Rakon plans to close UK plant
Listed electronics components manufacturer Rakon is planning to close its factory in Lincoln, Britain, and shift the manufacturing of products made there to its New Zealand plant.
The proposal follows a review which determined that duplicate overhead structures and manufacturing capability existed between the Lincoln and New Zealand operations, the company said.
The proposed closure had no fixed timeline. The company planned to continue to maintain a research and development centre in Britain, based at Harlow, Rakon said.
Rakon chief financial officer Simon Bosley said it was too early to say whether any new jobs would be created in New Zealand as a result of the shift.
The Lincoln plant employs 88 people and manufactures the Pluto product range, which is also manufactured in New Zealand.
Should the proposal be confirmed in the current financial year, Rakon said its earnings guidance for the 2014 financial year would be amended.
The company would then expect to report an operating loss of from $5 million to $8m, compared with the previous guidance for an operating loss of between $3m and break-even.
Net loss after tax would be expected to be from $55m to $59m, compared with the previous guidance of $54m.
Rakon said the proposal did not affect its target to reduce bank borrowings to below $12m by March 31 and its previously announced forecast of an operating profit of from $10m to $15m in the 2015 financial year remained intact.