FB latest note. Future looks bright. A record year.
Rakon Limited (RAK) reported its most profitable year (in its fifty year history) over FY22, with underlying EBITDA of NZ$54.4m +132%, on revenue of NZ$172m +34%. With RAK flexing its local manufacturing base and avoiding supply chain issues, it was able to reap the benefits of global industry shortages. The result was above management's guidance range of NZ$49m–NZ$53m and ahead of our NZ$51m underlying EBITDA estimate. Management's comments about the strength in underlying core markets provides confidence for the future. Given current capacity constraints, RAK awaits the completion of its new Indian manufacturing facility to take advantage of strong demand. The Board refreshed RAK's ESG policies with a framework disclosed. WACC adjustments, given higher interest rates, and higher costs see our spot valuation falling 9% to NZ$2.09.
Quote from: Shareguy on Jun 28, 2022, 07:21 AMFB latest note. Future looks bright. A record year.
Rakon Limited (RAK) reported its most profitable year (in its fifty year history) over FY22, with underlying EBITDA of NZ$54.4m +132%, on revenue of NZ$172m +34%. With RAK flexing its local manufacturing base and avoiding supply chain issues, it was able to reap the benefits of global industry shortages. The result was above management's guidance range of NZ$49m–NZ$53m and ahead of our NZ$51m underlying EBITDA estimate. Management's comments about the strength in underlying core markets provides confidence for the future. Given current capacity constraints, RAK awaits the completion of its new Indian manufacturing facility to take advantage of strong demand. The Board refreshed RAK's ESG policies with a framework disclosed. WACC adjustments, given higher interest rates, and higher costs see our spot valuation falling 9% to NZ$2.09.
Agreed that RAK is in a sweet spot at the moment - supply shortages, pent up demand, expanding core markets. It is probably a good buy at current price of $1.27 - something like 30% off the 200 day moving average and 50% off recent highs.
I would still have liked to have seen RAK commence a divy this year, on the back of a pretty impressive result. It didn't pay even 2-3c which it could have easily afforded nor did it quantify when it would start paying.
I know some would maintain it is not a dividend stock - but in that case it is going to continue to stay in the doldrums for quite some time along with other pure growth stocks. Yield stocks will continue to do better as a hedge against what seems to be embedded inflation. Even if RAK arrests the decline in it's SP - and there are signs it has bottomed out - shareholders are still losing 7-8% in real terms after inflation.
A nod from the company - by way of a small divy - would have shored up the SP. More than that RAK has a history of promising, but never delivering, dividends to shareholders, even when it's results indicate that it could. Hopefully this year they will break with the past and start paying regular dividends.
Trading at low multiples. Market still sceptical with the result. And yes I have no doubt that a number of investors were pretty disappointed with no dividend after dangling the carrot. New CEO needs to get some good runs on the board. I have a free carry position that I will add too if it continues much lower.
Rak agm this Thursday. Hopefully an update on how the year is tracking.
Forecast for FY23 not quite as rosy as FY22.
https://www.nzx.com/announcements/396762
Rakon (NZX: RAK), an international leader in frequency control and timing solutions today announces it expects Underlying EBITDA1 for the year to 31 March 2023, to range between $36 million and $44 million. Even at the bottom of this range, the result would represent the second-best ever reported by the company.
The guidance is consistent with market expectations and comes ahead of the company's Annual Meeting of Shareholders in Auckland today. It compares to the record $54.4 million Underlying EBITDA achieved in the 2022 financial year, a result lifted by the short-term opportunities created by a global chip shortage that followed a fire at one of the world's largest chip manufacturers.
2nd best year ever leftie so pretty good
And an inflection point ....that's good ........ better than a crisis
As far as I am concerned the inflection point will be when the company is confident enough in its growth strategy to start paying a dividend.
I guess an approx 25% projected revenue drop was baked into expectations as SP up so far today.
Maybe it's Winner's inflection point thingy that they like. Onwards and upwards from here.
Looked like a upbeat AGM. Full year 23 guidance slightly up. Dividends gone due to huge opportunities in America with potential acquisition.
Inflection point mentioned. I guess we'll wait and see.
Quote from: Shareguy on Aug 12, 2022, 08:46 AMLooked like a upbeat AGM. Full year 23 guidance slightly up. Dividends gone due to huge opportunities in America with potential acquisition.
Inflection point mentioned. I guess we'll wait and see.
This chart from their presentation highlights the 'one-off' nature of FY22's gains and shows more realistic aspirations for FY23. I'm guessing they have left themselves some 'wriggle room' for upgrades etc.
I Like their emphasis on "repositioning from commoditised consumer markets into growing higher margin industrial markets". Current PE around 10.8 so I guess RAK is a 'hold'.
I think it's a hold. The future does look bright with what's been going on in the world. Not a growth company or is it going to be finally.
Quote from: Shareguy on Aug 12, 2022, 10:36 AMI think it's a hold. The future does look bright with what's been going on in the world. Not a growth company or is it going to be finally.
Well, technically they are in a confirmed downtrend (SP is since May 22 below MA200 and the cross of death was June 8th), and I guess looking into their history, Rakon is much more experienced in disappointing shareholders than in providing pleasant surprises for them. I understand as well that the outlook is not really flash, isn't it?
I would not call this a "hold", but each to their own ...
Quote from: BlackPeter on Aug 12, 2022, 04:27 PMWell, technically they are in a confirmed downtrend (SP is since May 22 below MA200 and the cross of death was June 8th), and I guess looking into their history, Rakon is much more experienced in disappointing shareholders than in providing pleasant surprises for them. I understand as well that the outlook is not really flash, isn't it?
I would not call this a "hold", but each to their own ...
Yes no question the history with this company has not been good. The new CEO seems impressive and he's just done the rounds of the brokers who also seem impressed with him.
