And Senor Robinson's statements have been ??? in the past???
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Yes. And the past statements by Senor Robinson and company were all forward looking statements which proved to be ?????
Examples are:
"Our CEO, Brent Robinson recently said "I have never felt better about Rakon's strategic positioned opportunities for growth in the markets that we are in." Brent has 33 years experience in this business one of a few in the world with such expertise."
"As investors it is over to you to form your own views as to the company's long term value but today's starting point of 44 cents per share is half the company's net tangible asset value - in other words selling for half price."
Sept 2012 - Chairman Bryan 'of PGC George Kerr fame' Mogridge
I guess Mr Mogridge will now say that at 22 cents, Rakon is selling for quarter price?
Mr Mogridge is looking more and more like the dodgy bric n brac salesman on his van around the Sunday flea markets? "Roll up, roll up, folks! Buy one of these, they come with 3 free!"
FYI for holders - Rakon oscillators launched into Space on environmental mission on board the Indo-French SARAL satellite! Mougins France, February 26, 2013 – Rakon is proud to announce it is part of the exploration of science and contributes to study the environment, from space, thanks to its Ultra Stable oscillators and Oven Controlled Crystal Oscillators used in the Indo-French oceanographic study satellite that was successfully launched on the 25 February 2013 by the Indian Space Agency ISRO.
SARAL is a 410 kg satellite with two payloads developed by Thales Alenia Space and built by the French National Space Agency (CNES). Both missions have the same objective: to promote the study of the environment from space. Argos-3 collects and distributes environmental data and AltiKa is an innovative Ka-band spatial altimeter system dedicated to accurate measurement of ocean surface topography.
The SARAL satellite is a very unique as it is designed to serve the research community in oceanographic studies. It will study the sea surface heights and ocean currents as well as climatic developments. Practical applications include study of marine animal migration, continental ice studies, protection of biodiversity and coastal erosion.
SARAL stands for Satellite for Argos-3 and Altik.
Rakon has confirmed once again its competitive edge in space applications with leading-edge technological solutions that meet the demanding requirements of major international space programs and further strengthens its strong heritage in the space industry.
**** !!.. What do we do with the other XXXXXXXXXXXXX. ???.
Hey Mr Robinson..I think I found your old flip top phone?... how the hell did it get out there?....cool mouth piece can I get one of them?
http://www.satnews.com/images_upload...-Saral-sat.jpg
http://www.satnews.com/story.php?number=468416027
Hilarious :cool: I think we get the point from the last few pages sounds like you guys want to buy in haha
Really feel for the guy too, STC.
I did some averaging down of shares (ouch, ouch ouch!) as a novice investor (and is still tempted from time to time) but learnt the very hard way that averaging down is dumbing down 9 times out of 10.
What is at extreme fault here however is the directors and management of this company continuously giving the likes of Lazy Larry false hopes and expectations.
Harbour Asset Management has clearly had enough and bear in mind they are professional investors with direct access to Rakon's management and directors. That to me speaks volume.
When is their asset reassessment coming out? That will see their SP fall to the 10c range I suspect... Oh wait, our company is only worth 30 million, sorry everyone!
Management/private equity buyout? Take some of the costs out of the business and a market cap of 40mil might not seem too shabby? Having a dabble around these levels.
Me too Biker I've thought a buyout from management is possible, bought in at 21c last week.
Agree with you on frustration but impossible to agree with you on :
1. Impatience - watching a company go from one promise to another to another without any fulfillment requires great patience. But even a saint has his limit!
2. Short sightedness - supporting a company while it restructured again and again to stay competitive and relevant requires long sightedness.
Rakon has tested 1 and 2 to breaking point.
My guess is that there will be a massive capital raising, 5 for 1 at 5 cents to raise $50m to give this company one last shot.
The fact that there is no news on the balance sheet 'review' is not good. Points towards something very ominous happen to happen.
I agree there is greater risk of downside than upside at the moment , but I am in there for a possible short term bounce, but fully aware that a balance sheet restructure may be painful. If however, they plan to raise more capital in the way you prescribe, they will have to have a pretty comprehensive, positive story, backed by an entity that isn't just the Robinsons.
If you believe in MBO, isn't that exactly what will happen (indirectly)? The Robinsons will not be dumb enough to use their own money to take the gamble - it will be somebody's else's money and a 5 for 1 at 5 cents will certainly see the punters surrender their rights to the underwriters (especially if connected to Robinson).
