Thursday 25th November 2021
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Rakon (NZX.RAK) today announced significant improvements in revenue and earnings for the six-month period to 30 September 2021 as it continues to benefit from strong global demand growth for its industry-leading frequency control and timing solutions.
Revenue for the half year rose 43% to $85.4m (1H21: $59.5m). Gross margin improvements and disciplined management of supply risk drove a 132% increase in Underlying EBITDA to $26.4m (1H21: $11.4m). Net profit after tax increased 308% to $18.9m (1H21: $4.6m).
Chair Bruce Irvine said Rakon’s success over the period was the result of the company’s ability to secure and deliver new business as a result of the TCXO chip shortage, while continuing to grow its core business.
“Our 50-year track record of innovation and technology leadership, combined with longstanding relationships with some of the world’s leading technology companies, has ensured that we remain at the forefront in developing the next generation technologies. We have a deep understanding of our core markets and have created flexible and scalable global operations to support our growth and capture new opportunities.”
Managing Director Brent Robinson said core business growth continued to be led by strong demand for Rakon’s telecommunications solutions, particularly in 5G networks and data centre equipment; and increasing demand for positioning solutions to support industrial positioning applications. Additionally, the company was able to adapt and scale up its operations to secure new business stemming from the worldwide shortages of TCXO chips.
“Notably, this strong performance has been achieved in the face of considerable disruption to the global supply chain and the challenges of the global pandemic. It is a testament to the team, and the resilience and flexibility that has been embedded into the business over recent years.
“It has been a challenging half year, but we are delighted with the progress we have made and excited about the opportunities we see emerging across our core market segments.”
Directors have determined not to declare an interim dividend.
Outlook for the remainder of FY2022
Mr Robinson said orders are in place to deliver further revenue growth for the remainder of FY2022, particularly in 5G telecommunications networks as well as the final tranche of orders due to the worldwide TCXO chip shortage.
“Accordingly, we expect Rakon to continue to perform well, provided we are able to continue to manage the significant challenges related to the pandemic and ongoing challenges in securing raw materials and parts to meet orders.
“We remain confident of achieving our recently upgraded earnings guidance, with expected Underlying EBITDA in the range of $44–49m for the year to 31 March 2022.”
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