Pace has announced his Management Statement for the period July 1st 2013 to November 13th 2013. Trading in the period has shown good progress with continued momentum across the business. Key wins have been achieved in the period giving further confidence for 2014. Project delivery for the new wins is well underway and the underlying demand across the business is strong.
Revenue in the period, as expected, was lower than the same period in 2012, reflecting the impact of dual-sourcing of Media Server supply by a large North American satellite customer. Gross margins in the period however benefitted from improved revenue mix and procurement savings resulting from improved supply chain effectiveness.
Operating costs in the period are lower than in the same period in 2012.Adjusted EBITA and Return on Sales are higher than the same period in 2012, despite the lower revenue, reflecting the Company’s continued progress towards improved medium term profitability.
Cash flow in the period has been strong following the completion of the Electronic Manufacturing Services (“EMS”) consolidation, working capital has been further reduced and Pace is now in a net cash position (Peak net debt of $321.7m at 31 December 2011).
Trading in the period has been strong and the outlook for the remainder of the year is reiterated. Revenues for FY2013 expected to be broadly in-line with 2012. Operating margin for FY2013 is expected to be greater than 7.5 per cent and strong cash flow will continue, and excluding acquisitions, Pace expects to retain a net cash position through to the end of 2013.
Mike Pulli, CEO, said: “Following a strong first half in 2013, Pace has made further good progress in the period with continued momentum across the business.”
“The transformation of our supply chain is nearly complete and we are seeing meaningful benefits both operationally and financially. Wins with tier one customers reinforce our leadership position in PayTV hardware and our strategy of widening out our products and services continues to build momentum with wins and deployments across all of the regions we operate in.”
“The acquisition of Aurora represents an important step in the evolution of Pace and enhances our strategy to widen out and build a broader platform from which to drive revenue. Acquiring Aurora will allow Pace to expand beyond our core business and build deeper and more embedded relationships with our customers, which the Company believes will strengthen Pace’s position as a market leading solutions provider for the PayTV and broadband industries.”
“We are confident about our trajectory and remain firmly focused on closing out the year and then making further progress in 2014.”