Pace Micro profits wiped out
TROUBLED TV set-top boxes maker Pace Micro Technology today revealed that it swung from pre-tax profits of £38.1m to losses of £29.5m in the year to 1 June after taking exceptional charges of £39.9m. The exceptional items included a provision of £17.5m because the Pace Employee Benefits Trust is unable to repay a loan from the company to buy shares to fulfil employee options.
It also included a £17.5m write-off against the remaining value of the group's investment in VegaStream, a digital internet protocol voice system, and £4.9m to cover the cost of cutting staff by a fifth.
Before exceptionals, tax and amortisation, Pace's profits plunged from £44.3m to £13.1m on turnover down 33% at £352m. This highlighted how much prices for set-top boxes fell, as unit sales were only 19% lower at 2.2m.
Pace has issued three profit warnings in four months, the latest after it signed a new contract with BSkyB for its personal video recorders involving some being sold below cost price. It said this would knock £1.7m from last year's profits and £8m from this year's.
Chief executive Malcolm Miller said: 'Turbulent conditions in the broadcasting market have caused delay and disappointment. For the longer term Pace is well positioned for growth as and when the market allows.'
The final dividend is being held at 0.7p, making a total for the year of 1.1p, up from 1.05p, as earnings of 11.1p per share turned into losses of 16.1p.
