Thursday 19th November 2020
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Rakon Limited achieved a net profit after tax of $4.6m (HY2020: $1.3m) and Underlying EBITDA of $11.4m (HY2020: $6.9m) for the six months to 30 September 2020. Despite the initial effects of Covid-19 being severe, a strong first half-year result was achieved due to prompt mitigation actions in Q1 and increased demand in Q2.
From late March through April 2020, manufacturing at Rakon’s plants in New Zealand and India was restricted or shut down. Strong actions were taken across Rakon’s global operations to protect the business including agreeing reductions in staff salaries, directors’ fees and rents, cutting discretionary expenditure and obtaining government relief where eligible.
This response, combined with a bubble of high demand in the Telecommunications segment from July onwards, produced a robust first half-year earnings result. Earnings growth is not expected to continue at the same rate for the remainder of FY2021 and Rakon’s full year guidance of $16m – $18m Underlying EBITDA as issued in August 2020 remains valid.
The Directors confirm that the HY2021 results announcement is based on unaudited results.
The Directors have declared that no dividend is to be paid for the interim period to 30 September 2020. Rakon maintains a dividend policy such that it will pay a dividend of up to 50% of the after tax profit, if considered fiscally appropriate. The payment of dividends is subject to the approval of Rakon’s bank, ASB Bank, under its facility arrangement.
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