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- Release Date: 16/01/14 10:52
- Summary: GENERAL: RAK: Announcement On The Proposed Closure Of Rakon UK Operations
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RAK
16/01/2014 08:52
GENERAL
REL: 0852 HRS Rakon Limited
GENERAL: RAK: Announcement On The Proposed Closure Of Rakon UK Operations
16 JANUARY 2014 (RAK)
ANNOUNCEMENT ON THE PROPOSED CLOSURE OF RAKON UK OPERATIONS (LINCOLN)
Rakon Limited (NZX:RAK) announces, that it has advised employees of its
United Kingdom (UK) subsidiary (Rakon UK Limited), of its intent to enter
consultation for a proposed closure of its Lincoln, UK plant. This follows a
review by the Rakon Board of Directors determining that duplicate overhead
structures and manufacturing capability exists between the Lincoln and New
Zealand operations. The proposal is for a full closure of the plant, with the
manufacturing of products to be shifted to Rakon's New Zealand plant. Rakon
will continue to maintain a research & development centre in the UK, based at
Harlow.
There is no fixed timeline associated with the consultation or proposed
closure. Should the proposal to restructure be confirmed in the current
financial year, there is expected to be further restructure provisions
reported that would result in a change to previous earnings guidance for
FY2014. EBITDA would then trade in the range of -$8million to -$5million
(previous guidance -$3m to $0), with a Net Loss After Tax in the range of
-$59million to -$55million (previous guidance -$54m).
The proposal does not impact on Rakon's target to reduce bank borrowings to
below $12million, by 31 March 2014.
Rakon has previously announced plans to return to an EBITDA profitability
range of $10million to $15million in FY2015. This guidance remains intact.
Once the consultation process is completed, the market will be updated
accordingly.
-ends-
Contact:
Simon Bosley (CFO)
Rakon (09) 571 9323
www.rakon.com
End CA:00246110 For:RAK Type:GENERAL Time:2014-01-16 08:52:18
