Rakon increases stake in Australian start-up Thinxtra
Rakon [NZX: RAK], the high-tech components manufacturer, has increased its stake in Australian start-up Thinxtra to almost a fifth as it looks to boost its exposure in expanding machine-to-machine (M2M) connectivity, known as the Internet of Things (IoT).
The Auckland-based company spent $A747,701 to lift its shareholding in Thinxtra to 18.1%, it said in a statement. Rakon bought an initial 11% stake in Thinxtra last December for $A800,000.
Thinxtra plans to launch operations in Australia and New Zealand in the second quarter of this year, offering a network, products and services for machine-to-machine communications. Thinxtra's website doesn't provide more detail on those services.
"Rakon sees opportunities ahead with the IoT where there is exponential growth in the number of devices connected to each other, through the advancement of the IoT network and M2M connectivity," it said. "This investment in Thinxtra provides Rakon an excellent opportunity to leverage future IoT opportunities, both through the investment in Thinxtra itself and the business opportunities that Rakon expects it to bring with Rakon's current technology base and ability to develop new products for the IoT market."
The company said it expected to provide a further update of its plans for the IoT in April.
In January, Rakon warned annual earnings will miss forecast because major telecommunications network operators have delayed their spending on new equipment. Underlying earnings before interest, tax, depreciation and amortisation is expected to be between $9 million and $10 million in the year ending March 31, down from a previous forecast of $15.4 million.
The company has been exiting the smart wireless device market, which didn't deliver big enough margins, to focus on the burgeoning telecommunications sector, and has shifted manufacturing from the UK and France to New Zealand and India as part of a restructure to reduce its global workforce by 45% and slash its operating costs.
Sydney-based Thinxtra was registered with the Australian Securities and Investments Commission on May 31 last year.
Rakon shares last traded at 23c, and have dropped 25% this year.
BusinessDesk receives funding to help cover the commercialisation of innovation from Callaghan Innovation.