I Think given the chip shortage and Americas decision to produce more chips at home it makes sense for Rakon to set something up in America or do a joint-venture. If they don't stuff it up it could be a good opportunity for the Robinsons to exit. In the meantime the fundamentals are good as far as I'm concerned.
Quote from: Shareguy on Aug 16, 2022, 01:22 PMYes no question the history with this company has not been good. The new CEO seems impressive and he's just done the rounds of the brokers who also seem impressed with him.
I Think given the chip shortage and Americas decision to produce more chips at home it makes sense for Rakon to set something up in America or do a joint-venture. If they don't stuff it up it could be a good opportunity for the Robinsons to exit. In the meantime the fundamentals are good as far as I'm concerned.
To be honest - while brokers seem to have opinions for various reasons, I never met yet any broker (or any other person) who was able to correctly forecast where a particular stock is going (i.e. forecasting with an accuracy higher than just the random hitrate). Sometimes they get it right and sometimes they get it wrong. Just refer to Ben Graham ...
And lets face it ...such a broker would in this case not just need to know how the chip market develops over the years to come, but as well whether the oscillators Rakon produces will be better or worse than the oscillators the competition produces. They would need to know, how the political games between the West and China will play out, whether big Telecom companies really want to buy crucial components from small and isolated manufacturers somewhere in the middle of the South Pacific. Is there a second source for Rakon oscillators? They would need to know as well, whether Rakon is not just able to develop desirable oscillators for the big players, but as well able to produce them in large enough numbers.
I guess the question whether they replaced one of their duds with a better CEO (however you measure that) is potentially one of the less significant indicators for Rakons future success.
Big risks ... and lets face it - selling hardware (and that's what oscillators are) is these days not really the big money spinner for the industry.
SP was in the mid $1.50's when RAK released their record end of year report. SP now firmly in the mid $1.20's despite strong FY23 earnings guidance. Clearly the market doesn't buy into the RAK story. Neither does the CEO (measly 50k in shares) and the CFO (20k). Hardly a ringing endorsement of their growth strategy is it?
It still isn't clear on what terms RAK will pay a divvy, but until they do I fear the market is going to continue to be wary of a management that continues to be tone deaf to shareholders. What is the point of a growth stagey if shareholders don't see any return on their investment and the SP declines 20%? If this is a great time for RAK's business I'd hate to see what happens when it hits hard times.
Quote from: LoungeLizard on Sep 09, 2022, 01:49 PMI'd hate to see what happens when it hits hard times.
You'd only need to be looking at the share price from 2009 - 2021.
Mmmmm perhaps it was the news of a Director buying 30K shares at $1.20 that pushed RAK to the top gainers leaderboard today with a 6% gain?
http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/RAK/399954/380457.pdf
1H FY23 Results out..... on my initial read they got a yeah..nah, but after a more careful read I am happy, good progress being made and strong balance sheet.
https://www.nzx.com/announcements/402927
Highlights:
Revenue $87.2m (1H22: $85.4m)
Underlying EBITDA up 6% to $28.1m (1H22: $26.4m)
Net profit after tax $16.0m (1H22: $18.9m)
Positive earnings impact from foreign exchange gains
Sustained core market growth, particularly 5G and positioning
India expansion on track for completion early 2023
NP down. Negligible growth. No dividend "policy" re-iterated. Pretty underwhelming I have to say.
Have been going over the result. My thoughts as follows
Net profit down 15 percent to $16m due to higher tax expense after accumulated NZ tax losses were fully used in FY22 . Paid $6.3m in tax this half, only $524k paid 1H22.
Both revenue and ebitda showing growth.
India factory going to plan that is going to add capacity and lower cost with NZ and France current production transferred.
New semi conductor chips to be released.
I think the future looks very bright. $18m cash in bank with inventory to fall. The company has never looked so attractive for a Robinson family exit in my opinion.
Current first half $.07 EPS (from accounts) so I'm picking full year of $.13 EPS which at todays close of $1.19 is a forward PE of 9.2
Some would say "cheap as chips"
Quote from: Shareguy on Nov 24, 2022, 09:34 PMHave been going over the result. My thoughts as follows
Net profit down 15 percent to $16m due to higher tax expense after accumulated NZ tax losses were fully used in FY22 . Paid $6.3m in tax this half, only $524k paid 1H22.
Both revenue and ebitda showing growth.
India factory going to plan that is going to add capacity and lower cost with NZ and France current production transferred.
New semi conductor chips to be released.
I think the future looks very bright. $18m cash in bank with inventory to fall. The company has never looked so attractive for a Robinson family exit in my opinion.
Current first half $.07 EPS (from accounts) so I'm picking full year of $.13 EPS which at todays close of $1.19 is a forward PE of 9.2
Some would say "cheap as chips"
At many points, over the past - let's say 20 years - the metrics for Rakon have looked better than they are now. Hell, they were better a year ago when the the SP was $2.20. But even in those times Rakon never delivered by way of dividend and the growth path wasn't sustained and the Sp continually crashed.
I don't see Rakon acting any differently now than they did at any point over the last 20 years. Sporadic periods of growth that are not sustained and no return to shareholders even in the so called good times.
I regard Rakon, not as a long term growth stock, but as a traders stock - buy at low points ( if you can pick them) and sell during the hyped "growth" period. But holding them for years with no return, whilst inflation erodes your capital - no thanks.
A divi or a acquisition in America? Can understand the frustration.
As of last report Rakon had about $14m in excess working capital and inventories, which the company had signalled would be liquidated into cash, a net-cash position of $18m and its net profit from the second half of last year.
That combined, the company could have a net-cash position of close to $40m.
Can understand investors concern with the lack of dividends and in fact never paying a dividend. I'm giving them the benefit of the doubt as I'm thinking the stars are aligning for a big future payout.
The business is doing well with the new factory in India nearly complete to drive growth. New CEO who seems very switched on and very confident regarding the future. Plenty of cash not debt which is very important in these times.
