Final Results

SEPURA PLC (LSE: SEPU)

13 JUNE 2012

SEPURA PLC

AUDITED PRELIMINARY RESULTS FOR THE PERIOD ENDED 30 MARCH 2012

Sepura plc (the "Company"), a leading global provider of TETRA digital mobile radios, today announces its preliminary results for the period ended 30 March 2012.

A presentation of the preliminary results will be held today at 9.00 am at the offices of Investec Securities, 2 Gresham Street, London, EC2V 7QP, United Kingdom. The presentation will be available on the investor relations page of our web-site following the event at http://investors.sepura.com.

Addressable market expanded by the launch of our ATEX radio and the acquisition of 3T

Continued gross margin improvement

Cost reduction programme completed and operational efficiencies delivered

Financial Highlights:

·; Revenues of €83.0m

·; Gross margin for the year strengthened to 47.6%, with second half margin of 49.1%

·; Adjusted operating profit up 117% to €7.8m

·; IFRS operating profit up 14% to €4.9m

·; Adjusted diluted EPS up 58% to 6.0c

·; Dividend increased 7% to 1.46p per share

Operational Highlights:

·; ATEX certification achieved, 1,350 STP8X radios delivered and strong order book established

·; 3T acquisition completed post year-end to address increasing demand from commercial customers for an end-to-end critical communications solution

·; Revenue from commercial customers increased 50% and now represents 22% of revenues, up from 14% last year

·; Restructuring completed and operational efficiencies delivered

John Hughes, Chairman of Sepura, commenting on the results for the year, 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."

1 Adjusted to exclude the capitalisation of development costs (together with associated amortisation), the IFRS 2 share option charge (credit) and non-recurring costs.

2 Adjusted to exclude the capitalisation of development costs (together with associated amortisation), the IFRS 2 share option charge (credit), non-recurring costs and other gains and losses arising on marking open foreign exchange contracts to market value, all net of UK Corporation Tax at the standard rate.

The 2012 Annual Report will be distributed to Shareholders on 18 June 2012, together with the Notice of the Annual General Meeting to be held on Tuesday 17 July 2012.

FOR FURTHER INFORMATION PLEASE CONTACT:

Sepura Tel: 01223 876 000

Gordon Watling, Chief Executive Officer

Steve Chamberlain, Chief Financial Officer

Powerscourt (Media Enquiries) Tel: 020 7250 1446

Paul Durman / Sophie Moate

CAUTIONARY STATEMENT:

This Preliminary Statement 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. No undertaking is given to update the forward-looking statements whether as a result of new information, future events or otherwise. Nothing in this Preliminary Results announcement should be construed as a profit forecast.

NOTES TO EDITORS:

About Sepura

Sepura is a global leader in the design, manufacture and supply of TETRA (TErrestrial Trunked RAdio) digital communications solutions, which are used predominantly by the emergency services around the world and in the transport, utilities and commercial sectors.

Sepura offers one of the broadest ranges of TETRA products available, is often first to market with innovative products and features, and is a market leader in the supply of surveillance and other specialist TETRA radios and accessories. Founded in the UK in 2002, Sepura has expanded rapidly across the world and on 16 May 2012 announced the acquisition of TETRA infrastructure supplier 3T Communications, enabling Sepura to offer a complete TETRA solution. Sepura has a network of regional partners that sell and provide local support for our market-leading products and is the market leader in over 30 countries.

With its headquarters in Cambridge, England and employing over 300 employees, Sepura was admitted to the Official List of the London Stock Exchange on 3 August 2007. For further information please visit www.sepura.com.

Chairman's Statement

Sepura celebrates its 10th anniversary this year, and there are many reasons to be proud of how much we have achieved in both our first decade, and the last year in particular. We have transformed Sepura from its initial focus on the public safety market in the UK into a truly international enterprise serving customers from a wide range of industries. Customers in over one hundred countries have now purchased more than one million Sepura radios, and we have established market-leading positions in core and emerging markets.

This success is founded on the development of innovative products, such as our new ATEX portfolio, and the delivery of outstanding customer service, as demonstrated by our strong track record of customer retention. The result is an installed base of 930,000 radios generating long-term demand for our products, and this population will continue to grow as TETRA leads the analogue to digital migration of the Private Mobile Radio market.

