Shares in Pace Micro Technology crashed as it warned of a collapse in sales of its TV set-top boxes.

Around £480 million was wiped off the value of the Saltaire-based company as it also halted shipments to its largest customer, cable company NTL.

The firm's shares ended trading yesterday at just £1, a fall of more than £2 or 67 per cent. Today they crept back up to £1.08 in early trading.

The company blamed disappointing take-up of its boxes in the US and the fall-out from the debt crisis affecting cable companies NTL and Telewest.

Pace announced it was to halt shipments to NTL of its boxes which allow viewers to access cable and satellite channels.

Malcolm Miller, Pace's chief executive officer, said that the bulk of the lost revenues came from its inability to ship to cash-strapped cable operator NTL because it could not get credit insurance.

Mr Miller said the company, the world's third largest set-top box supplier - behind Motorola and Scientific-Atlanta - had put a halt to 300,000 set-top boxes it was supposed to ship to NTL.

Mr Miller added: "We have orders from BSkyB, Telewest and AOL Time Warner but this (NTL deal) and a few others have driven a hole through the revenues."

Pace said the decline in sales would have a substantial impact on second half earnings for 2002, but it still expected to make a profit. Mr Miller expected pre-tax profits in the second half to May 2002 to be around £3 million, down from £20.9 million in the first half.