Audited Final Results

Sepura PLC

("Sepura," "the Group," or "the Company")

Audited final results for the period ended 27 March 2015

Record revenues and 20% increase in adjusted operating profit1 despite FX headwinds

Revenue growth of 12%, ahead of prior guidance, adjusted diluted1 EPS growth of 15% in line with guidance

Record closing year-end order book of €41 million

Acquisition of Teltronic completed post year end

Sepura, a leading global provider of critical communications solutions, today announces its audited final results for the period ended 27 March 2015. Unless otherwise stated, all figures exclude the impact of the acquisition of Teltronic SAU that was completed after the end of the period.

Financial highlights

§ Revenues up 12% to €131.2 million (2014: €116.6 million)

§ Adjusted operating profit1 up 20% to €15.0 million (2014: €12.5 million); adjusted diluted EPS1up 15% to 9.7c (2014: 8.4c)

§ Operating cash conversion of 88% (2014: 101%) and closing net debt of €1.1 million(H1 /2015: €13.8 million; 2014: net cash of €5.3 million)

§ Full year dividend increased by 20% to 2.4p (2014: 2.0p)

§ IFRS operating profit up 18% to €17.1 million (2014: €14.4 million)

Operational highlights

§ Strong demand across core markets

§ 217,000 radios delivered worldwide, up 15% from 188,000 last year

§ Record order backlog at FY15 year end of €41 million for delivery in FY16 (2014: €13.1 million) following orders for 63,000 terminals for public safety network in Saudi Arabia

§ Installed base grown to over 1.3 million radios providing a stable stream of repeat business

§ Momentum building for DMR and Applications

§ DMR portfolio expanded and Fylde acquired to facilitate DMR adoption

§ €2.3 million Applications contract for Finnish National Police Board

Teltronic acquisition completed post year end

§ Total consideration of €127.5 million financed by new debt facility and capital raise

§ Immediately enhancing to adjusted diluted EPS and significantly enhancing in the first full financial year

§ Cost synergies of €3 million per annum by the end of the first full financial year, with €1.5 million in the current year

§ Addressable market increased by $820 million to over $3.3 billion

Commenting on the Company's results, John Hughes, Chairman, said:

"Our strategy to expand our addressable market has delivered a third consecutive year of record revenues and fourth consecutive year of double-digit growth in adjusted operating profits. We closed the year with a record order book that positions us for further organic growth in FY16, while the recent transformational acquisition of Teltronic provides additional scale and enhanced visibility together with a further broadening of our product portfolio and geographical reach. These factors mean we are well positioned to meet our targets for the coming year, and this confidence is reflected in an increase in the full year dividend from 2.0p to 2.4p per share."

(1) The calculations of adjusted operating profit and EBITDA, and adjusted diluted EPS, are set out in Notes 4 and 6 to the following condensed consolidated financial statements respectively.

(2) All figures exclude the impact of the acquisition of Teltronic SAU that was completed after the end of the period.

- Ends -

Sepura will hold an analyst presentation at 9.00 am today in the offices of Liberum, Level 12 Ropemaker Place, 25 Ropemaker Street, London, EC2Y 9LY. The presentation slides will be available on the investor relations pages of the Company's website following the event at: http://investors.sepura.com.

Cautionary statement

This announcement contains certain forward-looking statements with respect to the operations, performance and financial condition of Sepura. By their nature, future events and circumstances can cause results and developments to differ materially from those anticipated. Nothing in this announcement should be construed as a profit forecast. No undertaking is given to update the forward-looking statements whether as a result of new information, future events or otherwise.

Further information

Notes to editors

Sepura is a global leader in the design, manufacture and supply of digital radios, infrastructure and applications for Professional Mobile Radio ("PMR") users, providing specialist solutions for the public safety, transportation, oil and gas, mining, utilities, industrial and other commercial sectors.

Founded in the UK in 2002, Sepura has expanded rapidly across the world and is now a market leader in over 30 countries, with a network of regional partners that sell, and provide local support for, its market-leading products. Sepura's proven track record of focussing on exciting high growth opportunities, product innovation and delivering quality and customer service was recognised in April 2015 with the award of the prestigious Queen's Award for Enterprise: International Trade.