The economic climate during the last year has remained challenging, but 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. At the same time we have continued to invest in research and development, and expanding our routes to market. We have also refinanced our line of credit by settling our outstanding term loan ahead of maturity, and replaced it with a flexible facility which supports our long-term strategy for growth.

Since the end of the year we have expanded our addressable market still further with the acquisition of 3T. The TETRA infrastructure market is evolving, as the roll-out of infrastructure for nation-wide networks nears completion and the focus moves to smaller, generally commercial, networks serving individual businesses. This is a market in which 3T is already established and we are convinced that bringing together Sepura's radios and 3T's systems expertise creates a compelling proposition to address the exciting opportunities in this high-growth market.

In summary, the launch of our ATEX radio, the growth of our commercial sector business, and the recent acquisition of 3T all represent important steps as we expand our addressable market still further and position our business to lead the Private Mobile Radio market for the next ten years.

The last year has been a difficult one for our employees following the restructuring, but they have demonstrated their passion and commitment through the continued delivery of innovative products and their ability to penetrate new and emerging markets. I would like to thank them all for their resilience and contribution to such a successful year, and to extend a warm welcome to our new colleagues at 3T.

John Hughes CBE, Chairman

12 June 2012

Business Review - Operational Review

Since Sepura was founded in 2002 TETRA has become the digital communications standard of choice for Private Mobile Radio users. During the last ten years Sepura has been at the forefront of innovation and change in the TETRA market, being first to market with innovative solutions to the operational challenges of our customers. We have continued that tradition over the last twelve months, by increasing our addressable market and strengthening our product portfolio whilst also restructuring our cost base to make the business leaner and more efficient. The outcome, despite the continuing pressures on public sector budgets, has been increased radio volumes and revenues, stronger margins and lower operating costs, which have combined to yield a significant improvement in underlying operating profit.

Delivering innovation: ATEX

Our success in developing new markets is frequently the result of innovative product development, such as our new ATEX radio which targets the oil, gas and petro-chemical industries. The STP8X was certified in March as compliant with the latest, most rigorous standards set for Intrinsically-Safe ATEX / IECEx certified products, which reduce the risk of sparks in "explosive atmospheres" such as flammable gases. Volume production commenced on schedule in the last quarter of the year, with 1,350 radios delivered, and there is already a strong order book for delivery in the coming year. In due course we expect the STP8X to represent approximately 10% of our annual volumes, as the challenging environments in which these mission critical radios operate drive a significantly shorter refresh cycle than those of conventional TETRA radios.

Delivering diversity: Beyond Public Safety

While government austerity continues to limit public sector investment in some geographies, demand from the commercial sector remains strong. We have seen demand from a wide range of geographies and sectors as commercial users invest in robust, reliable and secure communications. Our revenues from commercial customers increased by 50%, and represented 22% of total revenues for the year compared to 14% last year. Australia has emerged as one of our top five markets, with over 8,000 radios delivered to customers in the mining and natural resources sectors. Russian oil and gas customers ordered over 8,000 radios, while French transport customers purchased over 3,000 radios. Demand has continued into the current year, with major contracts secured from the Middle East and Australia for delivery in the first half of the year, and we expect our ATEX radio and 3T's infrastructure to reinforce our presence in the commercial sector.

Delivering Infrastructure: 3T

Growing demand from the commercial sector is also visible in the TETRA infrastructure market, where deployments of national TETRA networks are now largely complete or contracted. New networks being tendered are increasingly for commercial users seeking the benefits of reliable, robust and secure digital communications that TETRA offers. At the same time, customers for these smaller networks are looking for a turn-key solution, as they lack the scale to employ in-house communications expertise. This trend has been a prime motivation for the acquisition of 3T, which designs and implements small to mid size TETRA systems predominantly for customers in the commercial sector. We already work with 3T on a number of important commercial projects, primarily in Germany and Russia, and we believe that combining Sepura's market leading TETRA product portfolio and global routes to market with 3T's comprehensive infrastructure offering will enable us to deliver an entire critical communications solution to the fastest growing segment of the TETRA market. As infrastructure providers typically serve a customer throughout the 10-15 year life of a network, we expect 3T to build a strong base of recurring revenues and to improve the overall visibility of our future earnings.

