Business

Pace profits halve after disk drive supply problems

Set-top box manufacturer Pace has said its profits halved in 2011 after natural disasters hit its supply chain.

Pre-tax profits fell to $54.7m (£34.6m) last year, down from $110.2m in 2010.

The tsunami in Japan and floods in Thailand affected some of the firm's key suppliers, hitting production of hard disk drives that Pace uses.

However, shares in Pace rose after the firm said that while the disk drive shortage would continue this year, the outlook had improved.

Pace shares were up 10% in mid-morning trade.

Pace - which is based in West Yorkshire - had warned in November that flooding in Thailand would hit its profits for the year.

"I am pleased to report results in line with the guidance issued in November 2011," said Pace chief executive Mike Pulli.

"Following the Strategic Review and actions subsequently taken there is a clear route to delivering a successful 2012 for Pace."

Vijay Anand, from Execution Noble, said: "Overall, we think that this set of results should bring relief for Pace investors both on dividends as well as on the impact due to hard disk drive supply shortage."

The company declared a full year dividend of 3.75 cents per share, up from 3.37 cents last year.

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