Rakon back in black with $5.6m first half profit

Rakon staff manufacturing electronic components at Rakon's Auckland plant. Photo / Martin Sykes

Technology company Rakon turned around its half year loss of $6.2 million a year ago to report a net profit of $5.6m in the six months to the end of September.

Rakon managing director Brent Robinson said the company had achieved good recovery and growth across all segments of its business.

It was continuing to expand its market share in the telecommunications market and demand from network infrastructure customers had been strong.

Auckland-based Rakon manufactures frequency control devices, Crystals, XOs, TCXOs, VCXOs and OCXOs, which are electronic components that provide precision timing and are at the heart of modern electronic systems. In particular Rakon positioned itself as a specialist in enabling communications technologies.

For the latest half year revenue from ordinary activities rose 31 per cent to $94.6m, while earnings before interest, tax, depreciation, amortisation and share based payments (ebitda) was $13.5m. No interim dividend will be paid.

Robinson said the latest results continued an improvement that started in the second half of the previous financial year, when Rakon began to rebound from the impacts of the global economic crisis.

"Over the past six months we have continued to invest heavily in product development, recently launching the world's smallest OCXO, the Mercury, and we have many more products in the pipeline.

"In August we acquired a former competitor, Temex, which further enhances our portfolio of products and builds the depth in technical expertise in our organisation," said Robinson.

"New emerging technologies which we supply, such as femtocells, have also begun to ramp up in volume which helps to provide a sound base for long term growth.

"We have also been able to establish strong positions with leading smart-phone manufacturers. In the first half of the year we shipped over 10 million units, which positions Rakon well to accelerate growth in this market as our new Chengdu factory comes on line during the middle of next year."

Rakon had matched its product investment with manufacturing capacity expansion. Both the Indian joint venture and British facility had doubled capacity to meet growing demand from telecommunications customers. Rakon's Auckland facility had also increased capacity as demand from consumer markets started to increase.

Rakon considered it was well positioned in all its markets and was comfortable with the current range of brokers estimates for its 2011 year, which projected ebitda of between $25m and $30m.

- NZPA