Emergency services, transport operators and utilities increasingly rely on Sepura (SEPU), which makes robust, reliable and secure digital radios and terminals. Soaring demand meant the group's adjusted operating profit at constant currencies more than tripled to €8.5m (£6m) in the six months to 2 October.
Organic sales leapt by a third as shipments of TETRA terminals climbed 39 per cent to 123,600, including the delivery of 55,000 terminals to public safety customers in Saudi Arabia. Although volumes fell in Germany, they rose 11 per cent in the UK as Sepura signed new clients such as Lord's cricket ground and Goodwood Estates.
But the company's biggest coup was its €128m takeover of Teltronic, a specialist in communications infrastructure. The deal diversified the group's customer base to include more commercial users and deepened its foothold in the enormous North American market. As a result, the Americas contributed 18 per cent of total turnover in the period, up from 3 per cent a year ago, with a closing order book of about €57m. And there are clear cross-selling opportunities: management recently inked a deal to provide both Sepura terminals and Teltronic infrastructure to the state of Sergipe in Brazil.
Broker Liberum expects EPS of 13¢ this financial year to March 2016, rising to 15.9¢ in FY2017 (from 9.7¢ in FY2015).
| SEPURA (SEPU) | ||||
|---|---|---|---|---|
| ORD PRICE: | 176p | MARKET VALUE: | £325m | |
| TOUCH: | 175-176p | 12-MONTH HIGH: | 183p | LOW: 127p |
| DIVIDEND YIELD: | 1.0% | PE RATIO: | 55 | |
| NET ASSET VALUE: | 82¢* | NET DEBT: | 51%† | |
| Half-year to 2 Oct | Turnover (€m) | Pre-tax profit (€m) | Earnings per share (¢) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 54.5 | 4.3 | 2.8 | 0.69 |
| 2015 | 92.9 | -6.2 | -3.6 | 0.79 |
| % change | +70 | - | - | +14 |
Ex-div: 3 Dec Payment: 8 Jan *Includes intangible assets of €184m, or 100¢ a share †Includes £12m in restricted cash £1=€1.41 | ||||
