Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 


Rakon more than doubles annual loss on writedowns, charges

Rakon more than doubles annual loss on writedowns, restructuring

By Paul McBeth

May. 22 (BusinessDesk) - Rakon, whose shares have shed 86 percent of their value in the past five years, more than doubled its annual loss after writing down the value of assets and spending more on restructuring ailing businesses.

The Auckland-based company made a loss of $83.8 million in the 12 months ended March 31, from a loss of $32.8 million a year earlier, making it the manufacturer's worst loss and the fourth in five years. Excluding minority interests, the loss was $79.4 million, or 41.3 cents per share, compared to $31.8 million, or 16.6 cents.

Rakon took a $33 million loss on the sale of its Chinese investment, and a further $19.9 million in impairment charges, the bulk of which were in writing down the value of its UK business. The company also faced costs of $7.2 million restructuring its business as it shifts manufacturing back to New Zealand from the UK and recognised $15.4 million in depreciation.

"During the year we have made some difficult but necessary decisions to restructure the business in order to return Rakon to future profitability and better margins," chief executive Brent Robinson said in a statement. "We expect FY2015 to be a year where we will start to benefit from the structural realignment initiatives in which costs are being taken out of the business."

Earlier this month Rakon had flagged widening losses,after writing down goodwill and depreciating plant and equipment. The shares were unchanged at 22 cents, valuing the former darling of the stock market at $42 million.

The company made a loss before interest, tax, depreciation and amortisation and other write-downs of $7.5 million, near the top of its forecast range between $5 million and $8 million. Underlying Ebitda was $5.1 million a year earlier.

Revenue dropped 15 percent to $150 million in the year on Rakon's exit from the smart wireless device market following the sale of its stake in a Chinese factory.

Rakon generated more cash than it spent from operations in 2014, with an inflow of $12.5 million compared to an outflow of $2.7 million in 2013. As at March 31, it held cash and equivalents of $4.8 million.

The company held bank debt of $10.9 million at the end of the financial year, down from $36.1 million a year earlier, and will lift its total facility to $22 million to help fund its restructuring.

Rakon's result is still being audited, but the directors said they "are not likely to be subject to qualification or be materially different to those presented."

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Sky City : Auckland Convention Centre Cost Jumps By A Fifth

SkyCity Entertainment Group, the casino and hotel operator, is in talks with the government on how to fund the increased cost of as much as $130 million to build an international convention centre in downtown Auckland, with further gambling concessions ruled out. The Auckland-based company has increased its estimate to build the centre to between $470 million and $530 million as the construction boom across the country drives up building costs and design changes add to the bill.
More>>

ALSO:

RMTU: Mediation Between Lyttelton Port And Union Fails

The Rail and Maritime Union (RMTU) has opted to continue its overtime ban indefinitely after mediation with the Lyttelton Port of Christchurch (LPC) failed to progress collective bargaining. More>>

Earlier:

Science Policy: Callaghan, NSC Funding Knocked In Submissions

Callaghan Innovation, which was last year allocated a budget of $566 million over four years to dish out research and development grants, and the National Science Challenges attracted criticism in submissions on the government’s draft national statement of science investment, with science funding largely seen as too fragmented. More>>

ALSO:

Scoop Business: Spark, Voda And Telstra To Lay New Trans-Tasman Cable

Spark New Zealand and Vodafone, New Zealand’s two dominant telecommunications providers, in partnership with Australian provider Telstra, will spend US$70 million building a trans-Tasman submarine cable to bolster broadband traffic between the neighbouring countries and the rest of the world. More>>

ALSO:

More:

Statistics: Current Account Deficit Widens

New Zealand's annual current account deficit was $6.1 billion (2.6 percent of GDP) for the year ended September 2014. This compares with a deficit of $5.8 billion (2.5 percent of GDP) for the year ended June 2014. More>>

ALSO:

Still In The Red: NZ Govt Shunts Out Surplus To 2016

The New Zealand government has pushed out its targeted return to surplus for a year as falling dairy prices and a low inflation environment has kept a lid on its rising tax take, but is still dangling a possible tax cut in 2017, the next election year and promising to try and achieve the surplus pledge on which it campaigned for election in September. More>>

ALSO:

Job Insecurity: Time For Jobs That Count In The Meat Industry

“Meat Workers face it all”, says Graham Cooke, Meat Workers Union National Secretary. “Seasonal work, dangerous jobs, casual and zero hours contracts, and increasing pressure on workers to join non-union individual agreements. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news