Results for announcement to the market
Date: 19 May 2016
Rakon Limited (RAK)
Reporting period 12 months to 31st March 2016
Previous reporting period 12 months to 31st March 2015
COMMENTS
Telcos'' infrastructure investment delays reduce earnings for Rakon
o Net loss after tax of NZ$1.7m vs Net profit after tax of NZ$3.2m in FY2015
o Revenue NZ$112.7 million (FY2015 NZ$131.4 million)
o 25% decrease in revenue from Telecommunications major contributor to
decrease in total sales volumes and revenue
o Growth in margin dollars (and % of revenue) from consolidated subsidiaries:
FY2016 NZ$47.9 million (43%) vs NZ$41.8 million (32%) in FY2015
o Increase in operating cash flow: FY2016 NZ$7.3 million vs NZ$3.6 million
operating cash flow loss in FY2015
o New investment in Thinxtra opens up opportunities in Internet of Things
(IoT)
NZD Millions, Audited FY2016 FY2015 % Change
Revenue 112.7 131.4 (14.2)
Underlying EBITDA1 9.0 15.4 (41.4)
Net profit/(loss) after tax(1.7)3.2 (>100.0)
Gross Profit 47.9 41.8 14.6
Operating expenses 47.8 46.2 (3.3)
Operating cash flow 7.3 (3.6) >100.0
Net debt 12.6 13.4 6.0
1 A detailed reconciliation of Underlying EBITDA to net profit/(loss) after
tax, is included at Note B1 of the Audited Financial Statements.
Reduced capital expenditure by telecommunications companies around the world
has seen global high technology company Rakon Limited post a net loss after
tax of NZ$1.7 million on revenue of NZ$112.7 million for the year ended 31
March 2016.
The company''s Underlying EBITDA of NZ$9.0 million was in line with forecasts
issued earlier this year.
Rakon Managing Director Brent Robinson said major network operators around
the world had continued to delay infrastructure investment. This had affected
sales in Rakon''s telecommunications market segment, which remains the
company''s main source of revenue.
"As we flagged earlier this year, major network operators continue to favour
investment in 5G bandwidth and M&A activities over spending on base stations
and other infrastructure," he said.
Mr Robinson said the move to 5G would in itself create a need for increased
infrastructure investment to cope with growing demand for an ever-expanding
range of applications and faster network speeds.
Rakon has strong relationships with both network equipment and original
design manufacturers, meaning it was well-placed to benefit from an upturn in
infrastructure investment, but remained cautious about forecasting exactly
when demand would rebound.
Mr Robinson said the increasing usage of GPS technology in a whole range of
industries was generating significant opportunities for Rakon. Changing
technologies, including the decline of the Personal Navigation Device in
favour of other solutions, was helping to drive increased margins in Rakon''s
Global Positioning business, while the company''s automotive customers were
looking beyond GPS to address advanced connectivity applications for Smart
Cars.
Rakon''s Space and Defence segment was also expecting increased sales in the
coming year, with the introduction of new products following the completion
of several key long-term development projects during FY2016.
Rakon''s move to diversify into the Internet of Things (IoT) business via a
cornerstone shareholding in Thinxtra, which will develop and operate the
SIGFOX global network in Australia and New Zealand, made the company part of
a worldwide network of potential customers for its innovative component
technology, said Mr Robinson.
"The SIGFOX network is the only global network designed with the IoT in mind.
It has the lowest deployment-and-maintenance costs of any system proposed,
making it viable for a huge number of applications that will revolutionise
the way we work and live, and Rakon is excited to be involved in bringing it
to this part of the world," he said.
"It will also generate massive amounts of data, which will in turn require
new infrastructure. Rakon''s track record as an innovator in semiconductors
equips it to be a supplier of choice to customers around the world."
Overall, Rakon was maintaining a strong focus on continuous improvement in
operational excellence and efficiency. In the past year, it has been
standardising its global quality systems to ensure best in class quality and
customer service.
The Directors confirm that this FY2016 preliminary results announcement is
based on audited results.
Brent Robinson
Chief Executive Officer & Managing Director
-ends-
Media Enquiries:
Louise Howe (Media Liaison)
021 206 0985
www.rakon.com
About Rakon
Rakon is a global high technology company and a world leader in its field.
The company designs and manufactures advanced frequency control and timing
solutions for telecommunications, global positioning and space and defence
applications. Rakon products are found at the forefront of communications
where speed and reliability are paramount. The company''s products create
extremely accurate electric signals which are used to generate radio waves
and synchronise time in the most demanding communication applications. Rakon
has five manufacturing plants including two joint venture plants and has five
research and development centres. Customer support centres are located in ten
offices worldwide.
Rakon is proud of its New Zealand heritage; it was founded in Auckland in
1967. It is a public company listed on the New Zealand stock exchange, NZSX,
ticker code RAK.
End CA:00282616 For:RAK Type:FLLYR Time:2016-05-19 08:45:27