Rakon engineers a return to profit
- 14 December, 2017 10:30
After reported tough trading conditions in its 2017 financial year, 2018 has delivered a promising tail-wind for Rakon.
GPS component developer Rakon is engineering a performance turnaround, returning to profit in the six months to 30 September.
After a tough 2017 year, the company has reported an unaudited net profit after tax of $0.9 million, up from a net loss of $5.7 million in the same six months of last year.
Rakon also reported underlying EBITDA of $3.8 million, an increase of $3.2 million in the same period. Revenue of $48.3 million was up 5 per cent.
Gross profit of $20.1 million increased 21 per cent, while gross margin percentage increased to 42 per cent, up from 36 per cent.
Operating expenses decreased by $1.2 million and the company generated positive operating cash flow of $4.9 million for the half.
Rakon said it has continued its focus on technology development with the release of two world-first product platforms, which are attracting strong interest from customers. These compnents are now being sampled into high speed networks and 5G applications.
Data centre demand, in particular the growing requirement for time synchronisation in data centres, contributed strongly to the improved performance, Rakon said.
"As applications move into the cloud, the need for extremely accurate timing increases."
Global positioning revenue was up 13 per cent. Growth also continued in the higher margin industrial markets such as agriculture, surveying and avionics.
"Current run rates and forecasts support the view that this market is returning to growth after years of decline, resulting from smartphones cannibalising the market for traditional personal navigation devices," Rakon said.
Space and defence revenue was up 8 per cent, largely driven by improved sales of New Zealand-manufactured products into the US defence market.
Delivery of open orders from France will generate higher revenue from the defence market in the second half of the current year, Rakon said.