Headquartered in Cambridge, England and with over 700 employees, Sepura was admitted to the Official List of the London Stock Exchange on 3 August 2007.

www.sepura.com

Chairman's statement

I am pleased to report another year of record revenues and a 20% increase in adjusted operating profit to €15.0 million, despite significant foreign exchange headwinds. At the same time we have continued to invest in expanding our addressable market, both organically and through acquisition, to ensure that we are positioned to benefit from the accelerating analogue to digital migration within the Professional Mobile Radio ("PMR") market.

This acceleration reflects both government mandated migration to digital technologies, driven by a need for interoperability and increased spectrum efficiency, together with commercial users' need for operational efficiencies that cannot be realised from obsolete analogue networks. We have responded to these trends by broadening our product portfolio and expanding our geographical reach, thereby significantly increasing our addressable market. Sepura now offers more solutions for a wider range of PMR users, as demonstrated by the increasing contribution from our recent investments in DMR and software applications.

The acquisition of Teltronic represents a material step in the transformation of Sepura into a geographically and technologically diverse critical communications solution supplier; it builds further on our successful earlier entry into the infrastructure market through the acquisition of 3T in FY13. Teltronic will enable us to accelerate the delivery of our strategic goals by providing additional scale, improved revenue visibility and increased exposure to commercial PMR users. The acquisition strengthens the Group's position in a range of markets, with Teltronic's customer base primarily in Latin America and North America. Combining Teltronic, the leading TETRA infrastructure supplier in North America, with Sepura, the market-leading TETRA terminals supplier, creates a compelling solution in the world's largest PMR market. We are confident that we can build on the early success of both businesses and make North America a significant market for the Group.

Our record order book and the opportunities created by Teltronic give us confidence that our business is set to deliver further growth in earnings and cash generation over the coming years, reflected in a further increase in the annual dividend of 20% to 2.4p.

Our success was recognised in April 2015 with the award of the Queen's Award for Enterprise: International Trade, which is a testament to the outstanding contribution of all of our employees to the profitable growth of our business. I would like once again to thank them for their commitment, and welcome our new colleagues from Teltronic who join us at an exciting time in Sepura's development.

Subsequent to the acquisition of Teltronic and the significant expansion of the Group, I am pleased to announce that Richard Smith will be joining the Group as CFO not later than 2 January 2016. Our thanks to Steve Chamberlain for his contribution in this role, especially during the recent acquisition. Steve will be continuing with the Group after he steps down from the Board, initially focusing on supporting the integration of Teltronic.

I am confident that the Company has a strong future ahead.

Dr John Hughes CBE Hon DSc

Chairman

6 July 2015

Chief Executive's statement

We have delivered a fourth consecutive year of double-digit growth in adjusted operating profit, which increased by 20% to €15 million despite €1.9 million of foreign exchange headwinds. This has been achieved by our continuing focus on combining strong operational performance in our core markets with the strategic expansion of our addressable market, which has increased to approximately $3.3 billion following investments in DMR, software applications and, most recently, the acquisition of Teltronic.

Our core markets continue to show sustained, long-term demand despite the impact of macro-economic factors on specific segments such as the extractive industries. Terminal shipments increased by 15% to 217,000 radios, compared to 188,000 last year, and included 65,000 radios delivered in Germany and 31,000 radios delivered to a new national public safety network in Saudi Arabia. Our record order book at the year-end of €41 million for delivery in FY16 included orders for a further 63,000 radios for delivery to the same network.

We believe this confirms TETRA as the digital PMR standard of choice for public safety users around the world, despite some uncertainty in the UK over the future role of TETRA for such users. This speculation did not have a material impact on our business in the UK, where we shipped 21,000 radios compared to 24,000 last year. We expect the UK market to continue to deliver strong repeat TETRA revenues during the medium term, together with an increasingly significant contribution from DMR as commercial users in the UK migrate to digital solutions.

PMR users increasingly demand more than voice communications from their investment in digital networks. Sepura's investment in software applications enables us to support users as they adopt complementary technologies that supplement TETRA's core voice and data capabilities. Our success in securing a significant role as part of a consortium delivering a multi-year, multi-agency and multi-standard Command & Control platform for the Finnish National Police Board confirms TETRA has a long-term role as an integral part of national PMR networks across Europe, and that Sepura is well positioned to address the increasingly complex needs of our customers.

