LONDON Pace Micro Technology increased turnover in its financial year to June 4 to £253.3million up from £239.9million in 2004. Profit before goodwill and exceptional items of rose to £8.1million (2004: £5.9m).
The gross margin improved from 16.8% in the first half to 26.6% in the second half, which the company says reflects the improved mix of products to higher margin products together with increased service and engineering revenues.
The company shipped 3.4 million set-top boxes, up from 2.2 million and has increased its penetration of the US market with multi-year agreement with Comcast Corporation, the US's largest provider of cable, entertainment and communications.
Sir Michael Bett, Pace Chairman, said, “Looking forward, the Board anticipates that revenues as currently forecast will be ahead of expectations, albeit at a slightly lower margin. There will be an uneven distribution of revenues between the first and second halves of the year, as deliveries on our new US and European business start at the endof calendar 2005 and grow in 2006. With first half results expected to be below break-even, second half revenues for the next year are expected to be significantly ahead of first half revenues.”
Initiatives to improve efficiency and cost-effectiveness involved significant changes tohow the company manages its engineering development process, have associated implementation costs and gave rise to some exceptional costs last year. There will be further such costs in the year ahead. In addition its has expanded the team of outsourced software engineers at Tata Elxsi in Bangalore, India and engaged an additional large scale manufacturing partner with design capabilities to complement its existing relationshipwith Solectron.
Next year Pace says it will increase its focus on the new advanced coding standards, the growth of next generation mobile and high definition PVR platforms as well as expanding its work on alternative delivery platforms such as internet protocol television (IPTV).