Satellite and cable television equipment manufacturer Pace Micro Technology Plc has reported massive increases in revenue and profits following its split from Pace Micro Communications Ltd nearly 18 months ago, but the market was not too impressed and the shares plunged 41.5 pence or 18.3% to 187 pence as the market opened. Fly in the ointment was that the Shipley, UK company said it expected to achieve its original budget for this year but did not anticipate any over performance from new contracts. It also said the strength of sterling had put pressure on selling prices and margins and although the company said it had hedged short- term currency positions, the pound’s dramatic advance had caused it to re-evaluate our approach to local currency pricing, purchasing and manufacturing. The company reported an 89.7% increase on revenue to 117.7m British pounds for the six months to November 30, while net profits were up from 291,000 pounds to 6.8m pounds and pre-tax profits increased to 10.2m pounds from 440,000 pounds last time. Earnings per share rose to 3.2 pence from 0.1 pence reflecting a successful interim period. Pace Micro Technology, which employs 1,000 people, is attributing its results, which were above expectations, to several factors that enabled it to expand and increase efficiency. Growth in analog reciever sales were up 8% with the company being able to hold larger stocks of components enabling it to respond quickly to changes in demand. New digital markets were opened in Italy, the Netherlands, Mexico and Brazil with Pace Micro Technology securing a conditional access license leading to a contract with Canal Plus which will enable the company to move further into Europe. A similar agreement with General Instrument Corp will open up new opportunities in the US. said that it had had to re- evaluate its approach to local currency pricing owing to an advance in the strength of Sterling. The company’s financial accountant Caroline Hall said that Pace was benefiting from its flotation last year with proceeds amounting to $19.9m, aiding expansion and giving it access to wider financial markets. Last week the company, which split from Pace Micro Communications in August 1995 in a 3m pound management buyout (CI No 2735), announced it was one of four firms likely to manufacture digital television set-top decoders for British Sky Broadcasting Plc, but chairman P W L Morgan said in his statement with the results, that prospects for the rest of the financial year were more dependent on broadcaster subscriber growth. A dividend of 0.9 pence will be paid on April 4.