The acquisition of Teltronic with its established infrastructure portfolio will enable us to accelerate our market penetration of new PMR networks around the world. Teltronic brings strong brands in Latin and North America, which together represented 83% of its revenues in the year ended 31 December 2014 compared to the current 5% for Sepura. In addition to this increased geographical diversity, Sepura will also have a more diverse customer base as 39% of Teltronic's revenues are derived from commercial users, compared to 25% for Sepura in FY15. Teltronic also provides increased scale and longer-term revenue visibility through its contracted order backlog, together with an opportunity to promote Sepura's existing products across Teltronic's installed base of networks.

The acquisition adds significant scale to the financial profile of the Group. Teltronic generated revenue of €62.9 million and adjusted operating profit of €8.4 million for the year ended 31 December 2014. At the time of the acquisition, we announced that the transaction is expected to deliver €3 million of cost synergies per annum, to be achieved in full by the end of full year 2017 and with €1.5 million achieved in the current financial year. We also expect the acquisition to be immediately enhancing to adjusted diluted EPS and significantly enhancing in the first full financial year.

The robustness of our established markets and the exciting growth prospects provided by DMR, applications and the acquisition of Teltronic, which builds on our existing infrastructure capabilities, give us confidence in meeting our targets for the coming year. Successful execution against our strategic objectives will continue to create additional long-term shareholder value.

Gordon Watling,

Chief Executive

6 July 2015

 Business review 

Operational Review

Sepura has been transformed from a UK-centric TETRA terminals business into a global, geographically diverse critical communications solutions provider, with an estimated addressable market of $3.3 billion. The Group's record revenues of €131.2 million, up 12% from €116.6 million last year, reflect an increasingly diverse global customer base that is expected to deliver long-term growth from the analogue to digital migration.

Sustained demand from our core TETRA devices markets

The Group delivered a record 217,000 devices last year, up from 188,000 in the previous year. This included 65,000 radios into Germany, the world's largest TETRA market with approximately 600,000 registered users and one in which Sepura is market leader. The current backlog of contracted orders for future delivery to new users in Germany is approximately 53,000 radios. In line with experience in mature markets, the Group has seen increasing demand from German customers for replacement batteries and ancillaries, and for specialist accessories such as covert solutions as network coverage extends across the country.

With an installed base now over 1.3 million radios across 114 countries, the Group has a growing stream of recurring revenues as users refresh existing fleets and acquire accessories and applications to maximise the return on their investments in our technology. This is also the case in Germany where, in addition to demand from new users, early adopters have confirmed their intention to begin refreshing their existing radio fleets as they near the end of their operational lives.

Growing demand from emerging markets

North America is the world's largest PMR market and is forecast to generate 25% of the growth in digital PMR users as 1.5 million commercial PMR users in North America convert to digital. The acquisition of Teltronic, and its North America Powertrunk brand, since the end of the period brings together the leading suppliers of TETRA terminals and infrastructure in North America. Sepura and Teltronic have supplied 11 of the first 14 TETRA networks in North America, and Sepura terminals are now in use on all of these networks.

Growing demand from commercial users

The total PMR market is continuing to expand, with an estimated value of $16.5 billion per annum in 2017 when 45 million PMR radios are forecast to be in use globally according to independent research from IHS. An increasing proportion of these will be digital radios. Approximately 15 million PMR users, representing one third of all PMR users, currently use digital PMR technology and a further 10 million PMR users are forecast to migrate to digital by 2018. The majority of this growth is expected to come from smaller, frequently single site, digital networks primarily for use by individual commercial organisations that prefer a single supplier that can offer a simple migration path to a solution that suits their operational needs.

Increasing contribution from DMR

DMR products address the needs of smaller commercial users. DMR is independently forecast to be the fastest growing segment within PMR over the next four years, with the installed base of DMR radios forecast to grow by 4.2 million radios by 2017. The Group's DMR portfolio has expanded since its launch last year, and has been enhanced by the acquisition of Fylde with its enabling technology that offers a lower risk and more cost-effective migration strategy for trunked analogue users. The Group has also expanded its DMR reseller channel and routes to market, and Sepura DMR radios are already operational in 37 countries. The acquisition of Teltronic will further increase routes to market for DMR products, particularly within Latin America, where Teltronic has well established distribution channels to commercial users.

The range of potential DMR customers is demonstrated by the largest deployment to date being a fleet of 2,600 radios in Brazil, while other prestigious early adopters include leading sporting venues requiring significantly smaller fleets such as Goodwood racecourse, and the Group's local football team Cambridge United. Management believe the Group will be able to establish a similar presence and reputation in the DMR market over time to that enjoyed by its TETRA products, which will enable DMR to become a significant revenue stream for the Group over the medium term.

