Two technology firms take two very different paths

​While both Pace and Filtronic have been through dire times over the past few years, Saltaire-based TV tech company Pace has managed to ride the storm and produce a ​​34 per cent leap in 2014 profits to £114m as it steps up shipments of set-top boxes and media servers​.

In stark contrast, Leeds-based Filtronic’s shares slumped on the news of yet more production delays.

Following its fourth profits warning, Filtronic’s CEO Alan Needle has fallen on his sword and the group said job losses are imminent.

So what’s the difference?

​​Pace’s troubles began in 2011, when flooding in Thailand disrupted the supply chain and prompted a boardroom overhaul, with former Asda chief executive Allan Leighton taking over as chairman and Pace’s highly successful US boss Mike Pulli stepping up to become CEO. A strategic review prioritised cutting costs, improving efficiency and transforming the company’s supply chain.

Pace has managed to spread itself across the globe, tapping into new market demand​​​ and coming up with new products to offset the damage caused when one area of the business gets in trouble – this time it was demand for gateways, devices which link to the internet, which saw revenues fall 36 per cent last year.

Pace has managed to bring in new gateway product and demand is picking up.

It’s not just about having a wide spread of products, firms also need to have a wide geographic reach.

Companies must not be too focused on one area as some parts of the business will always be hit by factors outside the directors’ control. Back in 2011 it was the appalling flooding in Thailand which hit supply.

Fast forward to 2014 and the group’s global spread means it didn’t matter that trading in Europe was hit by tough economic conditions as strong growth in Asia-Pacific, North and South America more than compensated.

Regions run in cycles and Mr Pulli believes that Europe will be a ‘hot spot’ for the group in 2015, reversing the 10 per cent decline in revenue last year. Pace has a broad enough product and geographic reach to be able to ride out the downturns in any one area.

It’s a very different story at Filtronic, which has rested on its laurels, relying on the success of ​its mobile phone anti-interference technology to buoy up profits.

The LTE/4G mitigation filters, which prevented 4G services interfering with domestic television receivers, drove the group’s performance in 2013, but it wasn’t ready with a new product pipeline when that demand tailed off.

As a result the group will have to take “significant” costs out of the business this year. It is not yet clear how many jobs will be axed. Following the immediate departure of CEO Alan Needle, chief financial officer Rob Smith has stepped up.

Filtronic has admitted that it is unlikely that any of the antenna projects in development will produce significant revenue before the year end in May.

It’s all down to the man or woman in charge.

Mike Pulli at Pace has shown great vision. Now it is time for Mr Smith to take action.

So far he has been impressive. He doesn’t make excuses for past failures and he speaks clearly about the action needed to take the group forward. Analysts at Panmure Gordon said: “While this latest news will further damage Filtronic’s credibility as a public company, we take some encouragement from the fact decisive action has finally been taken to stem the tide of bad news.”

Mr Smith is passionate in his belief that the firm’s new antenna technology will attract big name customers like Nokia.

But this may not be enough.

Pace is already gearing up for the next big thing in TV, 4K Ultra HD, which promises to be four times sharper than Full HD (High Definition).

Filtronic also needs to look beyond the next few years if it is to avoid another profits warning.