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

 

Finance: Major Campaign To End "Gross Overtaxation Of Savings"

The campaign – which includes a special web site through which New Zealanders can e-mail their own and other MPs and party leaders – is backed by Age Concern, Consumer NZ, the Financial Services Council and the Taxpayers’ Union. More>>

ALSO:

Scoop Business: Leighton-Led WGP To Build, Manage Transmission Gully

The Wellington Gateway Partnership, led by a unit of ASX-listed Leighton Holdings, has won the $1 billion contract to build the Transmission Gully road north of Wellington. More>>

ALSO:

Gareth Morgan: The Government’s Fresh Water Policy – Revisited

Fresh water quality is the latest area to be in the sights of Gareth Morgan and his research organisation The Morgan Foundation... They found that the fresh water policy was a bit murkier than the Environment Minister let on. More>>

ALSO:

Interest Rates: RBNZ Hikes OCR To 3.5%, ‘Period Of Assessment’ Now Needed

Reserve Bank governor Graeme Wheeler raised the official cash rate as expected, while signalling a pause in rate hikes to assess the impact of moves so far this year. The kiwi dollar sank after Wheeler said its strength was “unjustified” and that the currency could have “a significant fall.” More>>

ALSO:

Fonterra: Canpac Site 'Resize' To Focus More On Paediatrics

Fonterra is looking at realigning its packing operations at Canpac, in the Waikato, to focus more on paediatric nutritionals... The proposed changes could mean around 110 roles may not be required at the site which currently employs 330. More>>

ALSO:

Scoop Business: Postie Plus Brand Gets 2nd Chance With Well-Funded Pepkor

The Postie Plus brand is getting a new lease of life after South Africa’s Pepkor bought the failed retailer’s assets out of administration and said it will use its purchasing power to reduce costs of stock and fatten margins. More>>

ALSO:

Get More From Scoop

 
 
Computer Power Plus

Standards New Zealand

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