Japanese tsunami hits Pace profits

Pace, the world’s biggest maker of set-top boxes, warned that its full-year profit was likely to fall short of internal forecasts, due to the Japanese earthquake and tsunami, which disrupted global supply chains.
By The Newsroom
Published 10th May 2011, 09:39 BST

The company, which is based in Saltaire, near Bradford, expects operating profit for the year ending December 31 to be around $150m to $170 million (£97m - £110m).

Several seaports in Japan, the world’s third largest economy, handling international trade sustained major damage, with most likely to be out of operations for months, posing challenges for global supply chains.

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“Despite revenues and product shipments being on track, we have made a disappointing start to the financial year with our profitability,” chief executive Neil Gaydon said in a statement.

“Although we will now not be able to make up this first-half under-performance in the second half we continue to drive long-term growth and profitability,” Mr Gaydon said.

The company also said a lack of demand for its Pace Networks products led to the closure of the division.

Pace now expects operating margins for the first half to be at around 5.5 per cent. It is confident of returning close to its medium-term operating-margin target of 8 per cent in the second half.

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