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Daily ShareChat: Rakon

By Jenny Ruth

Thursday 29th July 2010

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 Jenny Ruth

Crystal timing devices manufacturer Rakon's 400,000 euro (NZ$709,220) purchase of France-based competitor Temex is positive and should hasten the turn-around in both company's under-performing and loss-making French operations, says Jason Familton, an analyst at First NZ Capital.

Rakon's French operations lost NZ$4.2 million before foreign exchange movements in 2009 and $6.1 million in 2010, having made losses since they were acquired as part of the C-Mac acquisition in February 2007.

"We understand Temex has revenue of about 11 million euro per annum and is budgeted to be very modestly profitable in the second half. We have not assumed any significant synergies at this stage," Familton says.

Rakon has significant growth opportunities in the smartphone, telecommunications infrastructure and femtocell markets, he says.

"The Temex acquisition also increases the company's exposure to the high-performance OCXO markets."

Temex, a more than 30 year-old business, has a primary focus on high-precision OCXOs into the space, aviation, under-sea telecommunications, mining exploration and defence markets.

"Execution, as always, remains the key and, after earnings disappointments in 2009 and 2010, the company needs to deliver on its earnings guidance to regain the market's confidence," Familton says.

Rakon has forecast earnings before interest, tax, depreciation and amortisation in the year ending March 2011 will be between $25 million and $30 million.

Recommendation: Outperform.

Daily ShareChat articles report how the main experts in the market might view a certain share and we provide this commentary as a useful resource for investors. Content on this site does not in any way constitute a recommendation to buy, hold or sell any particular share. Investors should always seek professional advice before making any investment decisions.

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Get quotes for Rakon Limited Ordinary Shares (RAK)
NZX Annoucements for RAK
27 Aug 2010 SSHO: RAK: SSHO (Macquarie Group Limited)
10 Aug 2010 GENERAL: RAK: Rakon completes acquisition of Temex
3 Aug 2010 SSH: RAK: SSH (Macquarie Group Limited ('MQG'))
30 Jul 2010 RELINT: RAK: Officer's Ongoing Disclosure Notice (Graham Leaming)
28 Jul 2010 ALLOT: RAK: Rakon: Notice of Allotment of Securities
23 Jul 2010 DIRECTOR: RAK: Rakon Directors Nominations
23 Jul 2010 MEETING: RAK: Rakon Notice of Annual Shareholders Meeting
22 Jul 2010 ASSET: RAK: Rakon expands European business
29 Jun 2010 SSH: RAK: SSH Notice (AMP Capital Investors (New Zealand) Limited)
25 Jun 2010 ANNREP: RAK: Rakon Limited: Annual Report March 2010
25 Jun 2010 GENERAL: RAK: Rakon Long Term Share Incentive Plans
18 Jun 2010 GENERAL: RAK: China Vice President visits Rakon
16 Jun 2010 RELINT: RAK: Director's Relevant Interest (Bruce Irvine)
8 Jun 2010 RELINT: RAK: Director's Relevant Interest (Brent Robinson)
8 Jun 2010 RELINT: RAK: Director's Relevant Interest (Darren Robinson)
8 Jun 2010 RELINT: RAK: Ongoing Disclosure Notice (Graham Leaming)
21 May 2010 ADDRESS: RAK: Rakon Limited 2010 Full Year Result Presentation
21 May 2010 FLLYR: RAK: Rakon Limited 2010 Full Year Result Media Release
21 May 2010 FLLYR: RAK: Rakon Limited 31 March 2010 Full Year Results
17 May 2010 ALLOT: RAK: Notice of Redemption of Shares
27 Apr 2010 GENERAL: RAK: Rakon FY10 Result Change of Release Date & Telcon Details
8 Apr 2010 GENERAL: RAK: Rakon 2010 Full Year Result Release Date
25 Feb 2010 SSH: RAK: SSH (Macquarie Group Limited)
18 Feb 2010 S/PRICE: RAK: Share Price Enquiry
15 Jan 2010 SSH: RAK: SSH ( AXA Group)
 
Rakon Limited Ordinary Shares

Current quote:
RAK $1.17 +1
Quotes delayed 20 minutes
Price when article published: $1.05

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