Pace Micro Technology reported profits before tax of 8.1 million pounds ($14.2 million) for the year ended June 4. At the same stage last year, the profit number was 5.9 million pounds ($10.4 million). Pace achieved full year revenues of 253.3 million pounds ($445 million) in its most recent fiscal year, an increase of more than 5 percent compared to the previous year, Pace reported July 12.

“The results are slightly ahead of our expectations,” Sue Cox, a technology equity analyst at ABN Amro said. “We had forecast 7 million pounds in profits, while they delivered around 8 million pounds,” she said.

To maintain that success, Pace will have to deliver on its contract with U.S. cable operator Comcast, Cox said. In May, Pace received a contract that guarantees Comcast will buy between $375 million and $550 million worth of set-top boxes throughout the next three years. Deliveries are scheduled to begin before the end of 2005.

“Doing a deal with the biggest pay-TV operator in the world’s biggest pay-TV market gives them a lot of credibility, particularly in terms of generating new contracts in the United States,” Cox said. “Overall, the group is in better shape than it has been in for some time.”

Neil Gaydon, worldwide marketing and sales director at Pace, said one of the major challenges for the company is improving margins. “From an execution point of view, it is about delivering on contract wins,” he said.

(Sue Cox, ABN Amro, sue.cox@uk.abnamro.com)