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Pace PLC PIC Interim Management Statement



  Pace PLC (PIC) - Interim Management Statement

RNS Number : 0393R
Pace PLC
14 November 2012
 



14 November 2012

                    Pace plc: Interim Management Statement

Saltaire, UK,  14 November  2012:  Pace plc,  a  leading global  developer  of 
technologies and products  for PayTV  and broadband  service providers,  today 
announces its Interim Management  Statement for the period  1 July 2012 to  13 
November 2012 ("period").

 

Trading Update and progress against Strategic Plan

Revenues in the period were in line with management expectations and ahead  of 
last year,  driven  largely  by the  launch  of  and strong  demand  for  next 
generation Media Server  products in North  America. We expect  revenue in  H2 
2012 to be around $180m (16%) higher than H2 2011.

The PayTV market continues to  show resilience despite the uncertain  economic 
conditions and  previously feared  disruptive  threats from  new  Over-the-Top 
(OTT) market entrants. Our major customers have performed well with  sustained 
consumer demand and strong profitability.

In the period, we have  made good progress on  the execution of our  Strategic 
Plan, which was laid out in November 2011:

Transform Core Economics:

·    Completed recovery from the Hard Disk Drive (HDD) supply issues, with  no 
impact to revenue or EBITA in H2 2012.

·     Continued  focus   on  operational  efficiency   has  resulted  in   the 
rationalisation of  development facilities  in India  from four  sites to  one 
which will deliver overhead savings in 2013.

·    The  rationalisation  of  our Electronics  Manufacturing  Services  (EMS) 
partners is progressing well and negotiations are at an advanced stage to move
to two primary EMS partners by the end of H1 2013.

·    Cash generation in the period has been strong and further debt  reduction 
has been achieved.

 

Leadership in PayTV hardware:

·    In the US, demand has been strong for Media Server products including the
XG1 for Comcast's new X1 service  and DIRECTV's Genie™ Advanced Whole-Home  HD 
DVR. Further Media  Server design wins  and a strong  global pipeline  confirm 
Pace's role in leading  the evolution of  the device in  the home for  service 
providers.

·    Pace was confirmed as a licensee of the Comcast Reference Development Kit
(RDK) and  was instrumental  in the  launch of  the first  product (XG1  Media 
Server) on this platform.

·    Building on  our global partnership  with TiVo that  was announced in  H1 
2012, Pace is  now ready to  launch field trials  with an integrated  solution 
porting TiVo's  software to  Pace's  set-top boxes  and gateways,  which  will 
enable us to pursue significant worldwide opportunities during 2013. 

 

Widen out into software, services and integrated solutions:

·    The  need for  operators  to support  consumers within  the  increasingly 
complex connected home environment is driving strong demand for our Management
Systems software and services, with wins in Europe, Asia Pacific and a  strong 
global pipeline.

·    Our integrated STB  solution is gaining further  traction in the  growing 
Indian cable market and we now have five operators deploying this solution.

·    Our Latens Conditional Access business reached the significant  milestone 
of being  deployed  on 2  million  STBs across  the  world, and  achieved  two 
significant wins in Asia in the period.

 

Outlook

The outlook for the remainder of the year has improved;

·    2012 revenues  now expected  to be flat  on 2011  actuals (2%  underlying 
growth before the impact of HDD supply disruption).

·    No impact from the HDD supply  disruption on revenue or EBITA in H2  2012 
(previously expected to be $4 million impact on EBITA).

·    Operating margin for 2012 will be  greater than 7% (before the impact  of 
HDD supply disruption).

·    Strong cash flow generation will continue, with net debt now expected  to 
be below $200m at the end of the year.

 

Commenting on today's announcement,  Mike Pulli, CEO,  said:  "We continue  to 
make good progress in executing our  strategy and becoming a more  profitable, 
cash generative company with a broader commercial opportunity.

We have  made significant  steps  in transforming  our  supply chain  and  the 
continued focus on  operational improvement will  deliver further  operational 
savings in 2013. The demand we  are seeing for our innovative next  generation 
Media Server products  underpins our  strong revenue  growth in  H2 2012.  Our 
widening out strategy continues  to build momentum  with wins and  deployments 
across the globe. As a result we have further invested in these growth areas.

We are confident about our trajectory  and remain firmly focused on  execution 
in the remainder of the year and beyond."

-ends-

For further information please contact:

 

Andrew  Dowler  /  James  Fearnley                                       Roddy 
Murray / Chris Mather

RLM    Finsbury                                                                
Pace plc

+44 (0) 207 251 3801                                                       +44 
(0) 1274 537 002

 

 

 

 

                     This information is provided by RNS
           The company news service from the London Stock Exchange
 
END
 
 
IMSBLBDBRXBBGDX -0- Nov/14/2012 07:00 GMT
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