Pace plc Preliminary results for the year ended 31 December 2008
Pace announces record growth, upgrades outlook and initiates dividend
March 3 2009
Pace, the leading independent developer of digital TV technologies for the global payTV industry, announces its results for the year to 31 December 2008.
Please note Pace changed its year end to December in 2007 and acquired Royal Philips Electronics set-top box business (Pace France) in April 2008. Accordingly prior year comparatives are for 7 months only and do not include Pace France. Organic growth comparisons refer to the Pace business, excluding the addition of Pace France figures.
Financial Highlights
- Record revenues of £745.5m (seven months ended 31 December 2007: £249.9m).
- Adjusted Group profit increased significantly to £28.5m (seven months ended 31 December 2007: £15.4m). Profit before tax was £13.8m (seven months ended 31 December 2007: £15.4m).
- Organic growth saw revenues increase to £452.6m and profit before tax, amortisation of other intangibles and exceptional items to £20.1m.
- Pace France delivered a strong contribution with revenues of £292.9m and profit before tax, amortisation of other intangibles and exceptional items of £8.4m (for the period 21 April to 31 December 2008).
- Strong balance sheet with net cash of £37.7m (seven months ended 31 December 2007: net borrowings £12.1m) and new banking facilities.
- Gross margin 18.1% (seven months ended 31 December 2007: 20.3%), reflecting the increased diversification of the enlarged Group product mix.
- Basic earnings per share of 4.0p (seven months ended 31 December 2007: 6.3p), with adjusted1 earnings per share of 7.8p.
- Exceptional charges of £11.0m, including £2m costs relating to the successful Pace France integration, which will deliver future ongoing savings.
- Initiation of dividend, with full-year dividend of 0.6p recommended.
Operating Highlights
- Record operating performance
- Volume shipments increased substantially to 13.1m set-top boxes (seven months ended 31 December 2007: 2.4m), including nearly 6 million from Pace France.
- Increased market share through the Pace France acquisition and organic growth, becoming a top three global player.
- A series of high profile products were launched
- Over 20 new high definition PVR products for markets worldwide, unmatched by any competitor.
o A digital to analogue converter (DTA) for the US cable market ahead of all major competitors.
- Over 20 new high definition PVR products for markets worldwide, unmatched by any competitor.
- Winner of a 2008 Queen's Award for International Trade.
Commenting on the results, Neil Gaydon, Chief Executive Officer, said:
"Pace delivered excellent results in 2008, with record revenues and shipments. We achieved a significant increase in profits, including the first contribution from our successful Pace France acquisition and we have delivered on our strategy to become a top three player in the global payTV market. We set out our ambitions to grow Pace's market share, but we have also placed a major emphasis on building a resilient business: I am very pleased to see that this strength enabled us to deliver such strong growth against a backdrop of economic downturn.
"The payTV sector is a major focus for the Group: the service delivered by the payTV industry to consumers is one of the best value forms of home entertainment available, and the increase in availability and quality of these services, such as high definition and PVR capability, is driving rapid growth in the sector. Our focus on having the right products, at the right time, to fuel the digital TV revolution has delivered excellent results and we will continue to grow market share.
"As Pace enters 2009, the Group is in a strong position to capture new opportunities in the global shift to digital TV. Pace has seen little impact on demand for its products but continues to take a prudent and cautious view of the market, in particular, monitoring trends for any impact of the global economic climate. However, due to new business wins, customary good order visibility, foreign exchange management and global operational synergies, the Board is now able to significantly raise expectations for Pace's 2009 performance and pay a dividend."
1 - Adjusted profit before tax and amortisation of other intangibles and exceptional items.
Preliminary Results Statement - Jan. 2009
(for the year ended 31st December 2008)
(PDF, 104KB, 18 pages)
Preliminary Results Presentation - Jan. 2009
(for the year ended 31st December 2008)
(PDF, 1.12MB, 29 pages)
