Set-top box maker posts profits rise

UK set-top box maker Pace today said it had shipped nearly three million boxes in the first half of 2008 as a major acquisition and the surge towards digital TV underpinned trading.

The West Yorkshire-based firm said volumes had reached 2.8 million – 55% ahead of the previous six months – thanks to a strong contribution from its new French arm, the former set-top box business of European electronics giant Philips.

Pace, which supplies 17 of the world’s top 25 cable companies, is confident of prospects this year and next after posting underlying profits of £11.2m (€14.2m), 6% above the second half of 2007.

It expects the overall market for digital TV products to rise to 230 million shipments in 2012, driven by high-definition (HD) and Personal Video Recorder (PVR) products. Pace launched 10 new HDPVR products worldwide over the period with customers including Sky Italia and Sky New Zealand.

Among the contracts also won by the group in the first half of the year was a low-cost analogue-to-digital converter for US cable firm Comcast.

“Analogue switch off programmes, which are Government-mandated and particularly aggressive in Europe and the USA, will drive demand across a wide range of digital set-top boxes,” Pace added.

The firm, which compared trading with the previous six months due to the French deal and a change in its reporting year, said Pace France had added 20 customers and over 30 new products to the group, while trading was also helped by the strength of the euro.

Chief executive Neil Gaydon said: “The business is in good shape to capitalise on growth in our core set-top box business, new markets and new technologies as the world embraces the wide range of digital TV solutions.”

Royal Bank of Scotland analyst Charles Brennan said it was difficult to draw meaningful comparisons with the results due to the acquisition of Pace France and the financial year-end changes.

But he added: “Looking forward, the outlook statement is very reassuring and points to expectations for a significant uplift in second-half volumes.”