Pace the world leader in set-top boxes

Saltaire-based Pace shipped more set-top boxes in 2009 than any other developer, according to a new study by industry analysts IMS Research.

IMS said that Pace is likely to maintain its top ranking position in 2010.

Pace shipped 17.2 million boxes in 2009, but is expected to ship a record 21 million in 2010.

Last year Pace was in third place behind US-based Motorola and French company Technicolor, formerly know as Thomson.

Pace chief executive Neil Gaydon said: "We are thrilled to bits, this is a real boost for the company. For Yorkshire to have the world's leader in a market that is changing the way we watch TV is a real achievement.

"This is a very tough business and we're up against very big, tough organisations. This is a tremendous signal to the whole country. In times of austerity, British companies can win," he said.

Much of the growth has been driven by the soaring popularity of High Definition (HD) television.

The World Cup has also boosted HD sales as demand increases ahead of this summer's football tournament.

Pace believes the decision to broadcast the matches in both High Definition and 3D formats will result in its first half results being ahead of the second half.

Other growth drivers are PVR (personal video recorder), on demand services, 3D and Whole Home – which allows subscribers to pause, film and watch TV in any room in the house. The other growth driver has been Pace's decision to diversify. In 2010 the UK will account for just two per cent of the group's revenues.

"We are a global company now," said Mr Gaydon. "We have a very strong position in the US, which is great for a UK company."

Co-author of the IMS Research study Rebecca Kurlak said set-top box shipments grew by 15.2 per cent year-on-year on a global basis from 2008 to 2009.

"Pace's position as the 2009 market share leader can not only be attributed to the company's 2007 acquisition of Philips' set-top box business, but also due to the company's continued organic growth.

"The Philips division, now Pace France, has allowed Pace's headquarters in England to remain focused on traditional TV platforms and clients."

IMS Research expects Pace to remain in the top ranking position in 2010 due to its recent partnership announcements of HD roll outs for Benelux satellite operator M7 Group and Malaysian satellite operator Astro, in addition to its large contract agreements with DirecTV, UPC and Viasat.

At its AGM last month Pace, whose customers include BSkyB, Comcast Corp and Canal+, said it expects to see a combination of solid volume growth and modestly lower average selling prices.

Analysts expect Pace to report a 17 per cent rise in annual adjusted 2010 pre-tax profits to 89.2m. They see revenues rising five per cent to 1.19bn in the year to December 31.

"We are saying that's about right, we might do a bit better than that," said Mr Gaydon. "We have to see, after the pull-forward for the first-half, what orders look like for the second."

He said early orders for the second half were "looking fine".

The group has recently won several new customer contracts, which included Astro selecting it for Malaysia's first High Definition service.

It has also won new contracts for a second generation set-top box for BT Vision in the UK and a new range of Freeview High Definition products in the UK

Pace supplies boxes for over 100 of the world's payTV operators. The group employs over 1,000 people in locations around the world, including France, the US, India and China.

Company joins the elite 1bn league

Pace has joined an elite group of Yorkshire companies making revenues of over 1bn.

Saltaire-based Pace reported annual revenues of 1.1bn in March, joining the likes of Leeds-based Asda, Bradford-based Morrisons, Drax in North Yorkshire, York-based Persimmon and Sheffield-based SIG.

Analysts expect Pace to report a five per cent rise in revenues to 1.19bn in the year to December 31.

Asda, the UK's second biggest supermarket and now owned by US retail giant Wal-Mart, reported annual sales of 18.6bn.

It was closely followed by the UK's fourth biggest supermarket Morrisons with annual sales of 15.4bn.

Insulation group SIG saw sales of 2.74bn while coal-fired power station Drax saw yearly sales of 1.475bn and housebuilder Persimmon reported annual sales of 1.42bn.

Natural chemicals company Croda International narrowly missed the 1bn mark with annual sales of 916m, as did credit lender Provident Financial with yearly sales of 815m and electronics distributor Premier Farnell which reported annual sales of 795m.