Maintaining our position in our core markets

While increasing our addressable market is at the heart of our strategy, we have not lost sight of the importance of serving our existing customers, such as those in the UK, the most mature TETRA network in the world. We have approximately 160,000 radios in use on this network, our largest installed base in any country, which consistently generates over €7.5m of revenue each year from replacement batteries, earpieces and other peripherals alone. In addition to these recurring revenues, customers undergo a "refresh cycle" whereby they replace their fleets of radios every 5 - 7 years. While our UK police customers have now largely completed their first refresh cycle, ordering 13,000 such radios during the year, our largest UK customer, the Department of Health, has recently selected Sepura to refresh its fleet of approximately 15,000 hand-held radios, commencing in 2013.

Germany: Resilient demand as network deployment continues

Last year saw a temporary reduction in demand for radios, due to delays in the roll-out of the German national TETRA network, which will be the largest in the world once it is fully operational. As a consequence there were few new contracts awarded during the year, although in those states where additional infrastructure was deployed we delivered 35,000 radios under previously awarded frame contracts. We had a contracted backlog of 88,000 radios at the end of the year, and we have seen increasing tendering activity so far during 2012. Since the end of the year we have secured the third contract in Niedersachsen, for approximately 7,000 radios, and a contract for 600 ATEX radios for fire brigades in Rheinland-Pfalz. As most of the major state police forces have now tendered for their radios, we expect future awards will be for smaller volumes from city-wide organisations, which should yield higher margins than the initial high volume contracts. We are also seeing an increase in demand for replacement batteries and other peripherals as the installed base of operational radios expands.

Continued success in emerging markets

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.

The TETRA opportunity in North America

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. 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.

Gross margins strengthened to 47.6% from 46.5% as a result of the transfer of production to our new manufacturing partner, favourable customer and product mix, and reductions in the cost of third-party IPR. The continuing growth of our commercial business, typically consisting of smaller volume, higher margin orders, and the new higher-margin ATEX radio, also made positive contributions to gross margins. We also completed the restructuring announced last year, which delivered the forecast cost savings of €1.9m during the year and will make a significant contribution to our future profitability. We will continue to invest in both product innovation and our routes to market so that we can capitalise on the high growth opportunities ahead.

Outlook

We have made material progress this year in the ongoing transformation of our business. The actions that the business has taken to expand its addressable market, both organically and inorganically, while improving gross margins and restructuring the cost base, have created a strong foundation for the years ahead.

As a result, we anticipate a return to stronger growth in the current financial year, despite the challenging macro-economic environment, and remain comfortable with current market expectations.

Gordon Watling, Chief Executive Officer

12 June 2012

Business Review - Financial Review

Revenue

Terminal volumes increased by 2% to 150,000 radios during the year, with approximately half of the additional 3,000 radios being our new ATEX radios which commenced shipping in the final month of the year. Demand in our core markets of the UK and Germany declined as expected, with the first UK Police refresh cycle nearing completion and the previously announced delays to German infrastructure deployment continuing to dampen demand despite the contracted backlog at the end of the year of over 88,000 radios. However, demand in other markets remained resilient, with volumes up 11% to 98,000 radios.

ARPUS ("Average Revenue Per Unit Shipped") for the full year declined 1% to €553 as a result of continuing internationalisation of our business, with the UK (where we sell direct) declining as a proportion of overall revenues. As a result of the above, total revenues for the year increased 1% to €83.0m from €82.3m.

Gross margin

Margins increased as expected in the second half of the period to 49.1%, resulting in the full year margin increasing to 47.6% compared to 46.5% the previous year. This was the result of lower product costs from our new outsourced manufacturing partner, favourable customer and product mix, and designing third-party IP out of our products. The continuing growth of our commercial business, typically consisting of smaller volume, higher margin orders, also made a positive contribution to gross margins, along with our new high-margin ATEX products. We expect the full year contribution from ATEX and our new manufacturing partner to strengthen margins still further in the coming year.

Non-recurring costs

On 22 June 2011 we announced a restructuring programme and non-recurring costs totalling €3.7m were expensed during the period. This included €1.4m of cash costs in relation to redundancy payments, together with related HR and outsourcing consultancy and legal fees. As part of the restructuring we reviewed our portfolio of development projects and identified an alternative, more cost-effective approach to completing some of these projects. This resulted in a €2.3m impairment charge against our capitalised development costs and associated software. This impairment had no cash impact as the associated expenditure had already been incurred.

The cost reduction programme delivered the expected savings of €1.9m for the year, and will make a significant contribution to our future profitability.

