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

 

Tourism: China Southern Airlines To Fly To Christchurch

China Southern Airlines, in partnership with Christchurch Airport and the South Island tourism industry, has announced today it will begin flying directly between Guangzhou, Mainland China and the South Island. More>>

ALSO:

Dodgy: Truck Shops Come Under Scrutiny

Mobile traders, or truck shops, target poorer communities, particularly in Auckland, with non-compliant contracts, steep prices and often lower-quality goods than can be bought at ordinary shops, a Commerce Commission investigation has found. More>>

ALSO:

Auckland Transport: Government, Council Agree On Funding Approach

The government and Auckland Council have reached a detente over transport funding, establishing a one-year, collaborative timetable for decisions on funding for the city's transport infrastructure growth in the next 30 years after the government refused to fund the $2 billion of short and medium-term plans outlined in Auckland's draft Unitary Plan. More>>

ALSO:

Bullish On China Shock: Slumping Equities, Commodities May Continue, But Not A GFC

The biggest selloff in stock markets in at least four years, slumping commodity prices and a surge in Wall Street's fear gauge don't mean the world economy is heading for another global financial crisis, fund managers say. More>>

ALSO:

Real Estate: Investors Driving Up Auckland Housing Risk - RBNZ

The growing presence of investors in Auckland's property market is increasing the risks, and is likely to both amplify the housing cycle and worsen the potential damage from a downturn both to the financial system and the broader economy, said Reserve Bank deputy governor Grant Spencer. More>>

ALSO:

Annual Record: Overseas Visitors Hit 3 Million Milestone

Visitor arrivals to New Zealand surpassed 3 million for the first time in the July 2015 year, Statistics New Zealand said today. The record-breaking 3,002,982 visitors this year was 7 percent higher than the July 2014 year. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news