Rakon has been very good for me only because I brought plenty around the $0.20 mark years ago. Still have a good holding that I free carry. I'm watching this decline with interest and will look to add to my position.
It could be a BB....
they always work...
Investor update
I hope you had an enjoyable holiday break and are having a good start to 2023.
As the year gets underway, I want to take this opportunity to thank you for your support of Rakon and provide you with a short update on key items we'll be focusing on in the months ahead.
Our focus in 2023
We are a world-leading Kiwi company with cutting-edge technology and products. Within our core markets there is substantial growth potential for Rakon, and it is my job to turn that potential into reality. The months ahead are an exciting time for us as we reach key milestones in our growth plan. We have also accelerated our acquisition strategy with the aim of delivering access to new markets and technologies. More detail on these developments below. In terms of our financial strategy, we are committed to creating long-term value for our shareholders. In line with this, we will prioritise the use of cash surpluses towards capital investment in order to achieve our strategic growth objectives.
Acquisition plans accelerating
We have previously communicated our intention to make strategic acquisitions that support our growth strategy. For example, we can see clear synergies in acquiring a US-based business that provides access to top-tier US customers through local manufacturing, and strengthens existing customer relationships. An acquisition of this nature could also put Rakon in a good position to benefit from the Biden Administration's initiatives to grow US-based semiconductor supply chains. We have retained Angus Cooper as our M&A advisor, who has over 25 years of public company experience and successfully led 30+ acquisitions, with a track record of delivering value to shareholders. Our M&A efforts focus on identifying companies that would complement our existing operations, provide access to new markets and technologies, and ultimately drive long-term value for our shareholders. We will provide a further update on our progress in this area at the appropriate time.
Game-changing new facility in India nearly complete
Construction at Rakon India's new world-class manufacturing facility in Bengaluru (Bangalore) is close to completion (see image below). We have finished the clean room facilities and have begun the process of transferring manufacturing operations from the existing site to the new facility. This new facility enhances our global position as a high-tech manufacturing leader and will provide us with a long-term competitive advantage, as well as delivering significant cost reductions for our business. Having a manufacturing presence in India continues to open doors for us, providing strong alignment with the Indian Government's 'Make in India' initiative, and our pipeline in that market is expanding rapidly. The facility is a game-changer for Rakon and sets us up for even greater success in the years to come.
EMA-IR-Jan 2023-New Year's message
Other key growth projects tracking well
We are on track to achieve other milestones identified in our three-year roadmap. These key growth projects include:
the XMEMS® nanotechnology production process – with five products currently being manufactured using this process and generating strong customer interest;
a suite of NewSpace products for Low Earth Orbit (LEO) satellites, establishing Rakon in that ecosystem and securing our involvement aboard a planned in-orbit demonstration mission in 2023; and
a new semiconductor chip in early 2023. In addition, we will shortly move our UK semiconductor chip development team to new offices in Cambridge, which will allow us to tap into the vibrant talent pool in the heart of the semiconductor design ecosystem in the UK.
EMA-IR-ID Nick Laurent
Rakon's new investor relations manager
Lastly, I am pleased to announce that Nick Laurent joined Rakon in late 2022 as our new Investor and Corporate Communications Manager. Nick joins us from a senior adviser role at the Commerce Commission and has a background in investor relations and stakeholder engagement gained across several in-house and agency communications roles. A key part of his role at Rakon is to engage with our shareholders, so please contact him with any questions or feedback using the details below:
Email: nick.laurent@rakon.com
Call/Text: +64 21 240 7541
Kind regards
Sinan Altug
Chief Executive Officer
Interesting update.
Rakon has a lot of haters (lots of fingers burned previously,) but must say I like the look of the changes underway.
Interesting times ahead? We shall see.
(TA still in a downtrend.)
So we have a investor relations person now. Is this new position because will be busy preparing cap raise documents and fielding questions for new acquisition.
Quote from: Shareguy on Jan 18, 2023, 02:39 PMSo we have a investor relations person now. Is this new position because will be busy preparing cap raise documents and fielding questions for new acquisition.
Arent they more accurately called "Spin Doctors"?
Quote from: Minimoke on Jan 18, 2023, 02:53 PMArent they more accurately called "Spin Doctors"?
Probably discover ChatGPT :)
"In terms of our financial strategy, we are committed to creating long-term value for our shareholders. In line with this, we will prioritise the use of cash surpluses towards capital investment in order to achieve our strategic growth objectives."
In other words a continuation of the "somewhere-over-the-rainbow" strategy of the last 20 years. Meanwhile in the real world the SP is down 50% over the last 12 months, the TA looks terrible, NP declined in the last report and it's pretty clear that investors will not see any return of capital this side of hell freezing over. Glad I got out when I did.
Share price 90 cents to $2.20 and back to 90 cents
That's some ride over the last 15 months
Yep, great traders stock. As a long term investment - awful.
Small upgrade should help the falling SP ( I was wondering how the chip shortage would effect RAK's revenue.)
https://www.nzx.com/announcements/407904
Rakon Limited (NZX: RAK), a high technology manufacturer of frequency control and timing solutions for the telecommunications, positioning, and space and defence sectors, has released an update on its full-year FY23 EBITDA guidance.
Guidance for FY23 Underlying EBITDA1 has been updated to be in the range of $40-44 million for the financial year to 31 March 2023 (previously $38-44 million), with foreign currency fluctuations remaining as the primary source of uncertainty.
"Continued growth in global demand for our industry-leading products has meant we are on track to deliver a solid full year result," says Chief Executive Dr Sinan Altug.
"We are encouraged by the continued growth in our core business, which has offset the tail-off in the short-term chip shortage business that gave us a significant boost in revenue in FY22, and partially in FY23."
Hey leftie ....you left out the first profit warning for F24
[..and possible headwinds from macroeconomic volatility, cost inflation and customers correcting high inventory built up through the recent period of supply chain uncertainty. Looking ahead, Rakon anticipates that these headwinds will continue into the first half of FY24, potentially impacting revenue and profit in the short
Thanks Winnie..... and you left out the 'short term' bit... not to mention all this optimistic jargon...
