KEY POINTS:
New Zealand GPS-tech company Rakon has reported a $10.9 million net profit for the year to March, up 4 per cent from last year.
Revenue from ordinary activities rose 65 per cent to $174.3m mainly due to the contribution from a European acquisition completed in March last year.
The high New Zealand dollar and higher depreciation and amortisation charges offset the growth in pre-tax earnings.
In line with company policy, no dividend was declared.
Rakon designs and manufactures high-performance crystals and oscillators used in global positioning systems products.
The company said the New Zealand business continued to generate strong revenue growth, up 26 per cent in US dollar terms on the prior year underpinned by sales volume growth of 46 per cent.
The strength of the NZ dollar reduced revenue growth when measured in kiwi dollars to 9 per cent.
Operating earnings rose 26 per cent, or $5m, to $25.4m on the prior year and in line with guidance given in February 2008. It included a $2m one-off gain on to sale of equipment by Rakon into a joint venture with Indian-owned Centum Electronics.
Higher sales volume and lower manufacturing costs due to new product designs, material costs savings and labour efficiencies were more than offset by the effects of the strong dollar and reduced sales prices.
It incurred $8m costs on research and development activities.
Rakon's joint venture with Centum Electronics was completed and the first of three tranches of equipment was shipped from France in late March 2008.
Rakon shares have plunged from $5.80 a year ago to $3.30 although they have recovered from a low of $2.05 on May 18.
Last week the company announced it had sold the assets of its British-based commodity business.
The business, which sources and supplies non-Rakon manufactured mass- market components to the European market, was valued at around $4 million.
Rakon said the sale was at book value and would have minimal impact on its earnings per share, since it accounted for about 9 per cent of Rakon's revenue and 3 per cent of earnings in this financial year.
Managing director Brent Robinson said the sale was a logical step in the company's growth plans, and the business was quite different to Rakon's design and manufacturing operations.
Last August Rakon restated its commitment to New Zealand manufacturing as it made plans for a new factory in China.
The company employs about 750 people globally with about 500 employees at its Auckland head office
- NZPA