Research and development costs

Gross R&D expenditure declined 13% to €14.3m from €16.4m in 2011, primarily due to the restructuring undertaken during the first half of the year. This generated cost savings from the simplification of the back-office functions and management structure in our development group. At the same time we have protected critical resources and improved productivity by creating an outsourced development centre in India. This enhances our flexibility and efficiency, and enables us to deliver more hours of engineering effort for the same overall cost. Although our gross spend has fallen we have delivered our ATEX product as scheduled, made substantial progress on our next generation platform, and delivered further software functionality for Germany.

The income statement charge reflects the timing of the capitalisation and subsequent amortisation of development expenditure, and decreased by 9% during the year to €13.7m (2011: €15.1m), representing 17% of revenues (2011: 18%). We capitalised 82% (2011: 77%) of our gross spend, reflecting both the efficiency savings from the restructuring and the increasing investment in longer-term projects such as our new platform. The amortisation charge was flat at €11.2m as it is based on spend capitalised in previous periods and was therefore unaffected by the restructuring.

The restructuring during the year did not affect our investment in routes to market, as we redeployed staff, supported by additional hires, to target opportunities in emerging markets such as Australia, Latin America and the Middle East. We also established a dedicated team to address opportunities in the North American market following the grant of the Federal Communications Commission waiver in May 2011.

Administrative costs, excluding the IFRS 2 share option charge, increased by 5% from €6.5m to €6.8m due to a foreign exchange loss of €0.5m incurred as a result of the Euro weakening sharply at the end of the first half of the year prior to the change in functional currency; excluding this foreign exchange loss administrative expenses would have declined by 3%.

Total selling, marketing, distribution and administrative costs, excluding the IFRS 2 share option charge and foreign exchange loss, decreased as a percentage of revenue to 20% (2011: 22%) reflecting our continued focus on cost control.

Operating profit

Total cash operating costs (being the gross R&D expenditure, sales and marketing costs and administrative expenses excluding non-recurring costs and the non-cash IFRS share option charge), fell by €3m or 9% to €31.7m. These lower costs, combined with the increased revenues and strengthened gross margin, resulted in our adjusted operating profit increasing by 117% to €7.8m while the IFRS operating profit increased by 13% to €4.9m.

EPS

Adjusted diluted earnings per share increased to 6.0c from 3.8c in 2011. Diluted earnings per share on a statutory basis were 4.4c (2011: 3.4c). Earnings per share is adjusted to include development costs as they are incurred and exclude non-recurring costs, the IFRS 2 share option charge and the unrealised gain or loss on marking our open foreign exchange contracts to market value.

Balance sheet and cashflows

The significant improvement in profitability during the year enabled us to refinance our existing line of credit on attractive terms a year ahead of maturity. We settled the outstanding capital and interest of €5.5m, while incurring fees of €0.2m in relation to our new five year revolving credit facility of up to £18m. None of the new facility was drawn down at the end of the period, and our cash balance at 30 March 2012 was €6.4m (compared to net cash at 1 April 2011 of €7.6m). The net cash inflow from operating activities, before restructuring costs and the impact of financial derivatives, was €18.2m, compared to €21.8m last year which included the receipt of €9.0m in relation to outstanding receivables from Portugal carried over from the prior year.

Other significant cash flows during the period related to:

• €1.4m to settle non-recurring costs incurred in the period;

• €3.4m increase in working capital, of which €5.9m related to increasing receivables as we continue to internationalise our business. We were able to reduce our inventory levels by €0.8m during the year, despite the significant increase during the first half of the year ahead of the full transfer of manufacturing to our new partner and the purchase of end-of-life inventory;

• €11.8m spent on capitalised R&D;

• €2.2m of other capital expenditure;

• €2.2m paid in relation to last year's final dividend; and

• €5.7m in relation to the refinancing.

Treasury and taxation

1. Treasury

The Group's results have been impacted significantly over the last four years by the volatility in the Euro / Sterling exchange rate, which has fluctuated between 1.4851 and 1.0272 since the Company listed in August 2007. The effect of this volatility has become more pronounced as our business has become more international, with the UK representing a declining proportion of our overall business. Approximately 85% of the Group's revenues are now invoiced in Euros, and the majority of product costs are invoiced to the Group in Euros, giving a partial natural hedge. However, the unpredictable timing of overseas revenues meant that the Group had been unable to apply hedge accounting to forward contracts taken out to convert the forecast net Euro receivables into Sterling, resulting in any gains or losses being reported within the income statement. The Group therefore reported unrealised losses of €1.3m last year in relation to forward FX contracts, and a further €0.5m loss within administrative expenses during the first half of the current year.

