Sepura, the Cambridge UK TETRA digital radio specialist, has boosted operating profits in what the company called “a tough year for our employees.”
A significant restructuring enabled the company to sow the seeds for long-term international expansion, according to CEO Gordon Watling and chairman John Hughes.
Revenue was up slightly – one per cent – to €83 million (£66.79m) for the year to March 31 while profit before tax was ahead to €8.24m (£6.6m) from €4.8m (£3.86m).
Sepura, which won Business Weekly’s ‘International Trade’ Award in March, is hoping to leverage liberalisation across the Atlantic and penetrate the previously impenetrable US market.
Chairman John Hughes said a cost reduction programme and renegotiation of debt to give Sepura a more flexible hand had laid the foundations for a strong, long-term future.
He said: “The actions we have taken to diversify our customer base, strengthen our margins and reduce our cost base have enabled us to more than double our underlying operating profits.
“In addition, the launch of our ATEX radio and the recent acquisition of 3T represent important steps as we expand our addressable market still further and position the Group for long-term success.”
CEO Gordon Watling outlined the global growth opportunities moving forward.
He said: “We have made further investment in our routes to market serving emerging markets, with additional sales resource deployed in the Middle East, South East Asia, Australia and Latin America.
“We supplied customers in 80 countries during the year, including three new territories for us in Africa. Volumes outside the UK and Germany experienced double-digit growth for the third year in succession.
“While many of these new markets will take several years to reach maturity, their development is evidenced by customers in 21 countries purchasing over 1,000 radios, compared to 20 last year.
“This contributed to the growth in our installed base to 930,000 radios, which we expect to generate strong recurring revenues in the future as networks are expanded and accessories are consumed.”
Addressing the TETRA opportunity in North America, Watling said that the waiver granted by the Federal Communications Commission in May 2011, followed by a similar licensing of TETRA by Industrie Canada, “significantly increases our addressable market.”
Watling said: “We advised at the time that, while much remains to be done before the first TETRA deployment can begin in the North American market, we believe that TETRA will be an attractive option for similar transport and utility customers to those we currently serve in other parts of the world.
“As part of this process we have established a local presence and appointed our first distribution partners. The combined offering of Sepura and 3T will simplify and accelerate the procurement process for many potential customers once TETRA is fully licensed and the first tenders are let. We remain optimistic about the long term potential of this market.”