Yep, I think my lucky stars I decided to run with both RAK and PEB. More than makes up for PX1 ;)
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A stunner first half as expected, but no divi.
EPS 8.3c so let’s be conservative and say FY22 16c = PE 11
Worth well over $2 will it get there today ….
all the pistons firing at rakon
Looks like a dump. Someone big holder seeing off the new highs.. $2 had to wait I guess…
Some holders may have expected more growth in telecommunications ($38m to $42m) where the gross margin "only" grew from $16m to $18m. Some may have expected a bigger increase in cash. These investors are not however the one's likely to set the long-term price, they may however have a short-term impact on the price.
Long-term, which segments were going backwards - None went backwards and a few areas were flat
When people look back in a week, a month, or even a few years the key is going to be $18.9m net profit after tax for the half year. Rakon has a long history of adjustments meaning the EBITDA* to NPAT gap is wider than expected. This doesn't appear to be the case on a quick look. Also with EBITDA of $26m for the half year, the EBITDA guidance range looks very achievable.
I would not recommend a dividend at this stage especially the net cash position is only $3.6m. I expect the share price to go back up again. Look like some shareholders didnt like it because:
1. no dividend
2. net cash position going backward
3. high R&D cost for first half
4. no disclosure on its debt position.
I agreed that the PE is too low and so is the market capital base on its revenue. I have increased my holding this morning based on my own forecast of revenue.
It's the quirk of the NZ market everyone goes mental about dividends. It couldn't be more clear that any dividend if paid won't be done until after the completion of the financial year so if investors are getting upset about it that is their own issue!
Rakon has been and will always be fairly working capital intensive. So there will always be a lag from the time of earnings to actual cashflow - a lot of it is tied up in debtors and pre built inventory levels. If growth levels off or slows you will see large cash inflows. So the good news is from a theoretical cashflow/dcf position all the cashflow from 1H earnings is still to come if you bought at todays dip.
For an ex CFO was a bit surprised on your comment on "no disclosure on its debt position." That is also crystal clear. "Net cash" refers to gross cash balances less gross interest bearing debt balances. And if thats not enough - you have the interim report balance sheet. note the nalance sheet on page 4: cash of 19,932 less bank OD of 4 less current borrowings of 615 less non current borrowings of 15718 = net cash of 3,595 which reconciles to the press release and mgmt presso. For good measure for my own calcs i'd probably toss in the out of the money derivative financial instruments - reduces net cash by another ~1.2m.
But as the NWC profile unwinds you will see a massive inflow of cash. Unless Rakons revenue keeps rocketing up which will be a high class problem.