Thursday 27th May 2021
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Rakon today announced strong improvements in revenue and earnings for the year to 31 March 2021, as sustained demand from the global telecommunications sector for its industry-leading frequency control and timing solutions helped to offset the significant disruptions of the Covid-19 pandemic.
Revenue for the year to 31 March 2021 rose 8% to $128.3 million from $119.0 million a year earlier. Gross margin improvements and careful cost management drove a 59% increase in underlying EBITDA to $23.5 million (2020: $14.8m), ahead of the company’s guidance of $20-22 million. Net profit after tax rose 142% to $9.6 million from $4.0 million in the same period a year ago.
Rakon Chair Bruce Irvine said the company’s FY2021 performance was a testament to the capability, resilience and commitment of Rakon’s global team, and the agility and responsiveness of the business.
“It has been a particularly challenging year. Rakon’s strong performance through these challenges reflects the sustained demand for its industry-leading products and builds on the solid operating improvements made in recent years.”
Managing Director Brent Robinson said: “This result has been achieved despite the considerable disruptions of the Covid-19 pandemic, and it demonstrates our position as the supplier of choice in high-reliability connectivity solutions. We have captured market growth opportunities in Telecommunications, Datacentres and NewSpace, as well as responding to an unexpected and substantial opportunity that arose from global chip shortages resulting from the factory fire at Asahi Kasei Microdevices (AKM) in Japan in October 2020.
Rakon maintains a dividend policy that it will pay a dividend of up to 50% of the after tax profit if considered fiscally prudent.
Mr Robinson said the company would continue to maintain a conservative balance sheet as it manages ongoing uncertainties and risks, and looks to consolidate its improved performance and reserves in FY2022.
Accordingly, Directors have determined not to declare a dividend for the period to 31 March 2021.
Looking ahead, the company expects solid revenue growth in FY2022, driven by significant orders stemming from current global TCXO shortages and continued expansion in the 5G, datacentre and NewSpace segments.
Rakon also has funding lines in place to support future growth opportunities and as a buffer for adverse events.
Mr Robinson said the uplift due to the global TCXO shortages is expected to be sustained with deliveries scheduled through FY2022 and FY2023. “Supply is anticipated to normalise beyond that period, however Rakon is confident it will retain a good share of this market as customers diversify their supplier base for continuity of supply.”
Rakon confirms its Underlying EBITDA guidance range of $27-32 million for the year to 31 March 2022.
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