the Electronic Manufacturing Services partner consolidation, working capital has also been further reduced, with Pace now in a net cash position - a position it expects to retain in its full-year results.
Pace CEO, Mike Pulli, is confident of the firm's trajectory and believes that further progress will be made next year after closing the year in a strong position. He said, "The transformation of our supply chain is nearly complete and we are seeing meaningful benefits both operationally and financially. Wins with tier one customers reinforce our leadership position in PayTV hardware and our strategy of widening out our products and services continues to build momentum with wins and deployments across all of the regions we operate in."
Commenting on the USD310 million conditional agreement for the acquisition of Aurora, expected to close at the end of the fourth quarter 2013, Pulli said, "The acquisition of Aurora represents an important step in the evolution of Pace and enhances our strategy to widen out and build a broader platform from which to drive revenue. Acquiring Aurora will allow Pace to expand beyond our core business and build deeper and more embedded relationships with our customers, which the Company believes will strengthen Pace's position as a market leading solutions provider for the PayTV and broadband industries."
Shares in Pace were down 2.75% to 297.00 pence per share Thursday morning.
By Alice Attwood; [email protected]; @AliceAtAlliance
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