Pace plc Interim Management Statement

Pace plc Interim Management Statement

Saltaire, UK, 28 October 2010: Pace plc, the leading independent developer of digital TV technologies for the global payTV industry, is providing its second Interim Management Statement for the 2010 financial year for the four months since 30 June 2010.

Pace has continued to deliver on its strategy within the payTV market and has performed well with the Group experiencing strong demand for its products and technologies. Revenues and volume deliveries have tracked to plan as operators continue to grow their high definition services as well as introduce new ones such as 3D, 'over-the-top' style on demand content and inter-connected multiroom TV. At the same time Pace has continued to successfully manage ongoing component supply constraints currently being experienced in the industry. As a result the Board is confident in its outlook for the year to 31 December 2010.

On 20 October 2010, Pace announced completion of the acquisition of 2Wire Inc, a leading provider of advanced residential gateways and associated software and services for the broadband service provider market. On completion of the acquisition, Pace moved into a net debt position, retaining a strong balance sheet with a robust financial position. 2Wire trading in the second half of the financial year to date has been in line with expectations.

The 2Wire acquisition widens out Pace's US customer base, extends the company's market opportunity beyond cable and satellite to include the telco market, and accelerates the company's leadership in enabling managed converged home entertainment services. An integration programme is already underway to deliver on Pace's estimate of run-rate pre-tax cost synergies of $30m. The acquisition costs for both the 2Wire and Bewan businesses, along with the majority of the costs to achieve the 2Wire synergies, will result in an exceptional charge for the 2010 financial year.

Neil Gaydon, CEO of Pace, commented: "Our consistent delivery against a clear strategy has enabled Pace to deliver excellent operational performance, building further on our market leadership position. Pace remains on track to deliver a second half performance as strong as the first half.

"With the acquisition of 2Wire we have not only extended our customer base beyond cable and satellite to the telco market, but further widened our technology capability. The global market continues to evolve: we have now built a unique vantage point from which to partner with operators as they develop the next generation of interconnected home entertainment and broadband services.

"Our immediate focus is on the integration of 2Wire into the Pace Group, whilst continuing to grow our core business. We are confident that the powerful combination of Pace and 2Wire will deliver enhanced returns for our shareholders, deepen customer relationships and strengthen our leadership position."

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For further information, please contact:

Pace plc +44 (0) 1274 532000

Helen Kettleborough

Brunswick Group LLP + 44 (0) 207 404 5959

Jonathan Glass/Aideen Lee