Pace hit by HDD supply problems

Set-top manufacturer Pace has been hit by hard disk supply problems in its interim results.

With the exception of the HDD supply issue, volume and revenues are in-line with expectations, Pace said.
Impact of HDD supply issues on 2011 operating profit is expected to be about US$9.5 million (€7 million), the company said.

There will be a consequent impact to cash through lost profit and increased working capital, with net debt at year end now expected to be about US$320m-US$330m.

A consultation is underway on a proposed reorganisation of the Pace Europe business, the details of which are subject to finalisation. An exceptional charge of about US$12m will be taken in 2011 and the consultation is expected to conclude before the end of the first half of 2012, the company said. The proposal is targeting annualised savings of US$7m, with about 50% expected in 2012.

The Pace board now expects 2012 group operating margin to be about 7% on broadly flat revenues before the impact of HDD supply issues.