Decoders earn Pace men their fortunes

Four directors of Pace-Micro Technology made their fortunes yesterday as the satellite- and cable-decoder maker saw its shares soar on the first day of conditional dealings on the stock market. David Hood, Pace's founder and its largest shareholder, saw his personal worth leap to almost pounds 250m.

Mr Hood, a former design engineer with Thorn EMI who started Pace in 1982, sold about 63 million shares at 172p in a placing to institutional shareholders of half the company's existing stock. As well as raising pounds 108m from the sale he retains a holding in Pace worth almost pounds 130m after shares in Pace jumped to 204p in the so-called grey market. Official dealings on the stock market start next week.

Only large institutions were able to benefit from the 172p placing price as BZW and Panmure Gordon chose a book-building method to fix the price which was only open to large investors.

A spokesman for one of the joint lead managers defended the price achieved for the shares yesterday. He said the book-building method was the best way to reflect the price investors were prepared to pay for the shares.

Forecasts for the current year to 1997 point to rapid growth in earnings of about a third, with profits jumping from pounds 18m to about pounds 23m.

Pace is benefiting from an explosive growth in demand for decoding boxes used in digital satellite and cable television services. These are rapidly succeeding the analogue services that have so far dominated mature markets such as the US.

The market will receive a substantial boost in 1998 if the UK Government proposals for digital terrestrial television succeed.