Cube customer picks up the Pace...
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UK DTV Rollout Fuels Pace Earnings
1/12/00 Europe's largest digital set top box manufacturer, Pace Micro Technology (London), posted a 53% increase in profits for the latest quarter (ended December 4, 1999).
The company reported profit before tax and exceptional items of £12.7 million (US$20.8 million), up from £8.3 million (US$13.6 million) for the same period in 1998. Business within the UK represented over 90% of Pace's revenues, and the company was able to take advantage of the launch of free set-top boxes by BskyB and ONdigital and of the initial roll out of digital cable services by CWC, Telewest, and NTL. As a result, turnover increased by 58% from 1998 to US$258.6 million.
Pace attributes the improved returns to the accelerating growth of DTV in the UK and competition between satellite, cable, and terrestrial transmission. Pace provides the integration technology that enables the customers of each of these systems to receive DTV services.
Overseas business for the company, however, was depressed. In Latin America, economic difficulties slowed sales, and in European markets, new products were delayed by component shortages. While performance in Latin America will take time to improve, Pace increased revenues in Europe over the second half of last year and won a new contract to supply Canal+ with at least 100,000 units next year. In the US, Pace gained its first cable contract with Time Warner Cable for a minimum of 750,000 units over the next three years.
For the remainder of this financial year, Pace expects a continuation of the pattern of the first half of the year with further rapid deployment of the home gateway in the UK. Margins will remain under pressure as a result of the competitiveness of the market.
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