Sepura radios in returns

The group aims to replace analogue radios with its more robust, secure and feature-rich digital versions. It has augmented that business with infrastructure and applications, giving it exposure to a €2.5bn (£2bn) global market. The strategy seems to be working: radio shipments rose 13 per cent to 89,200, and the group has won infrastructure contracts in Canada, Lebanon and Europe in the past year. Sepura has now installed over 1.2m radios worldwide, which should drive demand for the batteries and other accessories that generate a third of total revenue.

In recent years Sepura has shifted its focus away from the UK, which contributes about 13 per cent of revenue, compared with over a third in 2008. Key markets now include Germany, where it landed contracts for 25,000 radios, and North America, where it has started selling terminals.

Sepura's total cash operating costs, which encompass gross research and development expenditure, sales and marketing costs and overheads, rose 9 per cent to about €22m. But management expect the result to be double-digit sales growth this year and next. Broker Liberum expects full-year pre-tax profits of €14.9m, giving EPS of 9.7¢, up from €12.3m and 8.4¢.