Excitement inside deafens protest

Anti-war protesters demonstrate outside Rakon's annual meeting yesterday. Picture / Dean Purcell

The excitement at Rakon's annual meeting yesterday came from the Auckland-based technology company's earnings forecast announcement inside the meeting room, not the protesters waving placards outside.

Full-year earnings before interest and tax was expected to exceed the $11.8 million forecast by almost $3 million, said chairman Bryan Mogridge, thanks to a favourable exchange rate and strong sales.

Rakon's high- performance quartz crystal components are used in global positioning systems (GPS) and microwave communications, including some military applications overseas.

Around a dozen protesters, led by Students for Justice in Palestine spokesman Omar Hamed, demonstrated outside, angry about the company's links with the US military.

However investors, who passed through several security checks to gain entry to the company's first annual meeting since listing on the NZX in May, seemed unfazed.

They did not ask any questions about the annual report or about the wider business environment.

Shares in Rakon were issued at $1.60. After the first day of trading in May they closed up 47.5 per cent at $2.36. Yesterday, they closed up 3c at $3.20.

Rakon reported a $4.8 million net profit for the financial year, up 65 per cent on the year before. It has forecast a $7.2 million net profit for this financial year in its prospectus.

Mogridge said the company was on track for a good result for the first six months, but cautioned against reading this as a guide to the full year.

"It is too early to ascertain whether or not the demand will continue at this level as it naturally requires retail off-take of our customers' products to determine the re-order level."

Managing director Brent Robinson said Rakon was strengthening its presence in Asia, a region which accounted for 54 per cent of sales.

It was developing a smaller TCXO unit, to be launched about a year from now, and was expanding its presence in non-GPS markets.

Robinson said the company planned significant capital investments in the next year, including $4 million clean-room expansion and development of new temperature testing equipment.