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


Rakon 1H earnings jump on one-off gain, improved margins

Rakon 1H earnings jump on one-off gain, improved margins

By Rebecca Howard

Nov. 15 (BusinessDesk) - High-tech components maker Rakon reported a lift in first-half earnings as revenue increased and its cost of sales remained stable.

Net profit was sharply higher, largely due to a one-off $7.2 million gain after it changed the way its investment in 'internet of things' start-up Thinxtra is accounted for.

Gross profit was $24.6 million in the six months to Sept. 30, up 22 percent versus the prior period, on a 10 percent lift in revenue to $53 million. Net profit climbed to $9.2 million versus $900,000 in the prior period.

In June the accounting treatment of Rakon’s investment in Thinxtra changed so that it is now recognised at fair value, calculated on the basis of an independent external valuation report. Rakon currently holds 21.4 percent of Thinxtra after it sold down part of its holding in 2017.

Excluding that impact, the firm's underlying earnings before interest, tax, depreciation and amortization rose to $5.9 million from $3.8 million a year earlier.

Stripping out the Thinxtra gain, managing director Brent Robinson said it was pleasing to see "growth in Rakon’s core business with higher sales and margin from the telecommunications and defence market segments."

He noted the increase in forecast demand from the telecommunications market with the continuing roll-out of 4/4.5G and 5G infrastructure. The challenge for Rakon is to capture a share that demand, he said.

Robinson also noted the completion of its acquisition of its Centum Rakon India joint venture in May.

"It was pleasing to see the turnaround in its profit performance under Rakon’s control."

Rakon's three core markets are telecommunications, global positioning, and space and defence. It has five manufacturing plants and six research and development centres.

The stock last traded at 28 cents, down 6.7 percent, but has gained 30 percent this year.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Frog Recruitment: Kiwi Workers Reluctant To Make Business Trips Across The Ditch Despite Trans-Tasman Bubble Opening

When the trans-Tasman travel bubble opens today, many Kiwi companies won't be rushing to buy an air ticket, reluctant to cross the ditch to do business. The latest survey conducted by leading recruitment agency, Frog Recruitment of nearly 1,000 New Zealand ... More>>

Tourism: Employers Welcome Back Working Holidaymakers

Tourism businesses gearing up for the return of Australian visitors from next week will be relieved to learn that they will also have access to an offshore pool of much-needed job candidates, Tourism Industry Aotearoa says. Tourism employers around ... More>>

Commerce Commission: Latest Broadband Report Confirms Improved Performance Of Premium Fibre Plans

The latest report from the Commerce Commission’s Measuring Broadband New Zealand programme shows that the performance of Fibre Max plans has improved substantially. This follows a collaboration between the Commission, its independent testing partner, ... More>>

Air New Zealand: Capital Raise Deferred

Air New Zealand has decided to defer its planned capital raise to later in 2021 allowing more time to assess the impacts of recent developments on the airline’s path to recovery. 'We’ve seen some clearing of COVID-19 clouds recently, with ... More>>

Stats NZ: Prices For Transport And Housing Rise In March 2021 Quarter

Higher prices for transport and housing led to a 0.8 percent lift in the consumers price index in the March 2021 quarter, Stats NZ said today. Prices for getting around rose in the March quarter. Transport prices rose 3.9 percent, the biggest quarterly ... More>>

Stats NZ: New Report Shows Impact Of Demands On Land In New Zealand

A new environmental report released today by the Ministry for the Environment and Stats NZ, presents new data on New Zealand’s land cover, soil quality, and land fragmentation. The land cover data in the report, Our land 2021 , provides the most ... More>>


Stats NZ: March Card Spending Rebounds Despite COVID

There was a lift in retail card spending in March following a fall in the lockdown-disrupted February month, Stats NZ said today. Seasonally adjusted retail card spending rose by $53 million (0.9 percent), compared with February 2021. Visit our website to read ... More>>