KEY POINTS:
Shares in Rakon shot up 2.7 per cent to a record $5.13 today after the global positioning system (GPS) maker produced a strong result and an even stronger forecast.
Rakon today forecast revenue in 2008 would double despite the company, which makes global position systems (GPS) for everything
from cars to missiles, battling the strong kiwi dollar.
It said it expected revenue for the 2008 year to be about $200-220 million with Ebitda (earnings before interest, tax, depreciation and amortisation), to increase to between $32 and $38m.
The forecast assumes the US/NZ dollar to average around 70 cents for the full year.
Rakon said it had about 25 per cent of the year locked in slightly below the US70c mark.
Rakon said its revenue passed $100m in the March year just completed.
Sales rose 43 per cent from last year to $106.2m. Ebitda was up 71 per cent to $20.3m, and earnings before interest and tax (Ebit) was up 85 per cent to $16.5m.
No net profit figure was immediately available in Rakon's result announcement.
Earnings per share were up 80 per cent to 9.9cps.
Managing director Brent Robinson said strong growth for personal navigation devices (PNDs) in the last two quarters of the year helped push revenue over the $100m mark.
"We are continuing to work hard to maintain our strong market share in the GPS sector. This is a market that continues to grow strongly and we feel will underpin a lot of our growth in the coming year."
Manufacturing GPS equipment remained Rakon's mainstay product. However it had moved into new markets, aided by the acquisition of the frequency control products division of C-MAC MicroTechnology at the end of the financial year.
"Integration of the acquisition has gone extremely well and results are consistent with expectations.
"The sales teams have been combined and are now working on presenting a much broader product range to our customer base," Mr Robinson said.
Rakon's stock has been a stellar performer since listing a year ago tomorrow. The shares closed yesterday at $5.02, having listed at $2.40. They were issued at $1.60.
Demand for some of new products, in particular OCXOs (Oven Controlled Crystal Oscillators), was very strong.
Rakon would soon be boosting production of that product line, currently made in France, with New Zealand production.
Rakon was also investigating expanding its operations into China. Mr Robinson said any venture there would be to complement the existing manufacturing operations and provide greater control over the supply chain.
"China is an important location for Rakon both as an additional manufacturing base and also because it is a rapidly growing and very large market."
It had evaluated a number of alternatives and was in discussions with a possible partner.
"Any venture in China would be in addition to our current manufacturing operations in New Zealand, France and the UK."
Mr Robinson said the outlook for the 2008 financial year was good.
Demand for GPS grade crystals was strong as the promise of using GPS technology in cellphones was beginning to deliver.
Demand for cellphone GPS was still small compared to other GPS sectors, but recent releases of GPS-enabled phones by the likes of Research In Motion and Nokia were a good indication that the market was maturing, Mr Robinson said.
The telecommunications infrastructure sector was also strong with the rollout of 3G technology happening quickly in many regions. New technologies such as home base stations also offered great potential.
Some of these new projects were however still quite new and it was therefore difficult to predict when volumes would ramp up, Mr Robinson said.
- NZPA
