Pace PLC (PIC) - Interim Management Statement
RNS Number : 0393R
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
· 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
· 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.
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."
For further information please contact:
Andrew Dowler / James Fearnley Roddy
Murray / Chris Mather
+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
IMSBLBDBRXBBGDX -0- Nov/14/2012 07:00 GMT
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