Hard disk drive (HDD) shortages, and continued weakness in Pace's European business, forced profits at the set-top-box maker to halve in 2011. New chief executive Mike Pulli - formerly head of Pace Americas - says these issues will continue in 2012 and he's therefore expecting flat revenue growth, with continued HDD shortages set to slash between $25m-$35m (£16m-£22m) off cash profits.
These shortages - arising from flooding in Thailand and the Japanese earthquake - chipped $36m off revenues and cut operating profit by $9m last year. Earnings were also held back by continued weakness at Pace Europe, which his being reorganised following its exit from retail sales. Accordingly, European sales fell 19 per cent to $457.7m - although much of this has been mitigated by strong sales growth elsewhere. A full year's contribution from US-based pay TV operator 2Wire helped drive North American sales up 27 per cent to $1.07bn. Meanwhile, the continued adoption of set-top-boxes in Latin America has propelled sales from the region by 25 per cent to $469m.
Peel Hunt expects adjusted pre-tax profit of $98.4m in 2012, giving EPS of 22.6¢.
PACE (PIC) | ||||
|---|---|---|---|---|
| ORD PRICE: | 90p | MARKET VALUE: | £275m | |
| TOUCH: | 89-90p | 12-MONTH HIGH: | 223p | LOW:44p |
| DIVIDEND YIELD: | 2.6% | PE RATIO: | 11 | |
| NET ASSET VALUE: | 133¢* | NET DEBT: | 79% | |
| Year to 31 Dec | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2007** | 0.25 | 15.4 | 6.3 | nil |
| 2008 | 0.75 | 13.8 | 4.0 | 0.60 |
| 2009 | 1.13 | 69.9 | 17.7 | 1.50 |
| ($bn) | ($m) | (¢) | (¢) | |
| 2010 | 2.06 | 110 | 26.4 | 3.37 |
| 2011 | 2.31 | 54.7 | 13.2 | 3.75 |
| % change | +12 | -50 | -50 | +11 |
Ex-div: 6 Jun Payment: 4 Jul *Includes intangible assets of $553.6m, or 181¢ per share **Seven months £1=$1.58 | ||||