Developing a broad portfolio of market-leading solutions

In addition to the ongoing investment in DMR and software applications, Sepura has continued to invest in product innovation. The Group's new generation of TETRA radios which was launched earlier this month at Critical Communications World, maintains its product-leadership position by offering enhanced robustness and additional features and functionality that support PMR users' increasing demand for real-time data in the field.

Financial review

Revenue

The Group delivered record revenues of €131.2 million, up 12% from last year's €116.6 million. Fylde, whose results have been consolidated for the first time following its acquisition on 20 May 2014, accounted for €1.5 million of the increase. The total number of terminals shipped increased by 15% from 188,000 to 217,000, including 31,000 to new public safety customers in Saudi Arabia. The Group also received orders for a further 63,000 radios to Saudi Arabia for delivery in FY16.

Gross margin

Gross margin strengthened as forecast in the second half of the year, with a gross margin for H2 of 47.1% compared to 45.1% in H1. The gross margin for the full year of 46.2% was affected by product and customer mix, including the first full year of the Group's DMR portfolio and entry into new strategic markets. Gross margin was also impacted by foreign exchange and on a constant currency basis the gross margin was 46.7%, compared to the 47.4% reported for the same period last year. The gross margin percentage for the first half of the current year will reflect pricing for recent high volume contracts in strategic new markets, which will deliver incremental business over the operational life of those radios.

Research and development costs

Gross expenditure on R&D was €16.8 million (2014: €16.7 million), or 13% of revenues (2014: 14%). A significant proportion of these costs relate to the fixed Sterling costs of the Group's UK-based development teams. These are hedged 12 months in advance and so reflect last year's GBP/Euro rates, and on a constant currency basis gross expenditure on R&D increased by 4% to €17.4 million.

Investment in research and development continued to focus on maintaining product leadership, with significant investment in the Group's next generation platform of both terminals and infrastructure, broadening its DMR portfolio and expanding its Applications offering.

Capitalised development expenditure represented 78% (2014: 75%) of related gross development spend. The related amortisation charge for the period decreased to €6.7 million (2014: €8.1 million) as the development expenditure on several older products is now fully amortised, while an increasing proportion of research and development expenditure is on long-term projects, such as the Group's next generation platform, on which amortisation has yet to commence.

Selling, marketing, distribution and administrative expenses

Selling, marketing and distribution costs increased by 10% to €18.2 million (2014: €16.6 million), reflecting investments made over the last year to expand the Group's routes to market, especially in North America. Current year costs include a full year contribution from Portalify, together with the incremental costs associated with Fylde and the launch of the Group's DMR portfolio.

Administrative expenses, excluding the IFRS 2 share option cost, non-recurring items and the amortisation of acquired intangibles, increased by 12% compared with the same period last year to €10.7 million from €9.5 million. Foreign exchange accounted for 10% of this increase and the remainder related to the incremental costs of Portalify and Fylde following acquisition.

The total cash operating costs, being the gross R&D expenditure, sales and marketing costs and administrative expenses (excluding the IFRS 2 share option cost, associated National Insurance, the amortisation of acquired intangibles and non-recurring items), increased by 7% to €45.6 million (2014: €42.8 million), reflecting the investment in research and development and routes to market described above, and the impact of foreign exchange.

Foreign exchange

The Group continues to be impacted by the volatility of both Euro/GBP and Euro/USD exchange rates. Adjusted operating profit on a constant currency basis, excluding the forecast impact of foreign exchange hedges, was €16.9 million, €1.9 million higher than that reported, after adjusting for the following items:

§ Revenues would have been €1.3 million lower at last year's exchange rates;

§ Product costs would have been €1.3 million lower at last year's exchange rates;

§ The Group's unhedged Sterling operating costs would have been €0.6 million lower at last year's exchange rates; and

§ The Group incurred €1.3 million more of transactional net foreign exchange losses during the period compared to last year.

The Group continues to use forward contracts to sell Euros and buy Sterling to meet Sterling expenses that can be forecast with sufficient certainty as to timing and value to qualify for hedge accounting. This provides certainty as to the future Euro reporting value of these costs to the Group for the next 12 months. The average hedge rate for the period was €1.190 / £1, based on prevailing rates during the prior year, compared to €1.24 / £1 for the same period last year which were in turn based on prevailing rates 12 months previously. As a result the Group's hedged Euro operating costs decreased by 4% compared to the prior year.

