Pace remains upbeat as profits halve following natural disasters
SET-TOP box maker Pace posted a slump in profits yesterday after a year in which its supply chain was disrupted by the Japanese tsunami and Thailand floods.
The firm, which is a leading developer of products for pay television and broadband service providers, saw profits halve to $54.7 million (£34.5m) in the year to 31 December.
Two of its key suppliers – Western Digital and Seagate – suffered disruption to production of hard disks used in its range of satellite, Freeview and cable set-top boxes following the flooding in Thailand.
However, Pace said that by working closely with suppliers and customers it was able to limit the impact on earnings to $9m last year, with a hit of between $25m and $35m expected this year, mostly in the first half of 2012.
November’s warning over the Thailand floods sent shares as low as 43p, following on from previous profit warnings relating to a delayed US order and the impact of the Japanese tsunami.
The stock has recovered to 90p, but remains two-thirds below its value at the start of 2011.
Mike Pulli, who was promoted to the role of chief executive in December, said the results were in line with the company’s November guidance.
He said a strategic review had shown that Pace’s markets were “large, growing and profitable” and that the company’s products met customer needs for innovation.
The former boss of Pace Americas said: “We are firmly focused on execution and delivering a fitter, more profitable business with strong cash-flow.”