Evidence of growth in the European digital TV market is reflected in interim results from Pace Micro Technology which show the company to be operating profitably again.
A slump in sales of set-top boxes resulted in pre-tax losses of £16 million in the last financial year (to May 31 2003) (see
Pace Sales Dip 40% As UK Digital TV Market Stabilises) but business picked up in the second half of 2003.
In a statement yesterday, Pace reported turnover of £110.4 million for the six months ending 29 November 2003, an increase of 32% year on year. Pre-tax profit came in at £1.1 million.
Shipments rose 51% to 985,000 during the period in question with around half the total intended for the UK market, notably Sky+ viewers. However, revenues in this country remained fairly static due to a decline in average selling prices.
More than half of UK homes now have multichannel television (see Digital TV Now In More Than Half Of UK Households) and Pace is confident that penetration will continue to rise impressively. However, falling prices are likely to hinder revenue growth.
The US remains a latent market but demand for high-definition (HD) content, set-top boxes, televisions and displays is gathering momentum. Pace hopes to benefit from its tie-ups with cable giants Comcast and Time Warner in the year ahead.
Continental Europe accounted for 45% of shipments and these markets are currently the most vibrant. Rupert Murdoch’s Sky Italia is now a major customer and Pace is also making inroads in Germany and Scandinavia. Mainland Europe and Asia are seen as key growth areas with lower set-top box prices and DVR deployments likely to stimulate uptake.
“I am pleased to announce that Pace has returned to profit following a difficult couple of years,” said the company’s chairman Sir Michael Bett. “We see opportunities for development in both continental Europe and Asia, which should result in a modest improvement in the performance of the business.”
