Rakon back in the black
Growth in key markets among reasons for turn-around
Rakon turned to a first-half profit from a loss a year earlier, citing growth across the technology company’s key markets, improved margins and lower costs. The Auckland- based company posted a profit of $908,000 in the six months ended September 30, from a loss of $5.7 million loss a year earlier.
Revenue advanced 5.1 per cent to $48.3m, as operating expenses dropped 5.7 per cent to $19.5m, it said.
Managing director Brent Robinson said the company, which designs and manufactures advanced frequency control and timing products, had achieved modest revenue growth across all its key market segments of t elecommunications, global positioning, and space and defence.
While the telecommunications market remained subdued, he said the company had strong sampling for two new product platforms that could lead customers’ next-generation technology requirements.
“It was pleasing to see both improved margins and a reduction in operating costs, where action had been taken in recent years to improve results,” Robinson said.
Rakon generated positive cash flow in the period of $4.9m, compared with negative cash flow of $600,000 in the year-earlier period, which helped reduce net debt to $30,000 from $19.7m.
First-half underlying earnings before interest, tax, depreciation and amortisation (ebitda) jumped to $3.8m from $600,000 in the year-earlier period and the company reiterated its forecast for full-year earnings on that measure of $10.7m to $12.7m.
In its largest market of New Zealand, underlying ebitda lifted to $4m from $292,000 a year earlier, while its Chinese investments boosted earnings to $1.4m from $809,000.
In the United Kingdom, underlying ebitda dropped to $815,000 from $1m, and in India earnings fell to $371,000 from $531,000. In France, the underlying ebitda loss narrowed to $1.3m from $1.6m, while in Australia the loss widened to $1.3m from $921,000.
Rakon won’t pay a first-half dividend.
The company’s shares closed up 1.5c yesterday at 23c.