5th Nov 2008 07:00
Pace plc Interim Management Statement and Trading Update
5 November 2008: Pace plc, the leading independent developer of digital TV technologies for the global payTV industry, is providing its Interim Management Statement and an update on performance expectations for 2008 and 2009.
Neil Gaydon, Pace plc's Chief Executive Officer commented: "Demand for Pace's products has been strong, and we are on target to meet 2008 expectations. The ongoing transition to digital TV and consumer demand for high quality home entertainment is a very positive driver for Pace's business and we expect strong revenue growth to continue in 2009. As a result of the recent fluctuation in exchange rates, the Board believes it is prudent to revise down expectations for 2009 profitability."
Interim Management Statement
The Board is pleased to report that Pace is on target to meet expectations for the year to 31 December 2008. The Company benefits from a strong balance sheet, with no gearing and positive cash balances.
Pace has continued to roll out advanced personal video recorders (PVR), high definition and standard set-top boxes for payTV operators in all major digital TV markets and, during this period, commenced shipments of its new HD PVR to MultiChoice in South Africa. The Group began shipments of its new digital to analogue converter (DTA) to Comcast in the US, a product that will enable the transition to all-digital cable networks. The integration of the Pace France business has progressed well and the Company has appointed a new President who joins in November. Pace also recently confirmed its position as a world-leader in low environmental impact (LEI) set-top boxes to ensure its customers can meet growing environmental performance requirements.
The Company has the most diverse customer portfolio in its market, and leads in high and standard definition products as the world transitions to digital TV, either through Government led analogue switch off or through consumer desire to improve the quality of home entertainment. In addition to its core product range, Pace is making good progress with its Multidweller™ product that addresses the requirement for apartment blocks to offer new triple play services without the need for costly re-wiring. Pace is also developing advanced whole home digital TV solutions for the converged world to support the long-term competitiveness of its customers.
Trading Update for 2009
Demand for Pace's products is strong and the Board is confident that revenue growth will continue in 2009. Although Pace cannot be immune from the recent abrupt and dramatic global economic events, recent consumer reports confirm the Company's experience that in an economic slow down consumers typically spend more money and time on home entertainment.
A factor beyond the Board's control is the recent significant fluctuation in exchange rates, which are having an impact across the electronics hardware industry. Therefore, despite the expected revenue growth, the Board believes it is prudent to revise down expectations for 2009 profitability.
To mitigate the impact of currency movements on 2009 performance, Pace has already embarked on a review of costs, projects and future expenditure and is maintaining its hedging programme to manage exchange rate risk during 2009 and beyond. At the same time Pace is working with its value chain to better align the balance of currency exposure between purchases and sales in the US dollar, UK pound and Euro. These measures are intended to preserve profitability, while delivering the Company's strategy and building shareholder value.
The Board is therefore positive about Pace's future and is confident in the Company's ability to manage the challenges of currency volatility and general economic uncertainty, while exploiting the ongoing growth opportunities presented by the global digital television revolution.
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About Pace plc
Pace plc (pic.l) is a leading technology developer for the global payTV industry. Pace's main focus is on creating intelligent and innovative products and services that benefit our customers and fuel the development of digital TV. Over the last 25 years, Pace has developed one of the world's most experienced specialist engineering teams and is now the partner of choice for leading payTV operators across the globe.
Pace's international headquarters are in Saltaire, West Yorkshire, UK, with further offices in France, USA, India and Hong Kong. For more information on Pace, please visit www.pace.com
Contacts
Sarah West/Jonathan Glass Helen Kettleborough
Brunswick Pace plc
+44 20 7404 5959 +44 1274 538005
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