SEPURA investment triggers record revenues

Digital radio technology business Sepura has posted record revenues from its Cambridge headquarters after heavy investment in expanding its product portfolio.

Chief executive Gordon Watling is promising more of the same as a mix of acquisition, strong cash generation and product diversity open fresh international opportunities.

The company’s UK share price shot seven per cent higher on early London trading as Watling also revealed that Sepura had been able to repay early all borrowing drawn down for the successful acquisition of 3T.

Sepura is a global leader in the design, development and supply of TETRA digital communications solutions and last month won Business Weekly’s International Trade Award for the second successive year.

In a trading update for the year to March 29, Watling revealed that revenues and profits for the year were expected to be within a range of €103 million to €105m for the period - an increase of some 25 per cent over the prior year and ahead of market expectations.

One of the most stunning aspects of the update was the operating cash conversion of over 100 per cent. Sepura expects net cash at year-end of €6.6 million (2012: €6.4m).

Significant contributors to the growth included 3T, which is expected to contribute €11m of revenues for the period since its acquisition in May 2012.

Product diversification also reaped dividends - chiefly the launch of ATEX; Sepura has delivered approximately 8,500 ATEX radios during the year.

New business in Germany played a large part in Sepura’s fresh export triumphs. The company delivered around 46,000 radios to German public safety users during the year following an acceleration of call-downs under its existing framework contracts.

Watling said that the increased revenue, combined with tight control of operating expenses, was expected to result in adjusted operating profits being ahead of market expectations.

He said that although government investment in many territories continued to be restricted by budgetary constraints, the company's actions to diversify its product portfolio had enabled it to grow revenues in the year and were expected to lead to further growth in the year ahead.
This would be partly balanced by an increased level of investment to improve the medium term growth outlook for the group, Watling added.

He said: “We have delivered record revenues as a direct result of the investment we have made to expand and enhance our product portfolio, including the launch of ATEX and the acquisition of 3T.

“We see further opportunities to invest in our product portfolio as well as expanding into new markets to further enhance the medium to long term prospects of the group. We are confident that we can achieve our targets for the coming year.”

Source Businessweekly