REL: 0926 HRS Rakon Limited
FLLYR: RAK: FY2018 Preliminary Results Announcement
17 May 2018
Rakon Limited releases its preliminary financial results for FY2018. This
release includes two supporting attachments:
1. FY2018 Preliminary Results Announcement
2. FY2018 Preliminary Financial Statements
Strong profit posted from improvement in core business and other gains
o Net Profit after tax of NZ$10.0 million vs Net loss after tax of NZ$13.6
million in FY2017
o Revenue NZ$101.1 million (FY2017 NZ$94.7 million)
o 7% increase in total revenue with Space & Defence market as major
o Non-recurring gains included in profit result
o Net cash of NZ$7.4 million an improvement from NZ$4.5 million of net debt
o Positive operating cash flow of NZ$7.9 million
A return to profit in core business and other gains has seen global high
technology company Rakon Limited ("Rakon" or the "Company") post a net profit
after tax of NZ$10.0 million on revenue of NZ$101.1 million for the year
ended 31 March 2018.
The company's Underlying EBITDA of NZ$12.1 million was in line with forecasts
issued earlier in the year, to report Underlying EBITDA of between NZ$10.7
million to NZ$12.7 million.
Rakon Managing Director Brent Robinson said the company had achieved growth
in two of its three core markets, Space & Defence and Global Positioning,
which has contributed to a 7% increase in total revenue.
"It is pleasing to see our revenue growing again, with the increase in Space
& Defence coming from an improved product offering to both new and existing
The strong profit result includes a number of non-recurring gains:
o A gain from the sale of the property in France of NZ$2.1 million, with cash
proceeds of NZ$4.5 million.
o A gain from the partial sale of shares in Thinxtra of NZ$1.9 million, with
cash proceeds of NZ$3.2 million.
o A net dilution gain on Thinxtra shares of NZ$4.8 million, resulting from an
equity accounted net asset gain following Thinxtra's successful capital
During the year the company had achieved solid progress with strategic
objectives regarding manufacturing partnerships and platforms. The transfer
of a technology license to Siward was mostly complete and following balance
date the company had announced a subsequent event, completing a buy-out of
51% of the shares of Centum Rakon India for US$5.5 million.
"The acquisition of Centum Rakon India is a pivotal strategic decision that
gives us the opportunity to grow profits. Having total ownership and full
decision-making control means that we can leverage the benefits that this
established low cost manufacturing platform offers".
With the company achieving positive operating and investing cash flows in the
period, the balance sheet moved from a net debt position to having NZ$7.4
million in net cash. This allowed Rakon to complete the acquisition of Centum
Rakon India after balance date from its own resources.
Although the company had achieved a flat revenue performance (USD currency
basis) in its core market of Telecommunications, margins had improved. "The
technology and solution design requirements for next generation 5G
telecommunication networks and applications is becoming clearer, with Rakon
well positioned with its product and technology offering".
The Company announces today that Chair Mr. Bryan Mogridge will retire at the
2018 Annual Shareholders Meeting (ASM). Mr. Mogridge signalled at the 2016
ASM that he would retire before his next re-election. Mr. Mogridge is to be
replaced as Chair by Mr. Bruce Irvine, who will be seeking re-election at the
2018 ASM. Mr Irvine has been a director of Rakon since 2006 and has been the
Chair of the Audit & Risk Committee during that period. Currently a search is
under way via the firm Sheffield, to seek interest for a replacement
The company reports total equity of NZ$87.1 million with a net asset backing
per share of NZ$0.38.
The Directors confirm that this FY2018 preliminary results announcement is
based on audited results.
Chief Executive Officer & Managing Director
Simon Bosley (Chief Financial Officer)
09 571 9206
Louise Howe (Media Liaison)
021 206 0985
End CA:00318088 For:RAK Type:FLLYR Time:2018-05-17 09:26:37