Rakon FY2019 Results Announcement

Steady growth in core business drives improving results High technology company Rakon Limited ('Rakon' or the 'Group') posted a net profit after tax of $3.4m (FY18: $10.0m), and Underlying EBITDA of $13.3m (FY18: $12.1m) for the year ended 31 March 2019. The Group's Underlying EBITDA was in line with earlier guidance provided of between $12m to $14m. The prior year's $10m net profit after tax included $8.8m of gains recognised in relation to the sale of property in Argenteuil France. It also included the dilution gain and sale of shares in Thinxtra Pty Limited. Managing Director Brent Robinson said, when the one-off gains are excluded it was pleasing to see the year on year growth in core net profit on the back of stronger 4.5/5G telecommunications infrastructure demand and continuing growth in the Defence segment. "The roll-out of 5G continues to be our biggest opportunity and challenge. Rakon is well positioned with a good share of business awarded by Tier 1 customers. The challenge for Rakon is to meet existing demand and continue to bring to market new products which meet the higher specifications demanded by 5G applications. "A key event during the year was the acquisition in May 2018 of the remaining 51% of our previous joint venture Rakon India Private Limited (previously called 'Centum Rakon India Private Limited'). With Rakon now having full decision-making control of India's low cost manufacturing operation, it was pleasing to see India's positive contribution to the Group's full year result," he said. The current year showed higher operating costs with the inclusion of Rakon India from May 2018 and one-off costs relating to integrating Rakon India into the wider Group. Net debt was $7.7m (FY18: was a net cash position of $7.4m). This movement was due to the impact of higher working capital requirements to support growing revenue, the acquisition of Rakon India, and the investment in additional manufacturing capacity during the year. The value of Rakon's investment in Thinxtra changed from $5.3m at March 2018 to $4.5m at March 2019. Thinxtra's impact on Rakon's net profit after tax for the year is -$0.3m. Further explanation is provided in notes B4 d) of the audited financial statements. The Directors confirm that this FY2019 results announcement is based on audited results. Brent Robinson Chief Executive Officer & Managing Director All amounts are in NZ$ unless otherwise indicated. Refer to Note B1 of the FY2019 audited consolidated financial statements for an explanation of how 'Non-GAAP Financial Information' is used, including a definition of 'Underlying EBITDA' and reconciliation to NPAT. -ends- Contact: Anand Rambhai (CFO) 09 571 9225 Media Liaison: Louise Howe 021 206 0985 www.rakon.com About Rakon Rakon is a global high technology company and a world leader in its field. The company designs and manufactures advanced frequency control and timing solutions. Its three core markets are Telecommunications, Global Positioning and Space and Defence. Rakon products are found at the forefront of communications where speed and reliability are paramount. The company's products create extremely accurate electric signals which are used to generate radio waves and synchronise time in the most demanding communication applications. Rakon has six manufacturing plants, including two joint venture plants, and has six research and development centres. Customer support personnel are located in fifteen offices worldwide. Rakon is proud of its New Zealand heritage; it was founded in Auckland in 1967. It is a public company listed on the New Zealand stock exchange, NZX, ticker code RAK. End CA:00334626 For:RAK Type:FLLYR Time:2019-05-16 09:38:46