Come to think of it, why would the Robinsons want to do a MBO? They already have control of the company in every shape and form, and have been happily taking in funds from the likes of Harbour to run Rakon (into the ground) while paying themselves huge salaries and benefits.
BMW Rakon 1, Rakon 2 etc, anyone?
Reminds me of Helicopter Line under Chris Alpe - Mercedes S Class Maui 1, Maui 2 etc.
Management changes afoot?
does anyone know about factory in china where the earthquake hit? havn,t been able to find much news or if it was affected at all?
Unlikely the factory in Chengdu was damaged as very little damage is being reported in Chengdu in Chinese media (I am in China, so this is from your Chinese correspondent!).
Let's not be too harsh on Rakon.
Let's be very harsh on the directors and management who have squandered a huge opportunity to build up an internationally competitive and thriving business by attracting the best brains and best personnel.
New Zealand needs businesses with global aspirations and capabilities.
Rakon promised so much but sadly, like many other NZ businesses, has faltered because a few individuals could not accept their used by dates.
The saddest part for Rakon is that these individuals are still in denial.
Contrast that with the likes of Ralph Waters resigning well ahead of time even though they were considered to be top of their game. Why? Because they recognise their limitations.
Rakon has signed four different contracts with the CNES agency (Centre National d’Etudes Spatiales) to provide innovative technological solutions for:
- Development of SMD crystal and programmable XO family
- Development of a die for mini Space TCXO and OCXO to reduce the cost and the size of the oscillator
- Development of a new gluing process for space oscillators in order to resist to higher and higher shocks and vibrations
- Evaluation of new quartz cuts and inverted mesa crystal resonator to address the demand of higher and higher frequencies for space applications.
not sure how much this is worth
Moosie, did you just tell turmeric to go and buy SUM POT? Well I suppose it might help him forget about the beating he took on RakCon...
Yep, if you are losing money from your current products, and you make/sell more of them, you lose more money.
Rakon needs to announce they have negotiated new prices for better margins. Announcements of new deals just make their bottom line worse otherwise. Not reporting this to the market... Isn't that a breach of NZX terms though?
We've all been there Turmeric..some times they can be deep dark evil investment places too...the good news is you learn from your mistakes the bad news is you will create new ways of making mistakes....so over time when you become an experienced investor you have to find more creative ways to keep making mistakes and due to that extra knowledge from experience it is amazing how you can keep on finding ways.. :):(:mad ;:
After 37 years of investing..and bombing out on the expected dead cat bounce with RAK I found yet another way to lose money on Tuesday... I dipped my toes back into FBU at 8.71 ..today just 3 days later it's 8.15 and $1120 poorer down 6.3%..I'm shaking head thinking .."your timing sucks Hoop, you idiot"
But its the good decisions you make that gets you there in the end ...its the SUM RYM, found STU at the bottom and rode it up ...bought into uptrends etc etc.
chin up ..Tally ho ..Spray and walk away ...up up and away.... :)
Hoop
Where to from here?
Predictions for quotes on Thursdays meeting? My prediction:
"The mobile market is growing hugely and we are part of it."
"The high NZ currency is the entire problem and that is completely out of our control."
"We have potential new customers in the pipeline and a healthy balance sheet."
"This year we made a $4 million loss, but none of this is under our control."
"We anticipate a $10 million profit for next year."
"We now have 6 months of stock on hand (up from 3 months last year), which is why our Assets part is looking huge. This is "standard industry practice" and will see us through times of high demand."
The reality:
"The mobile market is growing hugely, but we aren't part of the growth."
"The high NZ currency is manageable for almost everyone else except us who couldn't manage our way out of a paper bag."
"The same customers will place bigger orders from us but pay less for our goods. Essentially, we will be paying them to take our goods. 'PLEASE take our goods for less than we make them' is our new company sales pitch. Our balance sheet is full of dreamed up numbers, particularly for the Assets section. We completely ignored the actual value of our Assets that our auditors gave us and just put a number we liked to see in there."
"We will revise this to $6 million profit in 2 months, $4 million profit in 5 months and a $2 million loss in 8 months. In 12 months we report an $8 million loss, but because none of that was in our control and we (the Robinsons) still got $2 million in profits from the company still operating, we don't care."
