Daily ShareChat: Rakon

Rakon continues to have significant growth opportunities ahead of itself in the smart phone, telecommunications infrastructure and Femtocell markets, says Jason Familton, an analyst at First NZ Capital.

"Execution, as always, remains key and, after disappointing in full-year 2009 and full-year 2010, the company needs to start to produce earnings growth again in line with its guidance," Familton says.

"However, underlying volume and revenue growth is likely to be offset somewhat by strength in the New Zealand dollar in full-year 2012 (with no New Zealand dollar/US dollar [hedging] currently in place) and therefore we remain cautious at this stage," he says.

If the currency remains at current levels, his forecast earnings before interest, tax, depreciation and amortisation (EBITDA), excluding associates, would fall to $19.4 million from $27.8 million and earnings per share would drop to four cents from 7.6 cents, he says.

Rakon reported a $5 million adjusted net profit for the six months ended September, behind Familton's $6.2 million forecast while its EBITDA of $11.2 million was behind his $12.7 million forecast.

Rakon maintained its earnings guidance for the full year between $25 million and $30 million and Familton is expecting $29.3 million, "primarily as a result of weaker New Zealand earnings offset by stronger associate earnings." Rakon has its Timemaker joint-venture in China and the Centum joint-venture in India.

Rating: Neutral.

Comments from our readers

No comments yet

Add your comment:

Your name:
Your email:	Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Anti-spam verification:

Type the text you see in the image into the field below. You are asked to do this in order to verify that this enquiry is not being performed by an automated process.

Related News:

Rakon's Robinson brothers sell shares to fellow directors Mogridge, Irvine
Sale of Rakon's Chinese factory better than liquidation
Rakon's Robinson brothers to sell recently purchases shares after breaching Takeovers Code
Rakon founders buy 367,000 shares after Chinese factory sell-down
Rakon sells 80 percent of Chinese factory to reduce debt
No savings this year for Rakon's manufacturing shift to China, grand plan coming in July
Rakon cuts annual earnings guidance again, matching market expectations
Rakon cuts full-year guidance on delayed sales, thinner margins
Sluggish first half pushes Rakon to $3.96M loss
Rakon to cut 60 NZ jobs as it shifts manufacturing to China, India