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

 

South Island Flooding: Focus Moves To Recovery

As water recedes throughout flood-impacted areas of the South Island, Minister of Civil Defence Nathan Guy has praised the efforts of those who were involved in the response to the flooding... More>>

ALSO:

Superu Report: Land Regulation Drives Auckland House Prices

Land use regulation is responsible for up to 56 per cent of the cost of an average house in Auckland according to a new research report quantifying the impact of land use regulations, Finance Minister Steven Joyce says. More>>

ALSO:

Fund For PPP Plans: Govt Embraces Targeted Rates To Spur Urban Infrastructure

The government's latest response to the Auckland housing shortage will see central government and private sector firms invest in 'special purpose vehicles' to fund essential roading, water and drains that Auckland Council can't fund without threatening its credit rating. More>>

ALSO:

Fletcher Whittled: Fletcher Dumps Adamson In Face Of Dissatisfaction

Fletcher Building has taken the unusual step of dumping its chief executive, Mark Adamson, as the company slashed its full-year earnings guidance and flagged an impairment against Australian assets. More>>

ALSO: