Pace News:
Pace Supplying More Cable Than Satellite Boxes
1/10/2001
Jan. 10, 2001 (Cable Europe, Vol. 6, No. 1 via COMTEX) -- Pace Reports Buoyant UK Cable Picture
Pace Micro Technology says as far as the UK market is concerned it is now supplying more digital cable than satellite boxes. Pace finance director John Dyson was speaking at the company's half-yearly results briefing, writes Chris Forrester.
He was coy on the specific box numbers supplied, nor would he be drawn about ONdigital's position in the market (Pace supply boxes to all three sectors). "The cable companies have invested heavily in their networks, buying content at a large cost. The cost of deploying set-top boxes, while important to [our business] but as part of cable's aggregate expenditure it is not so large. If they don't complete [this digital roll out] then they will have spent a lot of money on only a quarter of the solution." He added that one year ago digital satellite was the backbone of Pace's box-sales, "but now cable is 60 per cent of our business."
Dyson, and his CEO Malcolm Miller, reported a continued improved financial picture for Pace. "Best for three years" with "all segments growing," says Miller. Revenue is up 31 per cent to GBP205.8 million (same period 1999: GBP157.2m), with pre-tax profits up 41 per cent to GBP17.9m (E28.27m). Pace continues to invest heavily in R&D, both here in the UK where it now has three facilities and its USA base (at Boca Raton). Engineering headcount is 511.
The UK remains Pace's primary market, and still represents 87 per cent of revenues, although this figure is down from 92 per cent of a year ago. Miller says he expects this decline to continue with UK market share contributing nearer to 80 per cent of revenues over the current six trading months. Component shortages have also eased somewhat, partly due to better planning. Miller says the rate of digital growth - as far as the UK is concerned - will slow, while in his view the United States' digital take up will accelerate.
Pace has two major US cable wins to still exploit, in Time Warner and Comcast. The company's first Time Warner boxes start shipping this spring, and Comcast "early in the autumn" says Miller. Europe remains a disappointment for Pace, which Miller blamed firmly on the strength of the Euro, which threatened to squeeze margins too tightly "and has affected our sales in France to Canal+." Pace believes the UK will switch off analogue transmissions sometime this decade and are planning to introduce a low-cost analogue-to-digital home converter box good only for free-to-air terrestrial channels. Miller revealed that Pace will launch its X-TV integrated satellite receiver/hard drive box in Q1/2001. Other new products outlined were the home networking (Gateway) products and the 'Shopping Mate' PDA.
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