Strong North American demand sees Pace quicken bounce back
Editor | 11-01-2013
In what is some good news for a change of late, broadcast technology and services provider Pace has issued guidance outlining a rather robust 2012 financial year.
Striving to put its problematic recent past behind it, Pace has revealed in a trading update
that it expects to be ahead of guidance for FY2012 ended 31 December thanks to strong performance in the second half of the year.
Largely driven by demand for next generation Media Server products in North America, a territory in which its advanced products have traditionally been well received by operators looking to gain a technological edge over rivals, Pace posted record Q4 revenues. In particular it noted high demand for Media Servers in H2 for both DIRECTV's Genie Advanced Whole-Home HD DVR and the XG1 for Comcast's new X1 service.
This will likely mean full year revenues are expected be around the $2.4 billion mark, 4% ahead of 2011 and of prior guidance. In addition, underlying operating margin in now likely to be 7.3%, after adjusting for the adverse impact of HDD supply disruption - expected to make a hit of $76.8 million to revenue and $23.1million to adjusted EBITA - with adjusted EBITA of at least $157 million, 11% ahead of 2011's figure. Closing net debt is now expected to be no greater than $170 million, a 47% reduction during the 12 months and compares even better to 2011 when considering that year saw the debt rise 3% year-on-year.
Attempting to attribute reasons for the good second half, Pace noted that what it called a continued focus on operating efficiency had delivered sustainable savings in the year, and that it was "well underway" in the transformation of its supply chain. Supply has been an Achilles Heel for Pace since 2011 and such issues in this area were directly attributable to the complete change in senior management from the end of 2011 and early last year.
Going forward, Pace expects the trend for advanced technology demand to continue into 2013, and, following a number of key wins and deployments - in particular at BSkyB and Australian pay-TV giant Foxtel - it attests to having a strong pipeline across all areas of its software and services business.
Offering his comment on the guidance, Pace CEO Mike Pulli said: "Pace has performed impressively in 2012 with a particularly strong second half to the year. We have made good headway on executing our strategy and Pace is becoming a more profitable, cash generative company. We have momentum and a sustainable platform to build from, and we expect to make further progress in 2013 and beyond."