The ongoing disruption in the supply of hard disk drives after flooding in Thailand largely explains these weak looking figures from electronic components group Pace. Still, with the $23m (£15m) hit to profits from that already taken, management seized the opportunity to find cost savings - although, after a decent run in recent months, further share price upside may be limited.
The reorganisation of Pace's US and international divisions, and an improvement in productivity, meant underlying administrative expenses fell by 13.5 per cent in the period to $133.6m (£86m). Cash was also saved by renegotiating terms with suppliers - that helped reduce working capital costs. Still, trading prospects remain uncertain. At its key North American market, for instance, underlying sales rose just 1 per cent to $517.6m. Meanwhile in Europe, the group saw a low level of contract wins which helped sales there fall 10 per cent in the period to $189.5m. And while management says that contract wins have improved during the half, the effect of that won't be felt until next year.
Broker Cannacord Genuity has upped its full-year forecasts by 10 per cent and expects pre-tax profit of $80.4m, giving EPS of 25.5¢ (from $42m and 28.1¢ in 2011).
PACE (PIC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 128p | MARKET VALUE: | £391m | |
| TOUCH: | 127-128p | 12-MONTH HIGH: | 133p | LOW: 43p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 18 | |
| NET ASSET VALUE: | 136¢* | NET DEBT: | 59% | |
| Half-year to 30 Jun | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2011 | 1.19 | 29.4 | 7.10 | 1.25 |
| 2012 | 1.00 | 21.4 | 5.10 | 1.44 |
| % change | -16 | -27 | -28 | +15 |
Ex-div: 7 Nov Payment: 7 Dec *Includes intangible assets of $584m, or 191¢ a share £1=$1.55 | ||||
