Pace Micro Technology Ltd, maker of satellite and cable television receiver set-top box decoders is poised to float on the London stock market to raise some 20m British pounds. The Shipley, West Yorkshire company’s profits for the nine months to March 2 soared 168% on the whole of last year to 9m pounds, on revenue that climbed 26% to 126m pounds during the same period. And Pace forecasts profits of another 9m pounds for the fourth quarter alone, to take the total for the year to May 31 to 18.1m pounds. The flotation of 55% of the existing equity plus some new shares is expected to value the company at about 250m pounds. The rapid increase in profits was partly attributable to the launch of digital services in Australia, South Africa and Thailand, said David Beck at Lowe Bell Financial. He said 250,000 boxes have shipped since August 1995, and 80% of sales in the third quarter were to overseas customers. Pace has yet to provide a breakdown detailing the split between shipments of analog and digital equipment, but Beck estimates it to be about 80% to 20% respectively. In the digital arena, the bulk of the company’s business comes from satellite digital set-top boxes. Cable remains a predominantly analogue service, but Pace said it was making some headway. Lastly comes terrestrial television transmissions, where digital broadcasting is still in its early stages. Pace said it expects the set-top box market to expand rapidly over the coming years, and will undoubtedly receive a firm boost from organizations such as the British Broadcasting Corp, when it switches from analog to digital broadcasts. The money raised will be used to reduce some of the company’s 12.7 pound net debt, increase working capital and to give key employees share options. Conditional dealings are to start on June 20. Panmure Gordon is the stockbroker and Barclays de Zoete Wedd is the sponsor for the flotation.
