Pace boxing clever for US

UK set-top box specialist Pace claimed a raft of technical innovations in the TV technology industry and a breakthrough in the US could herald an upturn in its fortunes.

Pace, which has struggled for several years in the cut-throat climate of the pay-TV market, saw interim pre-tax profits rise to £3.1m compared to £800,000 at the same stage last year. Sales grew by one third to £150m.

The Yorkshire-based company claimed it is poised to benefit from the growing popularity around the world of services that need more sophisticated set-top boxes. The most immediate example is the personal video recorder (PVR), already making its mark as the enabling technology for the Sky+ view-on-demand service.

Pace said it was developing innovations in the field such as mobile PVRs and boxes capable of supporting emerging technologies such as high-definition TV and multi-room viewing.

The company’s R&D engineers are also developing systems for the ‘intelligent home’ networks expected to combine traditional TV services with IT. ‘In addition we are active in broadband video and the delivery of digital television over telephone lines, and have worked on some of the world’s most successful live deployments,’ claimed Pace. ‘With more large telecoms companies now looking at broadband video we have increased our activity in this area.’

The company is hoping the new technology bonanza will be accompanied by a breakthrough in the huge US pay-TV market, where it has struggled to make an impact on the position of established set-top box giants such as Scientific Atlanta. Pace said it was shipping its high-definition box to the US and its operations across the Atlantic may move closer to break-even in the second half of the year.

Overseas business is crucial for Pace, which captured a big share of the UK’s set-top box market in the early boom years of cable and satellite TV but then suffered as growth in the domestic market slowed down.

The company said more than 60 per cent of its income is now from non-UK sources. Pace said Sky Italia was a major customer in the half-year to January, and it has been building links with new broadcasters in Germany and Scandinavia. It is also working with Foxtel in Australia on its first PVR service.

Despite the decidedly upbeat results statement, however, Pace underlined the competitive nature of the market when it warned that sales into Italy and Germany were likely to slow down in the short term as the pay-TV markets in those countries moved out of their high-volume launch phases.