Following 2008's profit warning, digital radio specialist Sepura (SEPU) has been repositioning itself. Back then 95 per cent of its radios were sold to UK police forces, but Sepura has since refocused on its key German market and on large commercial clients. It's an approach which appears to be paying-off - underlying full-year operating profit jumped 34 per cent to €10.5m (£9m), with commercial customers now generating 29 per cent of revenues.
The Tetra radio system was controversially criticised for its performance in the aftermath of July 2005's terrorist attacks in London. However, that specific problem reflected a lack of radio repeaters in the tube network, which has since been corrected, and the radios did actually work as designed. Demand bears this progress out - Sepura shipped 3 per cent more radios last year, bringing the total shipped to over 154,000, with German customers accounting for 46,000 of these. In addition, the estimated installed base of 1m radios generated recurring revenues of €6.6m. Management reckons the group's 47.9 per cent gross profit margin should improve this year, too, as the dilutive impact of its 3T acquisition falls away and pricing in Germany starts improving.
Broker Investec Securities expects pre-tax profit for 2014 of €12.5m, giving EPS of 8.4¢ (€10.2m/7.8¢ in 2013).
SEPURA (SEPU) | ||||
|---|---|---|---|---|
| ORD PRICE: | 116p | MARKET VALUE: | £159m | |
| TOUCH: | 115-119p | 12-MONTH HIGH: | 121p | LOW: 66p |
| DIVIDEND YIELD: | 1.4% | PE RATIO: | 21 | |
| NET ASSET VALUE: | 46¢* | NET CASH: | €6.6m | |
| Year to 29 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2009 | 74.1 | 10.0 | 6.40 | 0.85 |
| 2010 | 78.9 | 9.38 | 6.30 | 1.27 |
| 2011 | 70.5 | 2.50 | 3.00 | 1.36 |
| (€m) | (€m) | (¢) | (p) | |
| 2012 | 83.0 | 4.58 | 4.50 | 1.46 |
| 2013 | 105 | 7.88 | 6.60 | 1.68 |
| % change | +27 | +72 | +47 | +15 |
Ex-div: 3 Jul Payment: 9 Aug *Includes intangible assets of €41.3m, or 30¢ a share £1=€1.17 | ||||
