Pace revenues strong despite hard drive supply shortages

TECHNOLOGY firm Pace yesterday said it was pleased with revenues for the start of 2012 – but admitted that it was still being affected by the global hard drive shortage.

The firm, which provides set-top boxes to companies such as Virgin Media, was badly affected by last year’s Thai floods, which severely damaged the global supply chain for consumer electronics.

Speaking at the firm’s AGM chairman Allan Leighton told investors: “I am pleased to report that Pace has had an encouraging start to the new financial year with revenue in line with our expectations. The business is benefiting from a stronger operational focus and this is delivering tangible benefits in procurement, operating efficiency and costs.

“Profitability in the period continues to be impacted by hard drive supply issues but is in line with our expectations,” he added.

Pace endured a troubled 2011, as the Thai floods and Japanese earthquake combined with poor stock control and delayed orders to halve profits.

But the firm, based in Saltaire near Bradford, has been transformed since experienced City operator Leighton took over as chairman in May 2011.

In the last year six senior staff have left the firm, including former chief executive Neil Gaydon and Mark Loughran, boss of the company’s international arm.

Chief operating officer David McKinney found himself without a job in January when his position was abolished as part of an attempt to streamline the firm’s management.

Shares in the firm responded well to the interim management statement, closing up two per cent at 73.25p.

As recently as February 2011 the firm was trading at 229p but a series of profit warnings caused them to crash to 44p by the end of the year.

Leighton said he was confident that the firm could maintain existing levels of revenue during forthcoming year and that a seven per cent margin was possible if his team delivered “a leaner, more profitable business underpinned by strong underlying cash flow”.