"We remain confident that the underlying growth drivers for our business are strong. Our technology and industry leading products position us well to increase market share in our core high growth sectors – Telecommunications, Space and Defence, and Positioning......."
........The company has also accelerated its acquisition strategy with the aim of delivering access to new markets and technologies.......Rakon's new manufacturing facility in Bengaluru, India, is on schedule to open in mid-2023.
Totally appreciate that RAK doesn't get much love from these forums..... but maybe this means that one day it will be a counter cyclical BUY or the Robinson family will sell it for zillions!
I can't understand why anyone would want to invest in RAK given its rollercoaster SP and non dividend paying policy. Where's the upside? Your capital is at risk, there's no income stream to mitigate inflation and you are putting your trust in a Board that is absolutely tone deaf to shareholders.
Even if you had shares that were bought at a low point, why would you not sell and take your profits? The opportunity cost of not doing so is huge. Baffling.
Seems BlackBull are bullish on RAK according to a Business Desk article..(and hopeful of a dividend.)
Good luck with that.
Boutique research house BlackBull Research has thrown its weight behind a call for Rakon to start paying a dividend to revive investor interest and lift what it sees as an undervalued share price.....
Equities analyst Eden Bradfield said he's watched Rakon for a long time and seen it fall in and out of favour with investors. A key way to win back shareholders is to offer a dividend, which Bradfield said is a major attraction for NZ investors.
That echoes recent agitation from long-term Rakon shareholder Mike Daniel, who urged the board and management to run a leaner balance sheet – the firm had cash and equivalents of $25.7 million of net paid earnings – and pay a dividend.
BlackBull's Bradfield is even more bullish on Rakon's ability to spit out cash, pointing to its "pretty good" underlying earnings and balance sheet.
Interesting article regarding the changing strategic nature of the microchip/ semi-conductor market....
https://www.theguardian.com/world/2023/may/22/chinas-war-chest-how-the-fight-for-semiconductors-reveals-the-outlines-of-a-future-conflict
I understand that RAK has many haters on sites such as this however it might be timely to revisit this company and I'll be watching Wednesday's results closely. RAK's new Indian manufacturing plant would seem to be 'very well positioned'. Interesting times.
Interesting..........results out, not overly great IMO (Net profit down 30% to $23.2 mill ).....BUT RAK now a div yield stock!! ( and that should give the SP a boost!)
https://www.nzx.com/announcements/411943
Highlights
• Revenue increased $8.4 million (5%) to $180.3 million reflecting core business growth offsetting chip-shortage revenue impacts
• Revenue growth was consistently strong across all core markets - Telecommunications up 17% to $100.6 million, Space and Defence up 18% to $28.9 million and Positioning up 21% to $33.8 million
• Underlying EBITDA1 of $42.2 million (FY22: $54.4 million) reflecting increased investment in growth initiatives and inflationary pressures
• Operating cash flow of $11.1 million (FY22: $30.2 million) reflects increased investments in growth initiatives, inventory built up to provide supply chain resilience and inflationary pressures
• Achieved all FY23 milestones in three-year growth plan including nearing completion of India Manufacuring facility and increased presence in Space and NewSpace ecosystem
• Commences dividend payments declaring fully imputed FY23 dividend of 1.5 cents per share and to introduce a Dividend Reinvestment Plan
Can't help thinking RAK dreamed up the inaugural Dividend to cover a balance sheet clean out. As suggested by Rawz, it's possible that cash generated from the global chip shortage has allowed RAK to pay for a new manufacturing facility in India and clean up their balance sheet. Only time can tell if this theory is right. Definitely one to watch.
New India plant opened...... a good strategic move?..... the increased margins may even help pay future dividends!
https://www.nzx.com/announcements/413283
Rakon's long-term growth strategy includes increasing production in India to service global customers and meet product demand arising from its position as a strategic supplier, under the Indian Government's 'Make in India' initiative, to key agencies and leading companies across India's telecom, aerospace and defence industries.
The long-term strategy also includes transferring some of Rakon's product lines that are currently manufactured at sites in New Zealand and France to the new facility. As this transfer occurs the company expects to see a positive effect on margins due to lower manufacturing overheads. In line with this, Rakon has enabled future expansion for its proprietary XMEMS® resonators and nanotechnology manufacturing process within the new facility. The added capacity of the facility and production diversification will lower Rakon's global production risk and provide additional supply chain certainty for customers.
In future, Rakon anticipates that the annual revenue from its India operations may rise from 25-35% of all revenues currently, to around 50%.
To date, Rakon has invested NZ$15m in the land, building and equipment for the Centre of Excellence and the company intends to invest a further NZ$55 million over the next 5 years. Rakon currently employs around 500 people in India and expects to employ a further 300 people over the next 5 years.
A slight upgrade??...... will it be enough to get the SP above $1.00??
https://www.nzx.com/announcements/414749
• Q1 FY24 performance slightly above expectations across all three core markets
• Temporary slowdown in telecoms sector represents risk to FY24 EBITDA1 guidance (up to $10 million)
• Space and defence demand outlook remains strong with healthy order book to FY25
• Initiatives underway to improve efficiency and recalibrate resources and cost structures globally
• Strategic direction on track with good progress on FY24 milestones.........
..........Despite the temporary slowing of the global 5G rollouts, the drivers behind the technology continue to be strong. In Ericsson's Q2 results, released on Friday, the company confirmed its earlier forecast for global 5G subscriptions to reach 1.5 billion connections by the end of calendar 2023 and 4.6 billion by 2028. There are also significant market opportunities for Rakon with cloud and edge computing, autonomous machines and vehicles, aerospace and the entire NewSpace ecosystem.