"We make lots more things than we can sell. We put this in the Assets section of our balance sheet to pump it up a bit."
So basically the same stuff, different year. Too easy to predict!
Rakon shares are probably double the price they should, that's my prediction...
Bryan Mogridge will put in his usual bravado act - "we are listening and we are responding. Give us time and it's so sad most of you out there have no appreciation of how hard we work for you all. A word here on George Kerr, another misunderstood individual whose company, PGC, I chair. George is an outstanding individual whose deeds will one day be recognized for what they are - selfless acts to improve the lot of all shareholders. Of course he has to take care of No 1 first before he can do that. And I, Bryan Mogridge, will stand shoulder to shoulder with him and the Robinsons, to make sure all of you benefit from the great potential of the businesses in future."
From September 2012 : "Over the past year we have received a lot of criticism and advice about the performance of Rakon, from shareholders, commentators and the shareholders association. Some of it is helpful but a large percentage is not and often reflects a serious misunderstanding about the business that we own together and what it does, what its strategies are and the potential that it has."
And if he was 10% of the man he was when he managed CIL/Montana, he will launch a takeover bid at NTA and show the world what he is made of.
Sadly, he is but a shadow now - a man whose good name and reputation have been squandered by his association with Rakon and PGC.
Thanks for the feedback, I expect the SP is not going anywhere near where it was at the peak soon. Will continue to hold, at this price it's not really worthwhile selling and realising the loss.
Let's try and guess the announcement :
1. We have reviewed our balance sheet and disagree with commentators on Sharetrader that our asset values are inflated. In fact, we are revaluing our assets up by 15%.
2. We have signed with a partner whose name will remain secret at this stage. The partner is going to triple our revenue in the next 2 years.
3. A bigger balance sheet due to 1 needs a bigger capital base. Likewise, more capital is required to fund the working capital needs of a tripling of revenues in the next 2 years.
4. Accordingly, directors are extremely pleased to announce a bonus issue as well as a capital raising.
Maybe they will announce a licensing tie-in with the Star Trek franchise to capitalise on their recent successes in the space sector and the new Star Trek title Into Darkness seems apt. Last one out turn off the lights.
*Skips straight to NTA*
See they say they still have NTA of 0.69 per share. They did put through a impairment charge in the current year, but this was on Goodwill. There was also a slight writedown of inventory, $4m worth on $46m of inventory.
Their gross margin has decreased 19.6% to 23.5%, and with that sort of low margin when they turn over inventory every 129 days, that margin is just not good enough to sustain that sort of poor turnover.
love it .... ebitda (before a lot of other stuff) of $5m odd .... but $4m from associates and JV
Doesn't seem to leave much from what they do every day
"The Group's management awards qualifying employees bonuses in the form of share options and conditional rights to redeemable ordinary shares, from time to time, on a discretionary basis"
If I were an employee, I don't think I would want to take up any share options!! Having said that, 7000% growth in profit is quite remarkable actually - only that it's going the other way
Have just read your post Moosie. Got out this morning. made 10% in a couple of months so not unhappy, but certainly not impressed with the announcement and continued dithering over a capital restructure. Will wait for the bottom of the rights issue and have another look then. Can see a bit of shareholder pain between now and then!
whether you look at look through profit, ebita before this and that, ebit, npat or any other angle it looks like they lost money last year .... even before the impairment charge
Hows that for a conclusion
Yes I'm happy to have cut my losses and put the residual money into something with more potential than a dying company. Having said that, the very negative result will offer opportunities for speculators and traders.
As mentioned by Sparky and othes, this profit downgrade will probably make Rakon a better value takeover target for the downstream network companies, like Huawei and the like. For one; they taking over Rakon will remove the sufferage from unfavourable currency conversion, which has been one of the factors to blame for Rakon's demise.
I don't understand what you are saying. Rights issues gives you the right, rather than the obligation, to buy an issuance of shares. Rakon could very well issue rights, and the Robinson's need not take part.
However I do agree with you in thinking Rakon will not issue rights, since I don't think there is much appetite for Rakon at the moment. Share issuance really only works when a company is thriving and needs funds to grow and fund their expansion; rather than getting funds to dig them out of a hole which they may still be stuck in even with more funds.
