Rakon, the high-tech components manufacturer, has returned to profitability while doubling its debt and turning to a negative cash outflow, after an overhaul of operations which saw it close its UK plant and shift production to India and New Zealand.
Net profit rose to $3.2 million in the year ended March 31, from a loss of $83.8 million a year earlier, the Auckland-based company said in a statement. Revenue dropped 12 per cent to $131.4 million. Underlying earnings before interest, tax, depreciation and amortisation rose to $15.4 million, slightly ahead of its November guidance of between $10 million and $15 million, and up from a loss of $7.5 million in the previous year.
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The company has been exiting the smart wireless device market, which didn't deliver big enough margins, to focus on the burgeoning telecommunications sector, and has shifted manufacturing from the UK and France to New Zealand and India as part of restructuring to reduce its global workforce by 45 per cent and slash its operating costs.
"Our strategy to focus on higher margin products and markets has result in much improved operating margins for the year, supported by a strong second half performance," Rakon chief executive Brent Robinson said. "It is pleasing that the impact of our significant structural realignment programme during FY2014 - FY2015 has result in this improvement in our financial results."
