Pace reports positive start to year

Technology developer Pace reported a good start to the financial year at its annual general meeting on Thursday, saying forecast demand for both current and new products was building as the year progressed. As such, it said it was confident that it was on track to achieve its previously stated guidance of 2014 revenue of around $2.7bn, up from $2.47bn in 2013, while the operating margin is expected to rise to around 8.5% from 7.8% last year. It's cash flow, however, is set to come in at $185m, down from $209m, as previously forecast. "In line with our expectations, revenue in the period was lower than the same period in 2013 reflecting the impact of dual-sourcing of Media Servers and Gateways," Chairman Allan Leighton said. However, gross margins were well ahead of the first quarter of 2013, driven by an improved revenue mix, procurement benefits and the acquisition of Aurora Networks in January.Leighton said that both the integration activity and trading of Aurora were ahead of company expectations, and that all steps have been implemented to realise the previously stated synergy savings of $4m in 2014 and $8m in 2015. "Underlying demand has been strong and the trading outlook is positive. We expect Aurora to be a significant profit and cash contributor in 2014," he added. He also reported progress with the transformation of its core business, and has also widened out into Software, Networks, Services and Integrated Solutions. NR