Pace ahead of forecast

pace_mike_Pulli

Mike Pulli

Pace now expects to exceed previous guidance it says in a trading update that highlights 7.3 per cent underlying operating margin on $2.4 billion of revenue and net debt reduced by 47 per cent in the year.

The unaudited figures show the group performed strongly in H2 with record Q4 revenue largely driven by demand for next generation Media Server products in North America. Full year revenues expected to be around $2.4 billion, 4 per cent ahead of 2011 and of prior guidance.

Underlying operating margin expected to be 7.3 per cent, after adjusting for the adverse impact of HDD supply disruption, with adjusted EBITA of at least $157 million (11 per cent ahead of 2011).

Cash generation throughout H2 was strong, with free cash flow for the year expected to be not less than $175 million (2011: $8.2m).

Closing net debt expected to be no greater than $170 million (2011: $321.7m), a 47 per cent reduction during the year (compared to a 3 per cent increase in 2011).

The company claims it has made good progress throughout the year in the execution of our Strategic Plan:

• Transform Core Economics: The continued focus on operating efficiency has delivered sustainable savings in the year, and we are well underway in the transformation of our supply chain that will deliver tangible benefits in 2013 and beyond.

• Pay-TV Hardware Leadership: There has been high demand for Media Servers in H2 for both DIRECTV’s Genie Advanced Whole-Home HD DVR and the XG1 for Comcast’s new X1 service. We expect this technology trend to continue into 2013, and we recently announced the approval for production of DIRECTV’s next generation HR44 Genie Media Server and C41 mini Genie client device.

• Widen out into Software, Services and Integrated Solutions: We have achieved a number of key wins and deployments across all areas of our software and services offerings, and have a strong pipeline into next year. There were two standout wins:

  1. Foxtel, the largest Pay-TV operator in Australia, has selected Pace to provide an integrated whole home solution consisting of Pace Media Server hardware and Pace Elements software along with Pace Systems Integration services to help deploy the solution.
  2. BSkyB has deployed the Pace Component Management System (CMS) which will support its customers in the UK.

Mike Pulli, CEO, said: “Pace has performed impressively in 2012 with a particularly strong second half to the year. We have made good headway on executing our strategy and Pace is becoming a more profitable, cash generative company.

We have momentum and a sustainable platform to build from, and we expect to make further progress in 2013 and beyond.”

The Group will be announcing its preliminary results for the year ended 31 December 2012 on March 5th 2013.

Pace shares were suspended recently as it made an unsuccessful bid for the Motorola STB business ultimately bought by Arris.

 

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