Global expansion, new products and recovering government spending are to thank for communications specialist Sepura' s (SEPU) recent gains. Strong sales of its digital mobile radios, together with rising interest in its newer offerings, helped adjusted operating profits rise nearly a fifth to €12.5m (£10m).
Sepura has revamped its strategy in recent years, buying infrastructure supplier 3T Communications in 2012 and app-developer Portalify last July. Its goal is to be a 'one-stop shop' for both companies and governments, which increasingly want radios with both voice and data functions, says chief executive Gordon Watling. Moreover, building its own radio networks gives Sepura greater autonomy and "wallet-share", he says, and should drive recurring revenues as clients hang on to infrastructure longer than handsets.
The approach seems to be working. Sepura's radio deliveries rose 22 per cent to 188,000 last financial year, and it more than doubled its contracted backlog to 72,500 radios. It also signed its first infrastructure contract in North America with the Toronto Transit Commission. And customers in 22 countries invested more than €1m, compared with 14 in the previous year. Those gains led management to guide toward double-digit sales and EPS growth over the next two years.
Broker Liberum Capital expects adjusted pre-tax profits of €14.9m this year, giving EPS of 9.7¢, rising to €18.1m and 12.1¢ in 2015-16 (from €12.3m and 8.4¢ last year).
| SEPURA (SEPU) | ||||
|---|---|---|---|---|
| ORD PRICE: | 143p | MARKET VALUE: | £197m | |
| TOUCH: | 142-143p | 12-MONTH HIGH: | 156p | LOW: 113p |
| DIVIDEND YIELD: | 1.4% | PE RATIO: | 19 | |
| NET ASSET VALUE: | 55¢* | NET CASH: | €5.3m | |
| Year to 28 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2010 | 79 | 9.4 | 6.3 | 1.27 |
| 2011 | 71 | 2.5 | 3.0 | 1.36 |
| (€m) | (€m) | (¢) | (p) | |
| 2012 | 83 | 4.6 | 4.5 | 1.46 |
| 2013 | 105 | 7.9 | 6.6 | 1.68 |
| 2014 | 117 | 14.2 | 9.5 | 2.00 |
| % change | +11 | +80 | +44 | +19 |
Ex-div: 2 Jul Payment: 8 Aug *Includes intangible assets of €52.9m, or 38¢ a share £1=€1.24 | ||||
