Pace Micro Technology has announced it expects to make a loss for the second half of the financial year ending June 1, 2002. In a previous statement, Pace said it expected to make a profit. In addition to this, it expects its financial situation to be further impacted by a review of goodwill and the value of Pace stock held by the employee benefits trust. Pace has commenced a cost-cutting drive, and expects to be on top of the situation by the next financial year.
Following its previous statement that the company had stopped shipping Set-top boxes (STBs) to NTL, due to an inability to obtain credit insurance, Pace is now working with ntl to resolve the situation, and says both parties are hopeful of a satisfactory conclusion. In the US, Pace says it is making steady headway and has received positive re-assurance from its customers although this does not ensure that the product will be shipped in line with current expectations in this financial year
The ITV Digital situation is however causing concern at Pace, mainly down to its wider implications on public confidence in digital terrestrial television. It said: The Company’s new low cost digital TV adapter has been well received by consumers, retailers and the national media. Whilst the company previously indicated it could sell 100,000 units of this free to view product by the end of May, supply has been prudently constrained to around half this level due to the current uncertainties that surround digital terrestrial TV services in the UK.
Pace is concerned that the uncertainty surrounding ITV Digital will impact on sales of its new low cost digital TV adapter. Whilst the company previously indicated it could sell 100,000 units of this free to view product by the end of May, Pace has now limited supply to around half this level.
Pace does also have unsold stocks of STBs that it manufactured for ITV Digital, but that operator only accounts for 2% of Pace’s global business.
In a closing statement, Pace’s Board concluded: Further ahead, the current turbulence in the broadcasting industry may take time to settle, but the Board remains convinced of the excellent growth prospects in digital broadcasting world-wide. Hence it continues to regard the Group’s long term prospects with confidence.