Rakon remains on track with its strategic direction which provides a solid foundation for future expansion in both core and new markets. It is making good progress with its FY24 milestones, including accelerating the process for the transfer of select product lines from its France and New Zealand manufacturing sites into its new facility in India. This recently opened high-tech facility is expected to support improved product margins in FY25. The company also continues to actively seek growth opportunities, including acquisitions, where it sees future value creation and alignment with its growth strategy.
A downgrade of size is how I see it.
I read it that ebitda guidance (unchanged) has $10m at risk embedded in it
Meaning they warning ebitda could be $10m less than guidance
Bad news ...or my comprehension is failing me
Quote from: winner (n) on Jul 17, 2023, 08:59 AMMeaning they warning ebitda could be $10m less than guidance
I reckon you're right.... they seem to be saying there's a risk of $10m less than guidance in their telecoms sector..... but just maybe other factors will see a "slight" improvement overall.
That word, "slight." ........Hardly exciting!
Rakon's management are perennial optimists so the fact that they are signalling that $10m of ebitda is at risk, says to me that they almost certainly won't meet guidance.
Nice to finally get a return this week after many years. Took the DRP as see it as good buying. Holding out for a big pay day.
Quote from: Shareguy on Aug 09, 2023, 09:10 AMNice to finally get a return this week after many years. Took the DRP as see it as good buying. Holding out for a big pay day.
You've got RAK and I've got PEB. Let's see who ends up drinking the wine and who ends up picking the grapes.. ;D
Nice to see RAK getting some love on the leader board today on news that it has a new chip targeting the trendy AI market.
https://www.nzx.com/announcements/420756
"The launch of Niku™ as the first product in our AI computing product portfolio is an exciting first step towards AI computing becoming a brand new core market for Rakon. We expect to introduce more of our next-generation products in the coming year which will add to this AI portfolio."
According to a report by Bloomberg Intelligence the generative AI market is poised to grow to US$1.3 trillion over the next 10 years from a market size of just $40 billion in 2022.
Research firm, Data Bridge Market Research, projects spending in the global AI infrastructure market—including data centres, networks and other hardware —to reach US$422.55 billion by 2029, growing at a compound annual rate of 44% over the next six years.
Also hardly noticed on this site was the quiet departure of the current CFO after 12yrs and the very quick appointment of a new CFO ...... https://www.rakon.com/news/rakon-pleased-to-welcome-drew-davies-as-new-cfo
Quote from: Shareguy on Aug 09, 2023, 09:10 AMNice to finally get a return this week after many years. Took the DRP as see it as good buying. Holding out for a big pay day.
Good luck, but lets face it - history is not on your side.
Quote from: BlackPeter on Nov 01, 2023, 10:22 AMGood luck, but lets face it - history is not on your side.
Agree holding on may not of been the best move. But hey its free carry apart from DRP that I took up, which has probably clouded things. Still hopeful that a big pay day is coming but yes history is not on my side.
Mike Daniel's increases holding.
https://www.nzx.com/announcements/420970
Ouch..... not a good result.
https://www.nzx.com/announcements/422203
Financial Highlights (should be lowlights...)
• Revenue of $61.3 million (HY23: $87.2 million) reflects industry-wide challenges and the completion of one-off chip shortage contracts
• Telecommunications revenue down $13.4 million to $34.2 million and Positioning revenue down $9.2 million to $7.2 million, reflecting anticipated normalisation of customer inventory levels. Space and Defence recorded its highest revenue to date of $15.3 million, up 24% from HY23
• Gross margin of 42.7% (HY23: 49.9%) reflects non-recurring costs associated with workforce restructuring and lower production due to the move to the new India facility
• Operating expenses were relatively flat at $28.8 million (HY23: $28.4 million) reflecting both increased investment for future growth and inflationary pressures, and the offsetting effect of Rakon's focus on efficiency initiatives to improve long-term competitiveness
• Underlying EBITDA1 of $5.3 million (HY23: $28.1 million) reflects the fall in revenue, non-recurring costs and sustained investment for growth
.......... plus... a downgrade!!?? (....hard to understand RAK speak)
Overall, HY24 Underlying EBITDA1 performed in line with the July market update. However, market dynamics continue to evolve and following further dialogue with customers, and a number of recent peer and customer announcements, Rakon now believes the risk to FY24 guidance is higher than the $10 million (implied FY24 Underlying EBITDA1 of $16 million to $24 million) indicated to the market in July.
Terrible result - no other way of looking at it. There's always a complete disconnect between the awful financials and Rakons self-serving narrative about future growth. No talk of a dividend so normal service has been resumed.
Yikes..... not much interest in the buy side.... Could well slip below 60c. Ouch for holders.
Don't hold but morbid fascination has me watching this one.
Worse than expected result. 30 percent fall in revenue from 1H23. Margin fall from 50 percent to 42.6 percent.
Ebitda down 81 percent.
Net cash at $13m is good.
Very disappointing. Oh what to do....
RAK in trading halt. I hope for holders it's a takeover and not another cap raise "to fund growth."
Maybe an acquisition by Rakon (with an associated cap raise.)
Quote from: Left Field on Dec 11, 2023, 02:34 PMMaybe an acquisition by Rakon (with an associated cap raise.)
Yes, could be, given this comment from their last set of results:
"Rakon continues to evaluate and consider acquisition opportunities to expand into the US market."
If I was a holder, I'd be despairing on news of an acquisition, as the SP will slip further and RAK will inevitably return to it's "no dividend" policy.
RAK has a sad track record with long suffering shareholders.
Can a leopard change its spots?
We will see tomorrow.
Yes had to be released, when large shareholders are contacted to see if they would accept.
Nice Xmas present.
https://www.nzx.com/announcements/423277
A takeover. Good price too.....$1.70. At last some good news for holders!!
Quote from: Shareguy on Nov 01, 2023, 01:51 PMAgree holding on may not of been the best move. But hey its free carry apart from DRP that I took up, which has probably clouded things. Still hopeful that a big pay day is coming but yes history is not on my side.
