These interim results from set-top-box maker Pace (PIC) look all the better against a weak first half last year caused by flooding of key supply centres in Thailand. However, full credit should go to management for having executed such a robust recovery.
Since taking over 18 months ago, the team led, by chief executive Mike Pulli, has cut costs, slimmed the supply chain, diversified sales, improved margins and slashed debt. And this has quickly fed through to the company's share price, which has more than trebled and surged a further 10 per cent to an all-time high following these results.
Granted, the dramatic improvement in profits this year was bolstered a bit by exceptional costs and other items. Yet adjusted cash profits still increased 57 per cent year-on-year from $61.6m to $96.7m (£63.2m), led by continued strong growth in the US that the company also experienced in the second half of last year. As a result, management has raised profit guidance for the full year, predicting operating margins "greater than 7.5 per cent" (up from 6.6 per cent in 2012). They also expect to be net cash-positive by the year-end.
Broker Canaccord Genuity estimates adjusted pre-tax profits and EPS of $182m and 42.5¢ in the current year, rising to $189m and 44.2¢ in 2014 (from $144m and 33.4¢ in 2012).
PACE (PIC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 306p | MARKET VALUE: | £959m | |
| TOUCH: | 305-306p | 12-MONTH HIGH: | 306p | LOW: 147p |
| DIVIDEND YIELD: | 1.1% | PE RATIO: | 15 | |
| NET ASSET VALUE: | 163¢* | NET DEBT: | 13% | |
| Half-year to 30 Jun | Turnover ($bn) | Pre-tax profit ($m) | Earnings per share (¢) | Dividend per share** (¢) |
|---|---|---|---|---|
| 2012 | 1.01 | 21.4 | 5.1 | 1.44 |
| 2013 | 1.32 | 68.6 | 16.4 | 1.83 |
| % change | +31 | +221 | +222 | +27 |
Ex-div: 6 Nov Payment: 6 Dec £1=$1.53 *Includes intangible assets of $532m, or 170¢ a share **Dividends will be paid in sterling, equivalent to 1.19p a share (0.928p in 2012). | ||||