The hedges outstanding at the end of the period covered £27.4 million (2014: £19.2 million) of forecast Sterling cash flows at rates ranging from €1.233 - €1.354 / £1 (2014: €1.169 - €1.219 / £1), and with a weighted average rate of €1.274 / £1 (2014: €1.190 / £1) compared to the spot rate at the end of the period of €1.367 / £1 (2014: €1.205 / £1). The translation of the Group's hedged Sterling cost base into Euros in the coming year will therefore result in higher reported Euro costs than those reported for the current period.

Operating profit

The Group presents adjusted operating profit as a key performance measure in addition to the operating profit reported under IFRS, as the exclusion of certain non-operational or non-cash items better reflects the underlying trading performance of the Group. Adjusted operating profit for the period increased by 20% to €15.0 million, (2014: €12.5 million), while the operating profit reported under IFRS was €17.1 million (2014: €14.4 million), representing growth of 18%.

Non-recurring items

The Group incurred €532,000 of costs, primarily professional fees, in connection with the acquisition of Fylde, together with €350,000 of subsequent restructuring costs, and initial costs of €864,000 in connection with the acquisition of Teltronic SAU, which completed subsequent to the end of the period. Following amendments to the terms of the Fylde earn-out, and reflecting the first year's post-acquisition performance, €2,320,000 of deferred consideration that had been recognised on acquisition will now be treated as future management remuneration and accordingly this amount has been released to the income statement.

While the Board will continue to pursue full settlement of the amounts outstanding under a Greek public safety contract, given the current economic situation in Greece, which makes the timing and value of any payments uncertain, the Group has provided €1,770,000, being the total financial exposure.

Taxation

The Group has continued to benefit from enhanced tax relief on qualifying research and development expenditure and its brought forward tax losses, with €9.5 million (net) of losses available for offset against future taxable profits (2014: €9.9 million) in the UK. These are not available to the Group's overseas subsidiaries, which paid an aggregate of €631,000 of corporate taxes during the period. The Group also has deferred tax liabilities of €8.0 million (2014: €6.8 million) in relation to the development costs capitalised under IFRS, together with €0.9 million (2014: €0.8 million) in relation to acquired intangibles, which do not represent future tax cash payments and will be released to income as the related costs are amortised.

EPS

Adjusted diluted earnings per share, based on expensing development costs as they are incurred and excluding non-recurring items, the IFRS 2 share option charge, associated National Insurance and the amortisation of acquired intangibles, was 9.7 € cents (2014: 8.4 € cents). IFRS fully diluted earnings per share was 10.8 € cents (2014: 9.4 € cents).

Cash flows and financing

The Group continues to generate strong operating cash flows, with net cash generated from operations of €24.6 million (2014: €26.4 million). Cash conversion for the year was 88% (2014: 101%) with net working capital increasing by €3.4 million (2014: decrease of €0.3m). This is broadly in line with target cash conversion despite the delay in receipt from the Greek public safety contract referred to above.

Significant non-operating cash flows during the period related to:

§ €3.4 million (2014: €5.0 million) paid for acquisitions;

§ €13.1 million (2014: €12.5 million) spent on capitalised development costs;

§ €5.2 million (2014: €4.6 million) of other capital expenditure due to investment in test equipment and tooling for the Group's new DMR portfolio and next generation TETRA terminal, and investment in a new integrated business system;

§ €3.7 million (2014: €3.0 million) paid in relation to last year's final dividend and this year's interim dividend;

§ €5.4 million (2014: €1.3 million) purchasing shares for Treasury; and

§ €0.2 million (2014: €0.2 million) received from employees exercising share options.

Closing cash balances at 27 March 2015 stood at €2.4 million (2014: €8.0 million) and net debt, including borrowings acquired with Sepura Systems and Portalify, was €1.1 million (2014: net cash of €5.3 million).

The balance sheet

The Group's intangible assets increased during the period from €52.9 million to €66.6 million primarily due to the acquisition of €8.0 million of intangibles with Fylde, and net capitalised R&D of €6.4 million.