Well done sir ......deserve your big pay day
Quote from: winner (n) on Dec 11, 2023, 04:39 PMWell done sir ......deserve your big pay day
How do they say ... don't count your chicken's before they hatch?
Anyway - I agree, anybody staying with Rakon through more than a decade of inept management and boards extravagance should have some compensation, whether they deserve it or not.
Lets cross fingers it works out for holders.
Quote from: BlackPeter on Dec 11, 2023, 05:59 PMHow do they say ... don't count your chicken's before they hatch?
Anyway - I agree, anybody staying with Rakon through more than a decade of inept management and boards extravagance should have some compensation, whether they deserve it or not.
Lets cross fingers it works out for holders.
Agreed. I bailed some time ago but well done to those who've held on for a big pay day. I would perhaps consider selling now at less than the bid - a bird in the hand and all that - but that's for others to decide.
Having said that...
2 years ago the SP was $2.20 and even only 18 months ago it was around the bid price, so if you bought at that time, you are only re-couping your money or making a loss. RAK have never ever been the growth company that it's owners have liked to characterise it as - it has been a bubble and burst stock. Some traders and opportunists may have done well, but there has been an awful lot of people who have lost an awful lot of money with this stock over the years. RAK won't be missed if it is sold.
Based on Rakon's peak earnings year in FY22, when it delivered NZ$54.4m in underlying Ebitda and NZ$33.1m in NPAT, the offer price $1.70 represents circa 12x PE or 7x EV/Ebitda."
Got to $2.27 in 2021. Won't be selling at $1.20 odd. Will wait and see how this plays out. First offer or the last....
Quote from: Shareguy on Dec 11, 2023, 07:28 PMBased on Rakon's peak earnings year in FY22, when it delivered NZ$54.4m in underlying Ebitda and NZ$33.1m in NPAT, the offer price $1.70 represents circa 12x PE or 7x EV/Ebitda."
Got to $2.27 in 2021. Won't be selling at $1.20 odd. Will wait and see how this plays out. First offer or the last....
Obviously something for every individual holder to decide.
Personally I don't see Rakon as an established earnings machine. They might have had one ok-ish and some not absolutly devastating years, but valuing them based on their only ok-ish year? Well, I wish any holder good luck to find a buyer who is happy to pay the price based on this calculation. Anybody who wants to improve their finances probably would prefer to put their money instead into the bank rather than buying Rakon.
I can't really see anybody interested in buying this company as a going concern, but they well might hold some IP which might have value to others in the industry. Whether this is the case, and how much it is worth to the bidder I don't know. I suspect only the bidder will be able to answer this question.
Mike Daniel stirring the Board up ....written to them ...seems he'd take the offer
He said "Lorraine, in my lifetime, I have seen too many offers withdrawn due to directors' delays caused by the need to justify their existence."
Rakon board urged to gauge major shareholder appetite to sell
https://businessdesk.co.nz/article/markets/rakon-board-urged-to-gauge-major-shareholder-appetite-to-sell
Maybe paywalled
https://bnnbreaking.com/tech/skyworks-solutions-proposes-nz170-per-share-takeover-of-rakon-eyeing-expansion
Quote from: Shareguy on Mar 01, 2024, 04:00 PMhttps://bnnbreaking.com/tech/skyworks-solutions-proposes-nz170-per-share-takeover-of-rakon-eyeing-expansion
Mike Daniel needs to do more stirring
The Phantom of the Offer saved this one for me. I got out at the top of the 52-week range, with a slight loss. Who knows, maybe the offer is still on? But I have to say I'm glad to be out.
This is For Bars update this morning...
We adjust our Rakon (RAK) forecasts to account for prolonged market weakness in its key Telecommunications segment (~55% of FY24E revenue) following negative updates from key global telco players. Nokia (NOK) and Ericsson (ERIC) reported 1Q24 numbers in the last week, with both experiencing notable revenue declines. NOK reported a significant fall in sales, led by a deep contraction in its network infrastructure and mobile networks divisions. Similarly, ERIC experienced a downturn in sales, calling out a slowdown in 5G network deployment in its critical North American market as a key driver. While our FY24 estimates already align with the lower end of RAK's guidance, we reduce our FY25/FY26 estimates as we push out a recovery in Telecommunications. Our blended spot valuation falls -2cps to NZ$0.98, and we await news regarding the potential NZ$1.70 takeover offer.
What's changed?
Earnings: Our underlying EBITDA estimates fall -5% in FY25 and FY26, while NPAT falls -9% and -6% respectively.
Spot valuation: Our blended spot valuation falls -2% to NZ$0.98, with weakness in peer comparables also driving the reduction.
Nokia — 1Q24
NOK 1Q24 showcased a challenging market environment, with net sales falling -20%. Its network infrastructure segment saw revenues drop -26%, while mobile network revenue was down -39%. NOK noted that it had seen improved order intake, providing confidence in a stronger 2H24 that should allow it to achieve its full-year operating profit guidance.
Ericsson — 1Q24 sales remaining weak but the company calls out that inventory levels have stabilised
ERIC reported a -15% year-over-year decline in 1Q24 net sales, dropping from SEK$5.7bn to SEK$4.8bn. The Networks segment saw a sales decrease of -21%. Reflecting lower 5G customer infrastructure investment, sales declined by -17% year-over-year in ERIC's primary global North American market. The company noted that customer inventory levels have now stabilised, and it expected a recovery in the second half of 2024 following recent contract wins. Despite market challenges and cautious customer investment, ERIC anticipates sales stabilisation in the latter half of 2024, supported by a strong pipeline and recent contract wins in North America.
