Rakon asks shareholders to hold tight
Rakon chairman Bryan Mogridge has called his company's financial results a disappointment but has encouraged shareholders to hold on a bit longer for their pay-day.
The international electronics company, which makes components used in everything from smartphones to GPS units, reported a net loss of $420,000 for the 12 months to March 31, 96 per cent lower than in the year prior.
"Frankly despite our team's best efforts the global economic slowdown is making everything a bit harder and it is taking longer to achieve our global goals than we planned," Mogridge told shareholders at Rakon's annual meeting at Ellerslie yesterday.
"Although Rakon's revenue in US dollars was a record, when translated back to New Zealand dollars it was down 6 per cent on the previous year."
The company's earnings before interest, tax, depreciation and amortisation (ebitda) figure of $13.1 million was the "disappointment" from the board's point of view, but last month it issued an ebitda guidance of between $14m and $16m for the 2013 year.
Chief executive Brent Robinson said Rakon's telecommunications customers in some sectors had contracted their investment by as much as 20 per cent, but would need to invest heavily again soon.
"But we have not lost one customer, we've actually gained customers and we've gained strategic position right across all our segments," Robinson said. "Sure we can slash and burn costs out of our business . . . but I still see the opportunity in front of us vividly."
Rakon has never paid a dividend and none would be paid to shareholders in the foreseeable future, Mogridge said. He began the meeting by addressing questions and criticisms of Rakon that have been regularly posed by analysts, shareholders and media commentators.
The board's composition - with founder Warren Robinson, chief executive Brent Robinson and marketing executive Darren Robinson - represented years of experience which was invaluable.
One shareholder, as well as Shareholders' Association spokesman John Hawkins, spoke against the board's composition saying it had too many executive directors.
Mogridge announced at the meeting that a new director, Herb Hunt, would join the board in November in addition to Peter Springford, who was yesterday officially elected by investors.
Rakon's NZX share price closed flat at 44 cents yesterday.