Pace predicts another hike in profits

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Set-top box maker Pace said full-year earnings will jump by at least 20 per cent, beating previous expectations thanks to strong demand from North America, its largest market.

The Saltaire-based company’s shares shot up five per cent in early trade on Thursday morning, making it the biggest percentage gainer on the FTSE-250 index.

Pace, whose three major customers are Comcast, AT&T and DIRECTV, said operating margin for the year to December 31 would be no less that 7.7 per cent.

The TV decoder maker said it expects adjusted earnings before interest, tax and amortisation to rise to at least £115m, compared with £96m a year earlier.

The company had raised its full-year forecast in July after first-half profit more than tripled.

Pace, which develops technology for pay TV and broadband service providers, also said it expects full-year revenue to rise 2.4 per cent to £1.5bn.

Analysts had expected the company to report pre-tax profits of £103m.

Pace’s shares have risen by 9.9 per cent since the company raised its profit forecast in July.

The group said its trading outlook, operational efficiency savings and an expected modest net benefit from its strategic initiatives gave it confidence it will achieve good progress in 2014.

Analyst Lee Simpson at Jefferies said: “2013 will go down as a strong recovery year for the firm.

“Having completed their strategic review the firm’s holding in hardware is strong with a wide portfolio, good customer engagement and strength in key markets.

“There is still more to do with the development in software and services but we believe Pace has made good progress.”