Pace Micro Technology reported slightly reduced turnover of Pounds 182.8 million for the year ended 29 May 1999 (compared with Pounds 184 million for 1998). Revenues from sales of digital equipment were, however, up significantly, from Pounds 129.8 million to Pounds 166.4 million. Pace’s bottom line improved markedly, turning a 1998 pre-tax loss of Pounds 12.1 million into a profit of Pounds 15.1 million for 1999.

The figure for digital boxes represented a 30 per cent improvement on the previous year, with overall turnover stagnant due to the falling off in the analogue market, following Pace’s decision to quit the analogue business altogether. Analogue revenues fell to Pounds 16.4 million from Pounds 54.2 million last year. Pace’s gross margin for the year was 26.5 per cent, compared with 17.7 per cent last year (excluding prior years’ royalty and stock provisions).

Pace however noted in its results statement that it "will be difficult to maintain gross margins because of the growing pressure on component supply and pricing," reflecting comments made recently by CEO Malcolm Miller (see Interspace 671).

Pace reported that its UK sales had grown to just over half the total revenues, resulting in a dollar shortfall due to purchases being denominated in US dollars. Pace has purchased a number of forward contracts in dollars in the expectation that this will continue next year. Pace also said it had obtained a further unsecured credit facility of Pounds 50 million on top of its existing Pounds 20 million facility in the expectation that next year’s sales growth would place demands on cash requirements in excess of the latter.

Pace also made a number of new hires totalling about 200 people, mostly on the engineering side, including about 40 from the acquisition of Acorn’s set top division. The company said it had invested Pounds 2.5 million to upgrade its digital manufacturing facility.