Despite revenues being down 12% to $79.4 million for the latest half-year compared with the previous half-year, Rakon remains confident and sees opportunities, managing director Brent Robinson says.
While operating cash flow for the period was up significantly - $15.2 million, compared to $9.1 million – an increase in depreciation and financing costs, plus a higher effective tax rate (due to operating losses in the company’s French division) meant net profit was restricted to $2 million and earnings before interest, tax, depreciation and amortisation were down 16% to $10.4 million.
Rakon’s shares took a hit on the news, dropping to $1.30 today, shedding 25% of their value.
In a statement accompanying the announcement of Rakon’s results for the first half of the 2008-09 year, Robinson says “we still see great opportunities for Rakon in the GPS and Mobile Phone space, even in the current economic climate.
“Also, our investments in businesses in the UK, France and India have given us diversification into new infrastructure markets and added new opportunities for us,” he says.
Robinson says Rakon’s larger customers have shown good growth, but smaller, second-tier customers are struggling to compete in today’s environment.
More details of the half-year results can be found on the NZX website.