Pace lifts full year guidance

Shares of set-top box technology firm Pace surged 13 per cent after it reported a decline in half year profit but increased its guidance for the full year as supply disruption stabilised.

Profit before tax for the 6 months ended 30 June 2012 fell to $21.4m compared to $29.4m in the same half a year earlier. Revenue for the period fell to $1.01bn from $1.2bn in line with management expectations.

Commenting on the results, chief executive officer Mike Pulli said: "Pace has had an encouraging start to 2012; recovery is underway and we are becoming a more profitable, cash generative company."

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Pace, which suffered supply disruption after flooding at its hard drive supplier in Thailand, said HDD supply disruption impact on 2012 EBITA is forecast at around $27m, compared at $23.1m in the first and $4m in the second half; at the lower end of full year guidance.

The group added: "The outlook for the remainder of the year has improved; better operating performance and increased volumes plus new business wins underpin the Board's confidence that operating margin will be greater than 7% from flat revenue against 2011 (both before impact of HDD supply disruption).

An interim dividend of 1.44c has been recommended, up 15% from the year before.

The increased interim dividend reflects the Board's confidence in the outlook and the future prospects for Pace, the group said.

CJ