Inventory levels, excluding the impact of the acquisition of Fylde, increased by €1.4 million (2014: decrease of €1.3 million) as the Group's product portfolio broadened while trade receivables increased by a net €8.7 million (2014: €4.8 million) compared to the prior period due to the growth in second half revenues over the same period last year and the delayed customer receipt referred to above. Trade payables increased by €9.4 million (2014: €3.9 million), in line with increased levels of activity across the Group while provisions were reduced by €2.7 million, including €2.3 million for the release of part of the contingent consideration relating to Fylde. These movements equate to the working capital outflow of €3.4 million during the period referred to above.

Share capital

The Company has continued to purchase shares for Treasury in anticipation of future share option awards vesting, with a further 2.9 million shares (2014: 0.9 million) acquired during the period for total consideration of €5.4 million (2014: €1.3 million). 2.2 million (2014: 0.5 million) Treasury shares were utilised to settle options that vested and were exercised during the period, leaving 1.2 million (2014: 0.5 million) shares in Treasury at the end of the period.

A further invitation for eligible employees to participate in the Company's SAYE scheme was issued in September, with options over 0.8 million shares subsequently granted at an exercise price of 1.19p. Options were also granted to senior executives under the Company's Long-Term Incentive Plan totalling 1.8 million shares (2014: 2.0 million). These will vest if targets relating to the period to 31 March 2017 and 31 March 2018 are achieved.

Dividends

The Board has proposed a final dividend of 1.71p per Ordinary share in respect of the year (2014: 1.41p), payable on 9 October 2015 to shareholders on the register at the close of business on 28 August 2015, giving a total dividend of 2.4p per Ordinary share (2014: 2.0p). This represents a 20% increase on last year's total dividend.

Post period events

On 27 May 2015 the Company announced that it had completed the acquisition of Teltronic for €127.5 million. The acquisition was financed through a combination of new banking facilities of €120 million from a broadened group of banks (which replaced all previous facilities) and a £60.5 million equity raise, gross of fees and expenses, which has significantly broadened the Group's institutional investor base.

Teltronic is highly complementary, both in terms of product set and geographical penetration, with an extensive infrastructure portfolio, an emerging LTE portfolio and P25 capabilities. The acquisition strengthens the Group's presence in both Latin America and North America, in addition to extending the existing strong EMEA customer base.

Teltronic generated revenues of €62.9 million and an adjusted operating profit of €8.4 million for the year ended 31 December 2014. At the time of the acquisition, the Group announced that the transaction is expected to be immediately enhancing to adjusted diluted EPS and significantly enhancing in the first full year of ownership to March 2017. There is expected to be significant overlap in R&D spend, as well as savings across the operating cost base, that are expected to generate €3 million of cost synergies per annum by the end of the first full year after completion. Approximately €1.5 million of these are expected to be achieved this year, and the cost of implementation to realise them is expected to be c. €1.9 million. The improved product offering, cross selling and geographical expansion is expected to provide other incremental benefits.

The Relationship Agreement (as defined on page 58 of the Company's Annual Report for the year ended 28 March 2014) between the Company and its Principal Shareholders that has been in effect since the Company's IPO in August 2007 has been terminated following the completion of the acquisition and associated equity raise.

Steve Chamberlain,

Chief Financial Officer

6 July 2015

Consolidated Income Statement

1 Non-recurring items relate to the acquisition of Fylde Micro Limited in the current period, as described in Note 3, and subsequent restructuring costs, together with initial costs incurred in connection with the acquisition of Teltronic SAU which completed subsequent to the end of the period as described in Note 13. They also include a provision against outstanding receivables due from a customer in Greece. Non-recurring items in the prior period related to the acquisition of Portalify OY and subsequent restructuring costs.

Consolidated Statement of Comprehensive Income

Consolidated Statement of Changes in Equity

Consolidated Balance Sheet

Consolidated Statement of Cash Flows

Notes to the accounts

1. General information

Sepura plc ("the Company") is a public limited company incorporated and domiciled in England and Wales with registered number 04353801, whose Ordinary shares of £0.0005 each are traded on the Official List of the London Stock Exchange. The Company's registered office is Radio House, St Andrew's Road, Cambridge, CB4 1GR, England.

The Board of Directors approved this preliminary announcement on 7 July 2015. Whilst the financial information included in this announcement has been prepared in accordance with International Financial Reporting Standards ("IFRS") as endorsed by the European Union, this announcement does not itself contain sufficient information to comply with all the disclosure requirements of IFRS and does not constitute statutory accounts of the Company within the meaning of section 435 of the Companies Act 2006.