Earnings preview — RAK FY24 result due 29 May 2024, we revise our FY25 and FY26 estimates
RAK is due to report its FY24 result on 29 May 2024. Management has guided to underlying EBITDA in the range of NZ$13m to NZ$19m. Our FY24 estimates have NZ$141.8m in sales (down -21%), underlying EBITDA at the lower end of guidance at NZ$13.9m (down -67%) and reported NPAT of NZ$4.4m (down -81%). We anticipate RAK will update investors about the takeover offer, first announced on 11 December 2023. We cut our FY25 and FY26 revenue estimates by -2% and -3%, respectively, and our underlying EBITDA forecasts by -5% in both years, effectively pushing out the cyclical recovery by ~three months.
According to BusinessDesk, someone called "Daniel" has complained to the FMA, and "also repeatedly written to Rakon and its chair, Lorraine Witten, asking for it to at least tell Rakon investors whether the talks continued."
A new 3 yr contract worth a total of $17 mill in revenue..... but still no update on the takeover.
https://www.nzx.com/announcements/431144
Quote from: Left Field on May 15, 2024, 02:06 PMA new 3 yr contract worth a total of $17 mill in revenue..... but still no update on the takeover.
https://www.nzx.com/announcements/431144
Another complication for the Robinson family to mull over
Rakons revenue last year was $180m so I don't see a contract of less than $6m per year being particularly material tbh. The Robinsons have a long, long history of over-egging RAK's potential and it never seems to materialise. Just more smoke and mirrors.
In a world of chip shortages I wonder how Rakon does so badly......... and no news on takeover bid....... crikey.
https://www.nzx.com/announcements/431918
Financial Highlights
• Revenue of $128.0 million (FY23: $180.3 million) reflects the completion of one-off chip shortage contracts in the prior year as well as the slower than anticipated normalisation of inventory levels – impacting both the Telecommunications and Positioning segments.
• Rakon continues to be impacted by the cyclical slowdown of 5G deployment by mobile operators.
• Space and Defence revenue was up by more than 27% reflecting Rakon's continued success in growing this segment and diversifying its revenue.
• Gross margin of 45% (FY23: 49%) reflects one-off costs associated with workforce restructuring and inefficiencies of lower production levels.
• Reflecting the success of cost control and efficiency initiatives, operating expenses (excluding the costs related to the acquisition proposal and retention incentives) fell by $1.5 million to $57.3 million despite inflationary pressures and continued investment in the growth plan.
• Underlying EBITDA(1) of $13.5 million (FY23: $42.2million) and Net Profit after tax of $4.5million (FY23: $23.2million).
• Capital expenditure of $17.0 million was spent on strategic investments as Rakon continues to deliver its growth plan.
• Given the FY24 financial performance and unanticipated costs related to the acquisition proposal, the Board has not declared a dividend in relation to FY24. A return to dividends will be considered at the next annual results.
Focussing on efficiency and growth strategy whilst paying no dividend. Sounds like a cut and paste from the last ten years.
Revenue, EBITDA, NP and margins all significantly down - does such a poor result make them more vulnerable to a takeover or less? Can't see it happening myself.
So Rakon have spent $2.2m so far working on a proposal from a mystery bidder (Possibly Skyworks) to buy the entire firm for $1.70 per share, with that money going on legal and consultants' fees, additional director fees and employee retention costs.
Goldman Sachs the same company that has been handling the Comvita interested party has been working on the non-binding offer, which the company received in December 2023. We have all seen how that worked out.....
So what's it worth if this interested party comes to nothing ?
Forbar gets paid by Rak for research notes but says international comparisons have a PE of 17.9 (compco average)
Share price 31/5/24 $.80
FB EPS
FY24 2.0 actual, which is a trailing PE of 40
FY25 1.4 is a PE of 57
FY26 5.5 is a PE of 14.5
So the initial takeover price is $1.70. Even at$.80 I'm sitting on a nice profit but my patience is being tested as I watch the share price decline. Based on history and Forbars estimated forward earnings it's probably sitting around fair value $.70 to $1.00.
Even though I have sold a good portion of what I had, unless a take over goes ahead my decision to sit and wait will have cost be dearly. A decision must be made but sometimes not the right one, hopefully we will soon find out.
Quote from: Left Field on May 29, 2024, 08:42 AMIn a world of chip shortages I wonder how Rakon does so badly......... and no news on takeover bid....... crikey.
https://www.nzx.com/announcements/431918
To be fair, I don't think that Rakon produces any of the complex chips used in todays telecom applications. Actually - I used to work designing commercial as well as military communications systems back in Germany and later in NZ, and none of the companies I worked for had a use for Rakon oscillators. Plenty of alternatives around.
I don't think there are any important devices dependent on using Rakon oscillators (maybe with the exception of some space applications, I remember a French a company later bought by Rakon used to have an edge in that area).
Always thought Rakon lives from milking share holders? I guess it seems to have worked so far for the Robinsons, so - why change a winning strategy?
Complexities'?? More like Robinsons family refusal to let it go. Poor minor shareholders.
On 18 December 2023, Rakon (NZX:RAK) informed the market that it was undertaking a process to consider the unsolicited, non-binding, indicative proposal (the Proposal) received on 7 December 2023. That Proposal was incomplete and highly conditional, including being subject to strict confidentiality controls. Rakon advises today that, following a period of due diligence, the Proposal will not be progressed further and the process is at an end. The parties were unable to reach a suitable resolution to the potential complexities encountered during due diligence (as announced on 13 May 2024). Given the strict confidentiality restrictions which remain in place, Rakon will not be providing further comment. Rakon Chair, Lorraine Witten, commented: "The Board considered the initial Proposal worthy of being assessed and, with support from its external advisers, undertook a comprehensive process to determine if the Proposal could be developed into a transaction to be presented to shareholders for consideration, and to consider any alternative proposals. While this process is now at an end, the interest shown in our company by this credible party is testament to Rakon's leading technology, strong business operations and unrelenting commitment to customers. "The longer-term growth fundamentals for Rakon's core markets remain strong and the opportunities significant, especially within the global space ecosystem and AI hardware sectors, as well as the ongoing evolution of 5G/6G, cloud and edge computing, and autonomous machines and vehicles. Rakon's board and management remain focused on executing on the company's growth strategy and delivering against our strategic priorities of technology innovation, core markets, customer partnerships, and flexible, scalable operations."