I agree with the Robinson issue and hear there may be division within the family, hence the dithering, however I wouldn't discount entirely the possibility eventually of a deeply discounted rights issue. I guess what I'm saying is I will wait for the complete shakeout, see what results and have another look then. In the meantime I'm staying well clear.
Answered in my previous post. These Robinson's do indeed seem to be a bunch of Turkeys. When I bought in I was prepared to give them the benefit of the doubt, having heard there may have been some positive management changes.
No sign of that with this announcement!
Just reading the report now... 4 hours behind in China!
Volume of goods sold up a massive 73%. That's big numbers!
Loss of 32 million. My god....
Debt skyrocketing, virtually all monetary reserves gone.
Hedging looks like it is (finally) under control.
"deletion of the requirement for an independent valuer to conduct the valuation of investment property and property, plant and equipment;"
Whaaaaaaattt??? The part that all shareholders should be interested in and ... nope, we aren't going to do it. Can they actually do that? Clearly this is an admission that their Assets are way over valued and that they don't want someone to come in and tell them the real value as it would affect their balance sheet poorly. Which makes you ask why? Could it be that they want to keep the Asset value high due to the chance of a takeover and therefore an offering above the worth of the company? Or could it be that they want to keep it high so that there is LESS chance of a takeover due to obviously overstated Assets?
This company is imploding/imploded. Under current management, there is absolutely no way that anything can get any better. If you still hold their stock, RUN FOR THE HILLS!
C'mon fess up, who made this comment on the NBR website
Rakon, once the tech market darling. Wind the tape forward five years from now and contemplate today's tech darlings - Xero, Diligent, SLI systems, Wynard, Aria, et al
And the lesson is, easy come, easy go.
Run. Run very fast away.
They are trying to win a war with the Japanese/koreans/taiwan/china in electronics manufacturing with no point of difference.
Result is a huge cash burner that will be out of business in 2 yrs on present course.
Hard to win against these guys.
sigh. what to do. *shoulda sold ages ago*
good idea :)
Altman Z score is 1.1 meaning . Your Z score is in the low range. Your company is highly vulnerable - to bankruptcy that is (unless they do something to fix the balance sheet, like more capital)
But as we know and as many tell me Altman-z is a load of crap
So Rak will be ok
.....and that based on published accounts as well ....and I didn't even count the impairment expense in the ebit bit
They have made the mistake of borrowing from the banks - so the banks will now call the shots.
Nothing makes a bank nervous than a company which is bleeding but cannot find a plaster to stop the bleeding.
Nothing makes investors more nervous than a bank nervous about a company.
Bryan Mgridge better call in his mate, Georgie Porgie and his lackey at PGC, Greg 'not so' Bright, to rescue this damsel in distress.
Altman-z and beneish-m I often use just as a final check if I have any doubts about a companies viability. It is not a stock selection tool or screen.
Usually a quick glance at cash flow statement and the balance sheet is sufficient to tell whether any company is financially ok or not - these tools just quantitive it if one goes down that path.
With Rak the numbers are so consistently bad I'm sure beneish score would be ok ...no manipulation there. Except some of their methodologies prob need challenging, valuations etc. but st least they are consistent eh
So not so much
Rakon Limited, Full Year Annual Report
as
Rakon, Limited Full Year Annual Report
Best Wishes
Paper Tiger
On the back of a report that looks like the company is being dragged through gorse bushes and cesspools of sewage... a 20% rise in the SP! Someone is a masochist!
Noticeably absent from the report was a section explaining how they were going to drag them out of this mess. So why would people invest in them if they themselves have no idea to stop their company from going belly up? Or maybe people believe the company is about to be taken over or liquidate all its assets and therefore return 25c in the dollar (despite what they claim their assets to be)?
Maybe I am missing some news?
I had an employee once, hired by the HR team but seconded to my team, that would spend every lunch time looking a table of companies listed on the NZX. One day I questioned him on what sort of company he was looking for as he was obviously very committed, to which he replied "Something trading under 5 cents per share so that when it goes up by a cent, I stand to make a fortune". Perhaps he is the phantom trader you speak of.
