The set-top box maker is cheap but supply chain fragility makes it risky

 
Steve Dinneen
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It’s not been a great year for Pace. Yesterday marked its third profit warning. The most recent two have been down to unforeseeable events – the Japanese earthquake, which hit tech companies across the globe and now the Thai floods.

However, it shows just how brittle Pace can be when faced with supply chain issues. The Japanese quake shaved £36m from its 2011 profits, while this latest disaster will take a further £6m this year and up to £13m next year – almost 10 per cent of its operating profit.

The subsequent drop in share price makes Pace a tempting prospect but while the firm seems to have little control of its fate, it would take a brave investor to buy.