Pace plc Interim results for the half year ended 30 June 2009
Pace delivers record financial performance in first half
July 27 2009
Financial highlights
Please note that the prior half year comparatives include 70 days of contribution from the acquisition of the set-top box business of Royal Philips Electronics (now Pace France) on 21 April 2008.
- Revenue for the period increased to £526.5m, in line with management’s upgraded expectations for 2009 (six months ended 30 June 2008: £231.1m);
- Gross margin of 17.2% for the period (six months ended 30 June 2008: 21.0%), reflecting the increased diversification of Pace’s product mix;
- Significant improvement in
- Adjusted1 operating margin to 6.5% (six months ended 30 June 2008: 5.0%);
- Adjusted1 profit before tax to £34.3m (six months ended 30 June 2008: £11.2m) and profit before tax to £31.0m (six months ended 30 June 2008: £10.5m);
- Strong net cash of £48.9m (December 2008: £37.7m);
- Adjusted1 earnings per share of 8.3p (six months ended 30 June 2008: 3.3p), with basic earnings per share of 7.5p (six months ended 30 June 2008: 3.1p);
- Directors declare an interim dividend of 0.5p per ordinary share (six months ended 30 June 2008: nil).
Operating highlights
- Demand for Pace’s products drove strong volume growth to 8.5m units (six months ended 30 June 2008: 2.8m units);
- Significant benefits delivered from continued operational improvements in project delivery and supply chain, and ongoing realisation of synergies from Pace France integration;
- Continued success in winning new customers and launching new products
- Commenced shipments of HD set-top boxes to Comcast in the US
- Sky in Germany announced as new HD customer
- Today announcing Canal Digital as the first operator customer for Pace’s MultiDweller™ technology2
- Achieved meaningful market position in fast growing Latin American market
- Commenced shipments of HD set-top boxes to Comcast in the US
- 2009 Queen’s Award for Enterprise in Innovation recognised Pace’s success in high definition TV technology.
Commenting on the results, Neil Gaydon, Chief Executive Officer, said:
“We are extremely pleased with our half year results as the Pace Group continues to consistently deliver against its customer, technology and product strategies. We signalled significant upgrades to management’s expectations for the full year and with strong half year results we are firmly on track.
“Pace is taking full advantage of the growing global demand for our products and technologies in digital payTV markets, which, when coupled with our scale and excellent operational execution is enabling us to grow operating margins. The 6.5% adjusted operating margin achieved in the first half of 2009 puts us on track for our 8% medium term target.
“We expect our strong performance to continue during the second half, and with good order visibility we are confident in our ability to deliver against management’s expectations for the full year.”
Outlook
Demand for Pace’s products and technologies continues to present considerable opportunities across global payTV markets. Pace’s strategy and its proven operating model is enabling the Group to capitalise on these opportunities, despite current difficult macro economic conditions.
It is expected that Pace’s average selling prices will increase in the second half of 2009 when compared to the first half as a result of the shift in product mix, while margin performance will remain at a similar level to the first half. Given these conditions and good order visibility, the Board remains confident that Pace is on track to meet management expectations for the full year 2009.
1 Adjusted is before amortisation of other intangibles. The comparator for 2008 is before exceptionals.
2 Canal Digital is part of Telenor Broadcast, the leading provider of television and broadcasting services to households and enterprises in the Nordic region.
Please download the full Interim Results statement from, www.pace.com/companyreports
