Pace shares fall 40% on profit warning linked to Japan

Shares in the UK TV set-top box maker, Pace, have slumped 40% after the firm issued a profit warning blamed in part on the Japanese earthquake and tsunami.


Pace has revised its annual profits down to between £97m ($150m) and £110m.

The company said the Japan disaster had added to supply chain problems, while profits from its European division were also below expectations.

Pace registered the biggest drop by far on the London Stock Exchange in early trading.

Several companies have blamed the 15 March earthquake in Japan for disruption of their their supply chains, as many have been unable to get hold of key components.

Some carmakers were forced to halt production completely.

Pace also said its costs had risen after it had built up its inventory ahead of schedule, causing a "higher than planned cash outflow".

However, the firm's first-quarter revenues were up 24% on last year.

"It is clear from today's statement that despite revenues and product shipments being on track, we have made a disappointing start to the financial year with our profitability," said Neil Gaydon, chief executive.

"Although we will now not be able to make up this first half under-performance in the second half, we continue to drive long-term growth and profitability."

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