Pace have fallen a lot over the last 6 months. The move to digital is near, do you think they can recover. Presently way off previous highs.

PIC PACE

13 Jan 15 JP Morgan Cazenove Overweight 358.90 441.00 444.00 Reiterates

441p SP TARGET

Preliminary Results for the year ended 31 December 2014

Strong performance in 2014: Adjusted EBITA up 24.5% to $241.1m, basic adjusted EPS up 43.6% to 63.6c and free cash flow of $204.0m. Dividend up 27.5% to 7.00c per share.

Financial highlights
· Revenue up 6.1% to $2,620.0m (2013: $2,469.2m).
· Adjusted EBITA1 up 24.5% to $241.1m (2013: $193.6m).
· Operating margin2 up 1.4ppt to 9.2% (2013: 7.8%).
· Profit after tax up 53.1% to $148.0m (2013: $96.7m).
· Basic EPS up 51.9% to 47.4c (2013: 31.2c) with Adjusted basic EPS3 up 43.6% to 63.6c (2013: 44.3c).
· Proposed final dividend 4.75c per share, resulting in full year dividend of 7.00c per share, a 27.5% increase on 2013 (2013: 5.49c), reflecting the Board's confidence in the outlook for the Company.
· Free cash flow4 $204.0m (2013: $209.0m), 84.6% of adjusted EBITA (2013: 108.0%).
· Net debt of $93.1m as at 31 December 2014 (31 December 2013: $33.0m net cash). Since the completion of the acquisition of Aurora Networks, Inc. ("Aurora Networks") for a headline consideration of $310m on 6 January 2014, net debt has been reduced by $186.1m (66.7%).

Operating highlights
· Increased operating profit through top-line growth due to the Aurora Networks acquisition, improved revenue mix, supply chain efficiency and increased operational efficiency.
o Increased profitability in underlying business (excluding the Networks business) on lower revenue.
o Strong trading in the Networks business; $264.6m revenue, $47.4m adjusted EBITA contribution.
· Further progress made against the Strategic Plan laid out in November 2011:
o Continue to transform core economics:
§ Underlying operating costs5 reduced by $19.3m (7.4%) whilst continuing to invest in growth opportunities.
§ Application of Pace efficiency and effectiveness principles to the Networks business enabled targeted cost and working capital synergies to be achieved ahead of plan.
§ Third consecutive year of strong free cashflow to EBITA generation; aggregate free cash flow of $595.7m over last three years due to continued focus on working capital and cash management.
o Maintain PayTV hardware leadership:
§ Reconfirmed as the market leader in PayTV hardware; global number one in Media Servers6, Set-top boxes ("STBs")7 and Advanced Telco Gateways8.
§ Record PayTV Consumer Premise Equipment ("CPE") revenue in H2 2014 only partially offset a weaker H1 2014 resulting in a 4.8% revenue decline to $2,243.2m (2013: $2,355.4m).
§ Wins achieved and a record number of project launches delivered across all regions with key customers including AT&T, BeIn Sports, Comcast, Liberty Global and Net Brazil.
o Widening out:
§ 231.1% increase in non-CPE revenue (2013: 5.4% increase) to $376.8m (2013: $113.8m) due to the contribution of the Networks business.
§ Strong year for Networks due to robust customer demand which is expected to continue into 2015.
§ Built on the momentum of 2013 with a number of key wins across all areas of our software and services offerings with key customers including Foxtel, TDS Telecom, Frontier Telecom and Viva Broadcast.

more....

JP Morgan Cazenove Overweight 363.45 444.00 457.00 Reiterates

Liberum Capital Hold 363.45 390.00 390.00 Reiterates

Interim Management Statement

Recommended Combination of Pace and ARRIS

Pop!