The auditors have reported on the results for the periods ended 27 March 2015 and 28 March 2014. Their reports were not qualified and did not contain a statement under section 498 (2) or (3) of the Companies Act 2006.

Statutory accounts for the period ended 27 March 2015 will be delivered to the Registrar of Companies following the Company's Annual General Meeting. Details of the resolutions to be proposed at that meeting will be included in the notice of Annual General Meeting to be sent to shareholders. Further copies of the report will be available from the Company Secretary and on the Company's website at www.sepura.com.

2. Basis of preparation

This consolidated financial information has been prepared in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the European Union, the IFRS Interpretations Committee (formerly the International Financial Reporting Interpretations Committee ("IFRIC")) interpretations and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

The consolidated financial information has been prepared on a going concern basis and under the historical cost basis, except for certain financial instruments that have been measured at fair value.

The Company has prepared this consolidated financial information for the period to 27 March 2015, being the nearest Friday to the end of the period.

For the purposes of the preparation of this consolidated financial information, the Group has applied all standards and interpretations that are effective for accounting periods beginning on or after 29 March 2014, none of which had an impact on the reported results of the Group.

3. Acquisition of Fylde Micro Limited

On 20 May 2014 the Group announced the acquisition of the entire share capital of Fylde Micro Limited, ("Fylde"), which designs and manufactures trunking controllers that enable a simple, low-risk and cost-effective migration from analogue to digital networks. The acquisition of Fylde expands the Group's addressable market by broadening the Group's product portfolio. The initial cash consideration was £2.75 million, with a subsequent additional payment of £450,000 based on the net assets at the date of acquisition. Further contingent consideration of up to £3.5 million was payable in cash if Fylde achieved EBIT targets over an earn-out period, none of which was linked to future employment. Subsequent to the acquisition, the terms of the earn-out were amended to include technical milestones as well as EBIT. As a result, in accordance with IFRS 3 "Business Combinations", part of the contingent consideration now represents future management remuneration that will be charged to the income statement as it is incurred. Reflecting this, and the first year's post acquisition performance, the related liability that had been recognised on acquisition has been released through the income statement and included within non-recurring items.

The provisional book and fair values of the assets and liabilities acquired are as follows:

Intangible assets acquired relate to existing customer contracts and relationships together with intellectual property and the business' brand name. These are being amortised over the expected useful economic lives, which have been assessed as five years. The goodwill arising on the acquisition is attributable to the value of synergies arising from the acquisition, Fylde's assembled workforce and future profits arising from access to new markets. None of the goodwill on this acquisition is expected to be deductible for tax.

The Group incurred €882,000 of costs in connection with acquisition and subsequent restructuring that have been charged to the consolidated income statement as non-recurring items.

Fylde reported a profit after tax for the year ended 31 December 2013 of £1,000. Fylde contributed €1.5 million of revenues and a loss of €0.4 million, after deducting amortisation of acquired intangibles, to the Group's results for the period, while the Group's revenue and earnings would have been €131.6 million and €15.2 million respectively if Fylde had been a member of the Group for the whole period.

4. Adjusted performance measures

The Group presents adjusted figures as key performance measures in addition to those reported under IFRS. These adjusted figures, comprising EBITDA, adjusted EBITDA, adjusted operating profit and adjusted operating margin, exclude certain non-operational or non-cash items and so, in management's view, better reflect the underlying trading performance of the Group. They may not be comparable to measures with a similar description used by other entities, Earnings before interest, tax, depreciation and amortisation has been calculated as follows:

Adjusted operating profit has been calculated as follows:

Non-recurring costs relate to €532,000 of costs, primarily professional fees, in connection with the acquisition of Fylde described in Note 3, together with €350,000 of subsequent restructuring costs, and initial costs of €864,000 in connection with the acquisition of Teltronic SAU, which completed subsequent to the end of the period as described in Note 13. Following amendments to the terms of the Fylde earn-out, and reflecting the first year's post-acquisition performance, €2,320,000 of deferred consideration that had been recognised on acquisition will now be treated as future management remuneration and accordingly this amount has been released to the income statement.

While the Board will continue to pursue full settlement of the amounts outstanding under a Greek public safety contract, given the current economic situation in Greece, which makes the timing and value of any payments uncertain, the Group has provided €1,770,000, being the total financial exposure.

