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2012 Trading Update

10th Jan 2013 07:00

RNS Number : 2159V

Pace PLC

10 January 2013

Pace plc: 2012 Trading Update

FY2012 expected to be ahead of guidance: 7.3% underlying operating margin on $2.4bn of revenue; net debt reduced by 47% in the year.

Saltaire, UK, 10 January 2013: Pace plc, a leading global developer of technologies and products for PayTV and broadband service providers, today announces the following unaudited update for the financial year ended 31 December 2012 ahead of preliminary results to be announced on 5 March 2013.

The Group performed strongly in H2; the full year results are anticipated to be ahead of the Board's previous guidance:

Record Q4 revenue has resulted in a strong finish to the year, largely driven by demand for next generation Media Server products in North America. Full year revenues expected to be around $2.4bn, 4% ahead of 2011 and of prior guidance.

Underlying operating margin expected to be 7.3%, after adjusting for the adverse impact of HDD supply disruption1, with adjusted EBITA2 of at least $157m (11% ahead of 2011).

Cash generation throughout H2 was strong, with free cash flow3 for the year expected to be not less than $175m (2011: $8.2m).

Closing net debt4 expected to be no greater than $170m (2011: $321.7m), a 47% reduction during the year (compared to a 3% increase in 2011).

We have made good progress throughout the year in the execution of our Strategic Plan:

Transform Core Economics: The continued focus on operating efficiency has delivered sustainable savings in the year, and we are well underway in the transformation of our supply chain that will deliver tangible benefits in 2013 and beyond.

PayTV Hardware Leadership: There has been high demand for Media Servers in H2 for both DIRECTV's Genie™ Advanced Whole-Home HD DVR and the XG1 for Comcast's new X1 service. We expect this technology trend to continue into 2013, and we recently announced the approval for production of DIRECTV's next generation HR44 GenieTM Media Server and C41 mini GenieTM client device.

Widen out into Software, Services and Integrated Solutions: We have achieved a number of key wins and deployments across all areas of our software and services offerings, and have a strong pipeline into next year. In particular, we are pleased to announce two standout wins:

Foxtel, the largest PayTV operator in Australia, have selected Pace to provide an integrated whole home solution consisting of Pace Media Server hardware and Pace Elements software along with Pace Systems Integration services to help deploy the solution.

BSkyB has deployed the Pace Component Management System (CMS)5 which will support its customers in the UK.

Commenting on today's announcement, Mike Pulli, CEO, said: "Pace has performed impressively in 2012 with a particularly strong second half to the year. We have made good headway on executing our strategy and Pace is becoming a more profitable, cash generative company.

We have momentum and a sustainable platform to build from, and we expect to make further progress in 2013 and beyond."

The Group will be announcing its preliminary results for the year ended 31 December 2012 on 5 March 2013.

-ends-

For further information please contact:

Andrew Dowler / Charles Chichester Roddy Murray / Chris Mather

RLM Finsbury Pace plc

+44 (0) 207 251 3801 +44 (0) 1274 538 248

1HDD supply disruption in 2012 of $76.8m to revenue and $23.1m to adjusted EBITA

2 Adjusted EBITA is operating profit before exceptional costs and amortisation of other intangibles.

3Free cash flow is calculated as cash flow before proceeds from issue of shares, dividends, acquisition cash flows and debt repayment/draw down.

4 Net debt is borrowings net of cash and cash equivalents.

5Pace CMS is part of an integrated software suite that simplifies delivery, management, and support of advanced broadband, PayTV, and connected home services and devices

This information is provided by RNS

The company news service from the London Stock Exchange

END

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