- Release Date: 13/11/14 09:17
- Summary: HALFYR: RAK: RAKON HY2015 Preliminary Results Announcement
- Price Sensitive: No
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RAK 13/11/2014 09:17 HALFYR REL: 0917 HRS Rakon Limited HALFYR: RAK: RAKON HY2015 Preliminary Results Announcement Rakon Limited Results for announcement to the market Reporting period 6 months to 30th September 2014 Previous reporting period 6 months to 30th September 2013 Unaudited Amount NZ$000 % Change Revenue from ordinary activities 61,371 -24% Underlying EBITDA c (Earnings before interest, tax, depreciation, amortisation, impairment, employee share schemes, non-controlling interests, adjustments for associates and joint ventures share of interest, tax & depreciation and other non-cash items) 4,265a 191% (Loss)/profit from ordinary activities after tax attributable to security holders (3,368) b 92% Net (loss)/profit attributable to security holders (3,368) b 92% Note a: includes share of Underlying EBITDA from associates and joint ventures of $3,518,000 (September 2013: $2,870,000). b: includes equity accounted earnings from associates and joint ventures of $1,770,000 (September 2013: $1,365,000). c: Further information regarding the disclosure and use of non-GAAP financial information is disclosed at Note 3 (Notes to the Unaudited Consolidated Interim Financial Statements) in this results announcement. Amount per security Imputed amount per security Interim / Final Dividend Nil dividend proposed Nil dividend proposed Record Date Not Applicable Not Applicable Dividend Payment Date Not Applicable Not Applicable COMMENTS 13 NOVEMBER 2014 (RAK) RAKON INTERIM RESULT DEMONSTRATES POSITIVE IMPACT OF STRATEGIC REALIGNMENT INITIATIVES - Improvement in unaudited net loss after tax: HY2015 NZ$3.4 million vs NZ$45.7 million in HY2014 - Turnaround in Underlying EBITDA*: profit of NZ$4.3 million in HY2015 vs loss of NZ$4.7 million in HY2014 - Favourable effect of growth in Telecommunications - Lower net debt mainly from improved working capital efficiencies and reduced capital spend - Reaffirm FY2015 earnings guidance of Underlying EBITDA of between NZ$10 million to NZ$15 million NZD Millions, Unaudited HY15 HY14 % Change FY14 Revenue 61.4 80.5 (23.7) 150.0 Underlying EBITDA* 4.3 (4.7) (>100.0) (7.5) Net loss after tax (3.4) (45.7) (92.6) (83.8) Operating cash flow (0.0) 7.8 (>100.0) 12.5 Bank borrowings 11.8 36.9 (68.0) 10.9 Net debt 8.2 27.1 (70.0) 6.4 * A detailed reconciliation of Underlying EBITDA to net loss after tax, is included at Note 3 of the Unaudited Interim Financial Statements. Rakon Limited (NZX: RAK) ("Rakon" or "the Company") today reports an unaudited net loss after tax for the half year ending 30 September 2014 ("HY2015") of NZ$3.4 million, a significant improvement from the NZ$45.7 million net loss incurred in the half year ending 30 September 2013. Pleasingly, HY2015 'Underlying EBITDA' was a profit of NZ$4.3 million compared to a loss of NZ$4.7 million in HY2014. Brent Robinson, Rakon CEO, said "the result is in line with our expectations for the first half of FY2015. The positive impact of our significant structural realignment programme taking place over 2013-2014 is starting to show through in our financial results. While revenues have declined as planned, it is pleasing to see that our strategy to focus on better product and operating margins is taking effect." The Company's closure of its Lincoln, UK plant has been completed within our targeted timeframe and the manufacturing capability has been transferred to New Zealand resulting in increased efficiencies. While the first half result continued to carry the Lincoln plant operating expenses, Mr Robinson said "the company will now benefit from reduced operating expenses in the second half as a result of the closure". Rakon has experienced growth in the Telecommunications market following on from FY2014. New mobile phone 4G technology is driving new telecommunications infrastructure, with Rakon capturing strong growth from 4G deployments of new Base Station equipment. Growth in Telecommunications contributed positively to the profitability of all key business units, including an increase in earnings contribution from Rakon's joint venture, Centum Rakon India. Rakon reported borrowings of NZ$12.0 million and net debt of NZ$8.2 million. Net debt was considerably below the company's internal forecast for 30 September 2014 due to a combination of working capital and cash management improvements and reduced capital spend. Operating cash flows of -NZ$30k were NZ$3.6 million before adjusting for cash outflows relating to FY2014 restructuring. The Company is forecasting higher profitability over the second half of FY2015 compared to the first half of FY2015, as a result of a number of factors including continued growth that is expected in the Telecommunications market and a reduction in operating costs following the Lincoln plant closure. In addition, Rakon expects increased Space and Defence revenues as a result of the delivery of key projects timed during the second half of FY2015 and the company expects to see the benefits flowing through from an improved NZD:USD exchange rate and a strong hedge position. "The company is now positioned to take advantage of the structural realignment programme and return to profit with the second half outlook for stronger profitability. Rakon has already significantly reduced its operating expenses compared to FY2014 which will further reduce in the second half. The company will focus on increasing throughput in manufacturing volumes in New Zealand following the transfer of production from the UK as well as the increased product demand, to take further advantage of the Telecommunications growth that we are experiencing", Mr Robinson said. Rakon reaffirms its FY2015 earnings guidance of Underlying EBITDA of between NZ$10 million to NZ$15 million. The Directors confirm that this HY2015 preliminary results announcement is based on unaudited results. A detailed reconciliation of Underlying EBITDA to net loss after tax, is included at Note 3 of the Unaudited Interim Financial Statements. -ends- Contact: Brent Robinson Chief Executive Officer Rakon 021 206 0985 www.rakon.com Directors Declaration (NZX Listing Rules Appendix 1, 3.1 & 3.2) The Directors declare that the selected consolidated financial information on pages 4 to 16 have been prepared in compliance with applicable Financial Reporting Standards and extracted from the unaudited interim financial statements. The accounting policies the Directors consider critical to the portrayal of the company's financial condition and results which require judgements and estimates about matters which are inherently uncertain are disclosed in note 2 of the unaudited consolidated interim financial statements that form part of this announcement. End CA:00257600 For:RAK Type:HALFYR Time:2014-11-13 09:17:58
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