Adjusted operating costs have been calculated as follows:

5. Income tax expense

Factors affecting the tax expense for the period

The tax expense for the period is different from the standard rate of corporation tax in the UK, which was 21% (2014: 23%). The differences are explained below:

The Finance Act 2013, which provides for reductions in the main rate of corporation tax from 23% to 21% effective from 1 April 2014 and to 20% effective from 1 April 2015, was substantively enacted on 2 July 2013. These rate reductions have been reflected in the calculation of deferred tax at the balance sheet date.

6. Earnings per share

Basic earnings per share has been calculated by dividing earnings attributable to owners of the parent by the weighted average number of shares of the Company for each period. For diluted earnings per share, the weighted average number of shares is adjusted to allow for the conversion of all dilutive equity instruments.

The Group presents an adjusted earnings per share figure which excludes non-recurring items, the capitalisation of development costs (together with associated amortisation), the amortisation of acquired intangibles and the IFRS 2 share-option charge, all net of UK Corporation Tax at the standard rate. This adjusted earnings per share figure has been based on adjusted basic earnings for each financial period and on the same number of diluted weighted average shares in issue as the GAAP earnings per share calculation above.

7. Dividends

The Directors have proposed a final dividend in respect of the financial period ended 27 March 2015 of 1.71p per Ordinary share, totalling approximately €4.3 million based on the Ordinary shares in issue at the date of this document. The proposed dividend is subject to approval by shareholders and has not been included as a liability in these financial statements.

During the current and prior periods the Company paid the following dividends:

8. Borrowings and facilities

Borrowings outstanding at the end of the period

Bank borrowings comprise drawdowns under the Group's Revolving Credit Facility, net of fees, of €1,131,000 (that bear interest at LIBOR plus 1.35%), and loans acquired with Sepura Systems GmbH and Portalify OY. Bank borrowings at Sepura Systems GmbH comprise an export loan of €1,500,000, which bears interest at 1.85% and a term loan of which €321,000 is outstanding, is repayable in monthly instalments of €11,000 and bears interest at 4.56%. Bank borrowings at Portalify OY comprise development funding loans of €539,000, which are repayable in annual instalments through to 2017 and bear interest at the Bank of Finland base rate less 3% (subject to a minimum of 1%), and €38,000 of other loans repayable monthly or quarterly that bear interest at rates ranging from 1% to 6%.

Facilities

On 2 October 2014 the Group increased its revolving credit facility to €35 million, with an extended life of five years from that date. The total costs associated with extending the facility were €150,000, which, together with the unamortised fees for the original facility of €96,000, were being amortised over the life of the facility. The facility was secured by a fixed and floating charge over the Group's assets, and included covenants which were tested quarterly. The facility was refinanced after the end of the period as part of the acquisition of Teltronic described in Note 13.

9. Provisions

At the end of the period provisions included €7.0 million of contingent consideration relating to the acquisition of Fylde Micro Limited, as explained in Note 3 above, and Portalify OY, acquired in the prior period.

10. Share capital

Authorised share capital

Issued share capital

During the current and prior period the following changes occurred in the Company's issued, allotted and fully paid share capital of Ordinary shares of £0.0005 each:

Treasury shares

During the period the following changes occurred in the number of Ordinary shares held in Treasury:

11. Cash generated from operations

Cash conversion is calculated as cash generated from operations divided by cash generated from operations before movements in working capital.

12. Reconciliation of cash flows to movements in net funds (debt)

13. Post balance sheet event

On 1 May 2015 the Company announced the proposed acquisition of Teltronic SAU for aggregate consideration €127.5 million, to be funded through a firm placing and offer of 46,538,461 Ordinary shares in the Company at 130p per share and a new debt facility of €120 million. The acquisition was approved by shareholders on 21 May 2015 and completed on 27 May 2015.

The preliminary provisional book and fair values of the assets and liabilities acquired are as follows:

The purchase price allocation has not yet been finalised given that the acquisition was completed on 27 May 2015. This exercise is expected to be completed during the first half of the current financial year and the appropriate amount will be recorded as purchased intangibles, with the balance being attributable to goodwill.

The goodwill arising on the acquisition is attributable to the value of synergies arising from the acquisition, Teltronic's assembled workforce and future profits arising from access to new markets. None of the goodwill on this acquisition is expected to be deductible for tax. Acquisition costs are expected to be approximately €2,500,000, of which €864,000 have been charged to administrative expenses in the consolidated income statement for the year ended 27 March 2015 and the remainder will be charged to administrative expenses in the consolidated income statement for the year ending 1 April 2016.