Companies set Pace with profit increase (From Bradford Telegraph and Argus)

Companies set Pace with profit increase

10:00am Wednesday 4th March 2009

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Two Bradford companies have unveiled recession-busting results for 2008 and are looking ahead with confidence.

Provident Financial, the specialist lender, lifted profits by 12 per cent to £129 million – and could have done twice as much business.

And Saltaire-based digital TV technology group Pace plc says it underwent a transformation last year, resulting in it becoming one of the world’s top three digital TV product suppliers.

The board has raised expectations for the year ahead and for the first time since 2002 the cash-rich company is paying shareholders a dividend.

Pace chief executive Neil Gaydon said: “Our focus on having the right products, at the right time, to fuel the digital TV revolution has delivered excellent results and we will continue to grow market share.”

Doorstep lender Provident Financial gained an extra 200,000 customers last year as riskier borrowers were frozen out by mainstream lenders.

Customer numbers rose ten per cent to 2.17 million, but it turned away hundreds of thousands more shunned by high street banks.

The company has tightened up lending criteria for the doorstep arm and accepted less than 20 per cent of almost one million applicants for its Vanquis credit cards.

Peter Crook, chief executive, said: “Despite operating in an increasingly under-served market where demand for our products is high, we have deliberately constrained customer growth to levels which are consistent with lending responsibly in the current environment.

“We maintain a uniquely close contact with our customers to ensure that we remain in touch with their current circumstances and can respond quickly to any changes.

“The group has a strong balance sheet and has recently further strengthened its funding position. It has committed facilities of £1.1 billion which provide headroom of over £250 million with no scheduled maturities during 2009.

“Despite the challenging economic background, Provident Financial remains very well placed to deliver further high-quality growth in 2009.”

The full-year dividend has been maintained at 63.5p.

Pace achieved record revenues of £745.5 million, compared with £250 million and increased group profits to £28.5 million, against £15.4 million in the year to December 31.

Comparative figures for 2007 are for seven months and exclude the former Philips Electronics set-top box business which it acquired in April 2008 which now trades as Pace France.

The group ended the year with a strong balance sheet and net cash of £37.7 million, compared with borrowings of £12.1 million, and new banking facilities.

The directors are recommending a full-year payment 0.6p a share.

Pace increased shipments substantially to 13.1 million set-top boxes and increased market share through the Pace France acquisition and organic growth.

More than 20 new high definition products were launched which it says none of its competitors matched.

Neil Gaydon said: “We set out our ambitions to grow Pace’s market share, but we have also placed a major emphasis on building a resilient business. I am very pleased to see that this strength enabled us to deliver such strong growth against a backdrop of economic downturn.

“As Pace enters 2009, the group is in a strong position to capture new opportunities in the global shift to digital TV. Pace has seen little impact on demand for its products but continues to take a prudent and cautious view of the market, in particular, monitoring trends for any impact of the global economic climate.”

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