Another sad ending for long suffering shareholders. I came to the conclusion a while back that Rakon is one of those public companies that behaves as though it is still privately owned. This latest cloak-and-daggers episode just reinforces that view.
Well after holding for many years I sold my last parcel and am out. For me it's been a very profitable ride overall but I feel for holders. A company with so much promise but for a lot of investors just one big disappointment.
Quote from: Shareguy on Jun 21, 2024, 10:55 AMWell after holding for many years I sold my last parcel and am out. For me it's been a very profitable ride overall but I feel for holders. A company with so much promise but for a lot of investors just one big disappointment.
Getting out with a profit on RAK is a good effort, regardless of what happens from here. There's plenty who are in no-mans land - wanting to exit but will materialise losses if they do so.
Agree that RAK had so much potential but just not professionally run and tone deaf to shareholder concerns.
Quote from: Shareguy on Jun 21, 2024, 10:55 AMWell after holding for many years I sold my last parcel and am out. For me it's been a very profitable ride overall but I feel for holders. A company with so much promise but for a lot of investors just one big disappointment.
Well done for riding this traders stock with success. Takes a lot of guts, skill and/or good luck to ride a horse you can't trust - and clearly, while the Robinsons always looked well after themselves, I can't remember a lot of situations where it appeared that their interests had been aligned with the interests of the retail shareholders.
The chair of Rakon's "independent' takeover investigation committee resigns.......say no more.
https://www.nzx.com/announcements/433484
( hardly an inspiring endorsement of the Rakon culture.)
The CFO of Rakon for the last 5 years now in a position with MCK.
CFO leaving.... yesterday's news.... not a good look
https://www.nzx.com/announcements/435006
Mmmmmmm Rakon launches the newest must have space race chip.
https://www.nzx.com/announcements/435480
Not price sensitive and no additional revenue projections. Par for the course.
Downgrade!? Pretty wide range in their FY25 projections........mind you they mention AI a few times!?
https://www.nzx.com/announcements/436968
Based on current revenue projections, FY25 Underlying EBITDA is expected to be in the range of $5-15 million for the financial year to 31 March 2025 (FY24: $13.5million)
As previously advised, the first half of FY25 has continued to be challenging for the Telecommunications (excluding AI computing hardware) and Positioning segments, as customers navigate the impacts of macroeconomic conditions in each market while continuing to draw down their stockpiled inventory. While improvement is expected over the medium term, with the potential for the market to level out on a year-on-year basis during the second half, Rakon's 1H25 orders to date have reduced, leading to lower revenue year-on-year.
Breaking news (https://www.nzx.com/announcements/449655) from the Rakon spin mill is that the future doesn't influence the past! :o
Quote4 April 2025 – Rakon Limited (NZX:RAK) advises that it does not anticipate a material impact from the US tariffs announced yesterday on its full year results for the 2025 financial year, which ended 31 March 2025.
The company is currently working to fully understand how the new US tariffs will be implemented and the implications for its business.
Better tell the market quick, and don't forget to flag it as price sensitive! :o
Quote from: bulltrap on Apr 04, 2025, 06:56 PMBreaking news (https://www.nzx.com/announcements/449655) from the Rakon spin mill is that the future doesn't influence the past! :o
Better tell the market quick, and don't forget to flag it as price sensitive! :o
Can somebody tell Rakon that they are wasting their time "currently working to fully understand how the new tariffs will be implemented and the implications for its business"
Because until the impending chip tariffs are published, they can't accomplish their task. So why are they saying they are currently working on it?
Same lies they continuously peddle to their long suffering shareholders. Leopards don't change their spots
Another disappointing year......as we have grown to expect.
https://www.nzx.com/announcements/452372
(Don't hold)
Things getting interesting at Rakon
https://www.nzx.com/announcements/456431
Resolution 8: That Brent Robinson be removed as a Director of Rakon Limited.
Latest out from RAK......holders will be encouraged..... RAK turning a corner??.......Greenshoots even???
https://www.nzx.com/announcements/463549
Highlights:
• Double-digit increases in revenue, gross margin percentage and Underlying EBITDA1:
o Revenue $54.2m, +30.2% YoY – broad-based growth across all major markets
o Gross Margin 48.8%, +11 percentage points from 37.8% in 1H25 – driven by scale, mix and India cost efficiencies
o Underlying EBITDA1 $3.6m, +149% YoY – strong operating leverage and disciplined cost base.
• Market momentum across the portfolio:
o Aerospace & Defence (Revenue: $20.1m, +20% YoY): Fifth consecutive period of record growth; demand accelerating with a $75m+ global contracted Aerospace and Defence (A&D) order book – the highest in Rakon's history – and a rapidly expanding multi-year pipeline
o Telecommunications (Revenue: $25.0m; +49% YoY): Rebounded strongly as orders recovered and customer inventory normalised
o AI & Data Centre (currently reported as a part of Telecommunications): Delivered 50% YoY revenue growth; meaningful FY26 revenue expected as Tier-1 programmes scale
o Positioning (Revenue: $6.3m, +14% YoY): Stable, profitable niche with growth opportunities.
• Cost discipline delivering margin expansion: Efficiency programmes and global manufacturing optimisation have reduced the cost base while enabling increased strategic investment capacity across New Zealand, India and France.
Quote from: Left Field on Nov 28, 2025, 09:46 AMLatest out from RAK......holders will be encouraged..... RAK turning a corner??.......Greenshoots even???
Crikey and now a takeover offer...... good news for holders.
https://www.nzx.com/announcements/465711
This takeover is gonna succeed
$1.36 at the close looks tempting
Hmmmmmm