Rakon powers back into profit

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

Rakon powered back into profit as it lifted full year revenue 31 per cent to $189.3 million, with growth across all segments of its business.

Managing director Brent Robinson said Rakon - which makes frequency control products - had capitalised on massive growth in the use of smart wireless devices and data usage across telecommunications networks.

It had increased market share, not only into the companies that designed and manufactured consumer devices, but also into the manufacturers of telecommunications infrastructure, Robinson said.

The latest results continued an improvement that started in the second half of the previous financial year, when the company began its rebound from the impacts of the global economic crisis.

In the year to the end of March, Rakon reported a net profit of $8.5m, compared to a loss of $5.4m the previous financial year.

No dividend will be paid, in line with the company's policy that no dividend payments will be made for the foreseeable future, with surplus funds to be used for growth opportunities.

Robinson said the benefits had started to emerge of Rakon's strategy of establishing a globally competitive business with a broad range of technology-leading products.

The company had expanded capacity at all its facilities to meet current and future demand, while its facility in Chengdu, China, was close to beginning trial production, and was on track for official opening in July.

Rakon continued to invest substantially in product development to ensure its products provided breakthroughs in performance and value, Robinson said.

Independent analysts and the company's customers forecast growth in wireless data in the next five years would accelerate rapidly by a factor of 40 times. To manage that, networks needed to expand.

The overall business was expected to continue growing during the current financial year.

"Our sales volumes for the first 6 weeks of the new year are well up on the same period in the prior year which gives us confidence that FY12 will build further on the successes of last year."

- NZPA