Bloomberg News

Sepura Surges on Demand for Tetra Digital Radios: London Mover

April 17, 2012

Sepura Plc (SEPU), the U.K. company that supplies radios to the majority of British police forces, rose to the highest price in more than three years after saying full- year earnings will exceed investor expectations.

The stock gained as much as 17 percent to 65.75 pence, the highest since September 2008, and was up 12 percent at 1:56 p.m. in London. Sepura led the FTSE All-Share Index (ASX), benefiting Henderson Global Investors, which owns more than 21 percent of the shares, according to the company.

Earnings in the year ended March 30 were “comfortably ahead” of investor expectations, with margins improved by reduced product costs and operating expenses, Cambridge, England-based Sepura said today in a statement. The company, which held an initial public offering in 2007, switched manufacturing partners last year.

Sepura has “reasonably strong revenue growth” from existing businesses and has no plans for acquisitions, Chief Executive Officer Gordon Watling said in a telephone interview. The U.K. communications systems supplier, which competes with Motorola Solutions Inc. (MSI:US) and European Aeronautic, Defence & Space Co. (EAD), is “not thinking” whether it may be purchased, he said.

Sepura claims market leadership in Europe for digital devices that use Tetra, or terrestrial trunked radio. Its products are used by Danish ambulance drivers and Mumbai Metro staff, and in challenging environments from offshore wind farms to a remote liquefied natural gas facility in Australia.

Beyond Public Safety

In the last quarter, the company delivered the first 1,350 of its STP8X radio model designed for use in hazardous workplaces such as petrochemical plants. The GPS features of the device include an automatic alarm to the control room if a worker falls.

“The successful launch of the STP8X represents a major milestone as Sepura expands into adjacent markets,” Watling said today in the statement. The company said it expects revenue as high as 83 million euros ($109 million).

Sepura named its first Tetra distributor in the U.S. on April 13 after a 12-month Tetra trial in Green Bay, Wisconsin, that Kevin Graham, director of developing markets, said is an “ideal springboard” for sales in the country. The radio provider increased its share of revenue from countries outside the U.K. to 81 percent last year from 73 percent, according to data collected by Bloomberg.

Sepura is scheduled to report earnings on June 13.

To contact the reporters on this story: David Risser in London at drisser@bloomberg.net; Blanche Gatt at bgatt@bloomberg.net

To contact the editor responsible for this story: Mark Gilbert at magilbert@bloomberg.net


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