Listed frequency control manufacturer Rakon (NZX: RAK) has reported a net profit of $0.8 million after tax for the second half of the 2010 financial year, thanks in part to the increased popularity of smart phones.Rakon managing director Brent Robinson sa
Listed frequency control manufacturer Rakon (NZX: RAK) has reported a net profit of $0.8 million after tax for the second half of the 2010 financial year, thanks in part to the increased popularity of smart phones.
Rakon managing director Brent Robinson said the results, with Ebitda of $7.2 million for the second half of the year, were stronger than the first half of the year when a $6.2 million loss after tax was reported.
“Despite the massive impact of the global financial market collapse of 2008 and 2009 we have also enhanced the capability of our global platform and broadened our product range significantly,” Mr Robinson said.
Consumer demand for the GPS product market Rakon works in was up, with sales prices also stabilising.
“Importantly Rakon increased its share of the smart phone market as significant production volumes began to ship to new tier one customers during March 2010,” Mr Robinson said.
Telecommunications companies were making significant investments into new equipment like the frequency control technologies Rakon has developed, with data traffic rapidly rising with iPhone and Blackberry activity. Rakon said it was also seeing increased demand from to femtocell market.
International growth was progressing at a pace Mr Robinson said was “pleasing”, with land purchased and construction planned for a new crystal manufacturing plan at Chengdu.
“We aim to begin commercial operations in July 2011 and look forward to this facility providing us with the platform we need to continue our growth, particularly for consumer applications like smart phones,” Mr Robinson said.
“Rakon now has a global business with an excellent portfolio of products for consumer and telecommunications applications. Our strategy of expanding firstly into Europe and then into India and China, plus our investment in new technologies, puts us in a strong position to build strong bottom line growth now and in the future.”
The company had cash reserves of $46 million at the close of the financial year.
It expects sales for the 2011 financial year to be between $182 million and $204 million, with EBITDA between $25 million and $30 million.
“Rakon considers it is well positioned in all of its markets for 2011. Whilst forecasting the timing of growth from new applications and products can be difficult Rakon is comfortable with the current range of brokers estimates for its 2011,” the company said in its results announcement.
At press time its shares were trading at $1 each.
