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18 November 2011 | Adam Leach
Hard disk manufacturer Pace said it expects profits to be hit to the tune of $9.5 million (£5.9
million) after severe flooding in Thailand caused supply chain disruptions.
Updating investors yesterday, the
company, which provides technology products and components to Sky, Virgin Media
and Canal +, forecast profit of $141 million (£89 million) for the full year
after the supply chain disruptions in its hard disk drive line (HDD).
The company said it expects the
issues to continue to impact on performance throughout next year. It reported
that suppliers for the HDD line have been unable to forecast pricing or
capacity. As a result Pace is looking for alternative suppliers while keeping
customers updated on any potential issues. Overall, it predicts the impact on
2012 performance will be $35-$50 million (£22-£32 million), however, the
company expects to be able to meet its financial obligations. The statement
said: “We will remain within our banking covenants.”
Gaydon, said: “In common with the broader consumer electronics industry, the
immediate impact to our business of the Thailand flooding is significant,
requiring diligent management. Looking beyond this short term supply chain
issue, the strategic review gives us a clear roadmap to increased operating profit
and enhanced quality of earnings.”
Earlier this month, a
report by the Business Continuity Institute (BCI) highlighted the need for
companies to pay more attention to second tier suppliers as 40 per cent of disruptions happen below the direct supplier level.