Pace Micro boosts profit

July 9, 2001 Posted: 0710 GMT

LONDON (CNN) -- Europe's No. 1 TV set-top box maker Pace Micro Technology on Monday posted a 61 percent rise in annual profits as digital TV services grew.

Pace said pretax profits before amortisation and one-time items in the year to June 2 rose to £44.3 million ($62 million), as sales rose 39 percent to £523.6 million compared with £377.6 million in fiscal 2000.

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The UK company said its sale of digital boxes rose 27 percent to 2.7 million compared with 2.1 million the previous year, as UK operators British Sky Broadcasting (BSY), NTL (NTLI: Research, Estimates) Telewest (TWT) and ONdigital rolled out their services at a high rate.

"The global market for digital TV will continue to expand," the company said. "Pace will depend on this and the success of broadcasters and network operators for growth."

Pace's boxes allow customers to receive TV channels on cable and by satellite and the boxes will enable TVs to provide a growing number of the same interactive services available on personal computers.

Pace also makes cable modems and has development partnerships with companies such as Cisco Systems (CSCO: Research, Estimates) and Microsoft (MSFT: Research, Estimates) to integrate Internet, digital storage, and other technologies with its set-top boxes.

The company said it increased its exports from 8 percent of revenues to 15 percent over the past year as it aims to expand out of the UK market it dominates.

"We are aiming for more than double the proportion of international business, principally in the US and mainland Europe," Pace added.

Pace said it filed 75 new patent applications during the year, bringing the total number to 156 as it continued a high spend on its research and development programme.

During the year the research and development engineering staff grew by more than 60 percent to 633 at its bases in the UK, France and the U.S., the company said.

Pace (PIC) shares rose 7.6 percent to 340 pence in London early trading.

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