With effect from 1 October 2011, the Directors have changed the functional and presentation currency of the Group to Euros. From this date the Group has accounted for its activities in Euros, being the underlying currency in which the majority of revenues are earned and product costs incurred. Reporting the results in Euros removes a significant element of volatility from the Group's results by improving the visibility of reported revenues and margins. Furthermore, the majority of the Group's operating expenses relate to UK-based development and operations, and are incurred in Sterling. As these are predictable monthly cashflows the Group has been able to put in place forward contracts to sell Euros and buy Sterling to meet these expenses which comply with the requirements of hedge accounting. The result is that any changes in the fair value of the contracts are recognised within equity. This was the case with the open contracts at the period end, for which a fair value adjustment of €0.6m (net) has been recognised in equity.

This change in presentation currency is accounted for as a change in accounting policy and has been applied retrospectively, as if the new presentation currency had always been the presentation currency. The change in functional currency has been accounted for prospectively from 1 October 2011.

2. Tax

There is a tax credit for the period, as the enhanced tax relief on our research and development expenditure offset the taxable profit generated for the period. We also continue to benefit from the taxable losses created on the exercise of employee share options immediately prior to listing, which means there is no UK tax payable in respect of 2012 and we have €10.0m (net) of losses available for offset against future taxable profits (2011: €8.7m). In addition, we have deferred tax liabilities of €6.4m (2011: €7.2m) in relation to the development costs capitalised under IFRS, which do not represent future tax cash payments and will be released to income as the related costs are amortised.

Dividends

The Board has proposed a final dividend of 0.98p per Ordinary share in respect of the year (2011: 0.91p), payable on 10 August 2012 to shareholders on the register at the close of business on 13 July 2012, giving a total dividend of 1.46p per Ordinary share (2011: 1.36p). This represents a 7% increase on last year's dividend, reflecting our confidence in the future.

Accounting policies

There have been no changes in accounting policies during the year other than the change in presentation currency discussed above, and we do not anticipate any material impact on earnings or net assets for the coming year as a result of the implementation of forthcoming accounting standards.

Steve Chamberlain, Chief Financial Officer

12 June 2012

Consolidated Income Statement

1 Re-presented to reflect the Euro as presentational currency as described in Note 2.

2 Non-recurring costs comprise restructuring costs and impairment charges as set out in Note 3.

Consolidated Statement of Comprehensive Income

Consolidated Statement of Changes in Equity 1

1 Re-presented to reflect the Euro as presentational currency as described in Note 2.

Consolidated Balance Sheet

1 Re-presented to reflect the Euro as presentational currency as described in Note 2.

Consolidated Statement of Cash Flows

1 Re-presented to reflect the Euro as presentational currency as described in Note 2.

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 the preliminary announcement on 12 June 2012. Whilst the financial information included in this preliminary 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 30 March 2012 and 1 April 2011. 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 30 March 2012 will be delivered to the Registrar of Companies following the Company's Annual General Meeting on 17 July 2011. 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 30 March 2012, being the nearest Friday to the end of the period.

As previously announced, the Directors have changed the presentation and functional currency of the Group to Euros with effect from 1 October 2011. As approximately 85% of the Group's revenues are now invoiced in Euros, and the majority of product costs are invoiced to the Group in Euros, the Directors believe that reporting the Group's results in Euros removes a significant element of volatility from the Group's results and improves the visibility of reported revenues and margins. A change in presentation currency is accounted for as a change in accounting policy and is applied retrospectively, as if the new presentation currency had always been the presentation currency. Consequently, the results for the year ended 1 April 2011 have been restated in Euros, using average monthly exchange rates for income and expenses and the closing rate for balances at each reporting date (being €1.13/£1 and €1.12/£1 as at 1 April 2011 and 31 March 2010 respectively), with the resulting exchange differences being recognised within equity. The change in functional currency has been applied prospectively from 1 October 2011.

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 2 April 2011.

The following new standards and amendments to published standards have been adopted during the current period:

• IAS 24 (Revised) "Related Party Disclosures"

• IFRIC 14 (Amended) "Prepayments of a Minimum Funding Requirement"

• IFRIC 19 "Extinguishing Financial Liabilities with Equity Instruments"

• Annual improvements 2010

None of these have had any impact on the reported results of the Group.

