Menu
Tough trading blamed for disappointing Rakon result

Tough trading blamed for disappointing Rakon result

Despite increased loss, Rakon's cashflow and balance sheet improves.

GPS component manufacturer Rakon reported tough trading conditions in 2017.

GPS component manufacturer Rakon reported tough trading conditions in 2017.

Credit: Supplied

Auckland-based GPS component manufacturer Rakon has reported an increased net loss after tax of $13.6 million for the year ended 31 March 2017.

That compares with a loss of just $1.7 million in 2016. Revenue fell to $94.7 million from $112.7 million.

The result, however, includes non-recurring impairments of $6.6 million and restructure costs of $3 million. The company increased positive operating cash flow to $9.5 million from $7.3 million in 2016.

Rakon said a 16 per cent decrease in revenue from telecommunications was a major contributor to decrease in total sales volumes and revenue.

Debt of $4.5 million was reduced from $12.6 million in 2016.

Rakon managing director Brent Robinson said the company continued to be affected in its key telecommunications market by reduced demand from equipment makers, as global network operators delayed infrastructure investment.

“While we experienced a lift in business in the telecommunication market in the final quarter, it was not enough to recover the reduced demand that had negatively affected revenue in the first three quarters” he said.

Rakon was the target of shareholder activists last year, who succeeded in removing a director from the board.

During the year Rakon targeted a 20 per cent reduction in operating costs, with an actual reduction of $8.9 million achieved before the impact of restructuring costs of $3 million.

The reduction in operating costs and the US$10 million proceeds that resulted from agreements signed with Siward Crystal Technology (“Siward”) allowed the Company to pay down a large portion of its debt.

“While the arrangement with Siward provided us an opportunity to improve our balance sheet position, the partnership brings further long term opportunities for both parties," Robinson said.

"This partnership will give both companies a broader range of products and alternative channels into new and existing markets."

Impairments of NZ$6.6 million included an impairment of goodwill of $1.9 million and an impairment of the investment in Centum Rakon India of $3.2 million. Rakon also increased inventory obsolescence provisions by $4.2 million.

“Although the result for 2017 is very disappointing, there has been a number of achievements in the year that provide Rakon a stronger position from which improved results can be achieved in the coming year," Robinson said.


Follow Us

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

Tags mobile devicesTelecommunicationsGPS technologymobile networksrakon

Events

Featured

Slideshows

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners

This year’s Reseller News 30 Under 30 Tech Awards were held as an integral part of the first entirely virtual Emerging Leaders​ forum, an annual event dedicated to identifying, educating and showcasing the New Zealand technology market’s rising stars. The 30 Under 30 Tech Awards 2020 recognised the outstanding achievements and business excellence of 30 talented individuals​, across both young leaders and those just starting out. In this slideshow, Reseller News honours this year's winners and captures their thoughts about how their ideas of leadership have changed over time.​

Meet the Reseller News 30 Under 30 Tech Awards 2020 winners
Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security

Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security

This exclusive Reseller News Exchange event in Auckland explored the challenges facing the partner community on the cloud security frontier, as well as market trends, customer priorities and how the channel can capitalise on the opportunities available. In association with Arrow, Bitdefender, Exclusive Networks, Fortinet and Palo Alto Networks. Photos by Gino Demeer.

Reseller News Exchange Auckland: Beyond the myths — how partners can master cloud security
Reseller News welcomes industry figures at 2020 Hall of Fame lunch

Reseller News welcomes industry figures at 2020 Hall of Fame lunch

Reseller News welcomed 2019 inductees - Leanne Buer, Ross Jenkins and Terry Dunn - to the fourth running of the Reseller News Hall of Fame lunch, held at the French Cafe in Auckland. The inductees discussed the changing face of the IT channel ecosystem in New Zealand and what it means to be a Reseller News Hall of Fame inductee. Photos by Gino Demeer.

Reseller News welcomes industry figures at 2020 Hall of Fame lunch
Show Comments