It is incredibly sad.
Rakon has not been able to capitalize on the lead it had in the market and made one strategic error too many.
Someone should have told them NOT to open up a factory in China. BIG BIG mistake.
Printable View
Me http://emoticoner.com/files/emoticon...gif?1302011381 + all the Mental Institutions
A worrying aspect of todays announcement is that the Smart Wireless Device division, supposedly only 30% of sales, has been labelled, via the announcement, as the reason for a reduction in the upper range of the forecast EBITDA of $12m to $7m. (practically halved) This indirectly doesn't seem to say much for the prospects of profitability of the other 70% of sales.?
Most posters seem to have concluded from the last paragraph of the announcement that Asset values are to be written down (Note to FMA: Why doesn't the announcement say what the intention is in plain english then??....Hello!!! Are all investors supposed to be able to decipher that rubbish... "subject of actions"...as an aside does your average Kiwisaver investor trying to keep abreast of sharemarket movements have any comprehension of what "subject of actions" means??). The only conclusion is that currently, he or she is not expected to.
The company needs to come out tomorrow and explain exactly how it is "compliant with its bank covenants".
When was the last time a $70M odd market cap NZX company collapsed by 31.6% in a day.??
On the flipside...did it look like few got gently soaked up in the last 30 minutes of trade @ 0.26?
Thanks for your view Sparky.
Capital raising on the way - that's my interpretation of Rakon's last paragraph.
The references to 'balance sheet', 'even though strong' and ' actions' are all PR written to disguise the need for capital imo.
That is why the market reacted so savagely yesterday.
Net cash was down to $3.95m as at 30 Sep 2012 while bank debt stood at $32.9m. Rakon increased borrowings by $13.5m the year prior.
Now a full year loss is forecast so Rakon will need to either borrow more or raise capital.
Enough to make Rakon's bankers spew into their cuppa in the mornings!
"The Balance Sheet of Rakon has been the subject of extensive review over past
months and even though strong (Net Assets of $189m & Net Tangible Assets of
$0.80 per share, as at 30-Sep-12), will be the subject of actions to ensure
it is properly aligned to a future for Rakon that allows the Company to
profit from its strengths."
Thanks guys. Having been out of the NZ market for quite a while, I dallied with the idea of investing against the flow. But reading your comments and reviewing past performance no way. Woof woof me thinks.