3. Non-recurring costs

On 22 June 2011 the Group announced a restructuring programme to improve efficiency and streamline costs across the business. Non-recurring costs totalled €3,662,000, all of which have been recognised during the period. This included €1,360,000 of cash costs settled during the period in relation to redundancy payments, together with related HR and outsourcing consultancy and legal fees. The remaining €2,302,000 comprised an impairment charge against capitalised development costs and associated software. As part of the restructuring the portfolio of development projects was reviewed and an alternative, more cost-effective approach to completing some of these projects was identified, with the effect that an impairment provision was required against part of the expenditure previously incurred on these projects. The impairment has no cash impact as the associated expenditure had already been incurred.

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 and adjusted operating profit, exclude certain non-operational or non-cash items and reflect the underlying trading performance of the Group.

Earnings before interest, tax, depreciation and amortisation has been calculated as follows:

Adjusted operating profit has been calculated as follows:

5. Income tax credit

The tax credit for both periods is different from the standard rate of corporation tax in the UK, which is 26% (2011: 28%). The differences are explained below:

On 21 March 2012 the Chancellor announced that with effect from 1 April 2012 the standard rate of UK corporation tax will reduce from 26% to 24% and deferred tax balances have therefore been remeasured at this rate as the decrease was substantively enacted on 26 March 2012. The UK government has also announced its intention to reduce the main rate of corporation tax by 1% per annum to 22% by 1 April 2014. These further proposed rate reductions had not been substantively enacted at the balance sheet date and are therefore not reflected in these financial statements. The proposed reductions in the rate are expected to be enacted separately each year, and are not expected to have a material impact on the Group's annual tax charge.

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 costs, the capitalisation of development costs (together with associated amortisation), the IFRS 2 share-option charge (credit) and other gains and losses arising on marking open foreign exchange contracts to market value, 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 30 March 2012 of 0.98p per Ordinary share, totalling approximately €1.6m based on the Ordinary shares in issue at 30 March 2012. The proposed dividend is subject to approval by shareholders and has not been included as a liability in these financial statements.

During the period the Company paid an interim dividend of 0.48p per Ordinary share, totalling €809,000, in respect of the financial period ended 30 March 2012 and a final dividend in respect of the financial period ended 1 April 2011 of 0.91p per Ordinary share, totalling €1,428,000. During the prior period the Company paid an interim dividend of 0.45p per Ordinary share, totalling €730,000, in respect of the financial period ended 1 April 2011 and a final dividend in respect of the financial period ended 31 March 2010 of 0.85p per Ordinary share, totalling €1,416,000.

8. Borrowings

On 27 October 2006 the Group entered into a £30 million multi-currency term loan and revolving facilities agreement which was repayable in 20 equal quarterly instalments commencing in December 2007. On 14 October 2011 the Group obtained the consent of the lender to the early termination of this agreement and repaid the outstanding capital and interest.

On the same day the Group entered into a five year, £18 million revolving credit facility, none of which was drawn down at the end of the period. The total costs associated with taking out the new facility were €244,000, which are being amortised over the life of the facility agreement. The facility is secured by a fixed and floating charge over the Group's assets.

9. Share capital

There were no changes in the Company's issued share capital during the period and accordingly at the end of the period the Company's issued share capital comprised 137,318,580 Ordinary shares of £0.0005 each (2011: 137,318,580).

10. Cash generated from operations

11. Reconciliation of cash flows to movements in net funds

12. Subsequent events

On 16 May 2012 the Group announced the acquisition of the entire share capital of 3T Communications AG, ("3T"), which designs and implements small to mid-size TETRA systems predominantly for the commercial sector. The acquisition of 3T expands the Group's addressable market by broadening the Group's product portfolio. The initial cash consideration was €8 million, with contingent consideration of up to €5 million payable if 3T achieves cash EBITDA targets over an earn-out period. The first €4m of any contingent consideration payable will be settled in cash with the final €1m settled by the issue of ordinary shares in the Company.

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 16 May 2012. 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, 3T's assembled workforce and future profits arising from access to new markets. Acquisition costs are expected to be approximately €500,000 which will be charged to administrative expenses in the consolidated income statement for the year ending 29 March 2013. None of the goodwill on this acquisition is expected to be deductible for tax.