Pace reports strong start to 2014

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Set top box maker Pace said it has made a good start to the new financial year and demand for both current and new products is building as the year progresses.

The Saltaire-based company said this gives it confidence that the company is on track to achieve revenues of £1.6bn this year.

At its Annual General Meeting today, chairman Allan Leighton, will tell shareholders that revenue in the first four months of 2014 was lower than 2013 reflecting the impact of dual-sourcing of media servers and gateways. This was in line with expectations.

“Gross margins in the period are well ahead of the first quarter of 2013 due to the positive impact of improved revenue mix, procurement benefits and Aurora. Operating costs, excluding Aurora, continue to trend down reflecting on-going improvements in operating efficiency,” he said.

The group said profits are in line with expectations and it has seen robust cash flow generation.

Mr Leighton said trading at Aurora Networks, which it bought earlier this year, is ahead of expectations, as is the integration programme.

“The integration is largely complete and all steps have been implemented to realise the previously stated synergy savings of $4m (£2.4m) in 2014 and $8m (£4.8m) in 2015,” he added.

“Underlying demand has been strong and the trading outlook is positive. We expect Aurora to be a significant profit and cash contributor in 2014.”