Pace to take $12m hit

UK-based set-top technology company Pace is to take a $12 million “exceptional charge” to fund the reorganisation of Pace Europe. Fuller details of the restructuring have yet to be finalised. Pace is expected the move to then start showing savings of about $7 million each year, with about 50 per cent of that saving kicking in during 2012.

Pace has been undertaking a strategic review of its business over the past few months under new chairman Allan Leighton.

Pace issued a Profits Warning earlier this year following on from the devastating floods in Thailand which affected the availability of hard drive components needed for its set-top boxes. An earlier Profits Warning was also made following the Japanese earthquake and tsunami.

The consequences are that operating profits will fall by some $9.5 million in 2011, and that the full year’s operating profits will fall to around $141 million. The company’s net debt will rise to $320 million-$330 million.

The company said the review showed that an operating margin of 9 per cent was a realistic medium-term objective.

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