Falling Profits Force Pace To Take Action

Pace Micro Technology, the set-top box manufacturer, announced today that profits had fallen 70% year on year, reflecting a lack of growth in the digital TV market.

The demise of ITV Digital and the continuing problems faced by debt-ridden cable companies have impacted on Pace which is to cut 180 jobs as part of a drive to slash costs by 20%.

“Turbulent conditions in the broadcasting market have caused delay and disappointment,” said chief executive Malcolm Miller.

Pace has now agreed to supply its Sky+ video recorders to BSkyB at below cost until April. In return, it will receive a share of the £10 monthly fee that BSkyB customers have to pay for the product.

Miller accepts that this will take £8 million out of profits for next year but is confident that the deal will prove advantageous in the long term. He is also supportive of the ITC’s decision to award digital licences to the BBC/BSkyB consortium.

“Taking on the digital channels and making more of them, and the fact they will be free, will be of huge benefit to us, retailers, consumers and government plans to switch off in 2010,” he said.

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