Yep, I figured that was the case, I was just amazed that after such an abysmal report, their share price went UP instead of halving in value like I expected. I guess we will just have to wait for someone to eventually call them out on their Asset values for that to happen...
perhaps they are supplying russia again after there proton M rocket exploded on launch, 3 satelites up in smoke 200 million worth :)
What's happening over at Rakon? A trading halt after the price has risen 25% in 2 days... Do I smell a takeover? Or a capital raising with prices being manipulated to get closer to the raising SP? Whatever it is I am a little more suspicious now of the last 2 days rise in price on the back of a report that should have seen the floor drop out from under the SP... I would suggest someone knows something material before the rest of the market has been told...
T H , Whatsup, material ann pending !!
No...not yet !
https://www.nzx.com/companies/RAK/announcements/238269
That's what I read as well! "We are (essentially) selling 32 million of assets for 18.8 million, while transferring our tech to a Chinese firm."
So the company shrinks and gives away any tech advantage it has/had to the Chinese. Awesome. It also appears they want to exit the consumer electronics market? So after years of saying "LOOK AT THE GROWTH OF THIS MARKET THAT WE ARE INVOLVED IN!!!" they are now admitting they don't have a chance to compete and throwing in the towel?
And if we were to extrapolate...
If 32 million of assets are worth only 18.8 million, does that mean the rest of their assets are only worth 59% of the quoted value?
What have they been doing over there?
'......It’s a purpose-built plant with considerable capacity to be expanded from its current 20% utilisation........'
20% ??
A quick look into the balance sheet of the last company report and after the sale of this asset...
Stated Value ($ million) Real Value ($ million) Cash 10 10 Trade & Other 48 48 Derivatives 2 2 Inventory 46 15** Trade & Other 6 6 Property Plant & Equipment 87 32* Intangible 25 0 Investments 12 12 Deferred Tax 5 5 Plus 19 million from sale 19 Total 241 149 Liabilities (which I can't see any upside to) 84 84 Position 157 65 CPS 0.82 0.34
* This was calculated at 87-32=55*0.59 (same ratio as assets just sold at)
** Assuming a fire sale on their inventory, most likely if company goes belly up
Not including share capital, negative reserves etc in here as well... I aren't a financial analyst though, feel free to correct any mistakes I have made!
20% price jump from a pretty negative news. Or is it actually positive? I thought that factory was the best asset they have. The one that they can actually use to generate profit. A slow death with a thousand cuts.
Oh and can I mutter the words "insider trading" under my breath for the Monday to Thursday rise in SP?
I can't wait to see the next Rakon financial report.
I think we are looking at a take-over very soon, their are hints in the report "Market consolidation"!
Yeah and some poor suckers got in at 27 :) Sorry Sparky but for every buyer there is a seller ;)
But yeah, buyer beware with stocks like this.
One most nasty company listed on NZX. AVOID!
At risk of being laughing at by you guys....
Is there not the possiblity of RAK now being in play along similar lines as FPA??
A Chinese electronics company buys a small stake in a struggling NZ exporter mostly for its technology and international reach only later to mount a full take over...
Granted the Chinese company first needs to actually buy the 5% stake on market as yet only signaled by RAK in their press release and obviously the Robinson family have to want to move on but neither of these things sound that far fetched?
Not sure management will have anything to do with it, unless they were the ones trading. But that would have required notices to NZX most likely, so unless they really really want to break rules it probably wasn't them!
Most likely someone working for the company spilled the beans to a couple of people over some wines during the weekend! That guy/gal might find themselves being harassed...
But I am hoping it was one of the Robinsons, just like you moosie!
In all likelihood though the FMA will "investigate" the matter by calling up some people, someone will lie to them and said "I didn't say nuffin!" and they won't bother to investigate further saying they "thoroughly investigated all parties involved and could find no fault whatsoever".
Rakon say they did not authorise insider trading [but don't say that was no insider trading]:
4:28pm, 12 Jul 2013 | GENERAL
Rakon Limited (NZX: RAK) is aware of media speculation regarding trading in its shares prior to a trading halt on Friday 5 July 2013 at which time the company announced a strategic partnership with ZheJiang East Crystal Electronic Co. Ltd.
Rakon can confirm no company directors or staff, or their related parties, who are required to comply with the company’s Securities Trading Policy, have sought or been granted approval to buy or sell shares before the announcement.
Bryan Mogridge
Chairman
Their announcement is a bit useless.
It does not say that information was not leaked to a third party about what was about to happen. It simply says the staff didn't buy/sell shares.
Someones wife/husband/friend/brother might have, but hey, I guess that's a bit hard to deny.