Half Yearly Report

Sepura PLC

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

Interim results for the six months ended 27 September 2013

On track to meet full year expectations

Strong order intake from Systems underpins full year target

28% increase in terminal shipments driven by strong demand from Germany

Sepura, a leading global provider of TETRA digital radio products and systems, today announces its interim results for the six month period ended 27 September 2013.

Financial highlights

§ Revenues up 6% to €46.0 million (H1/13: €43.5 million), comprising:

§ 8% increase in terminal revenues to €41.3 million (H1/13: €38.3 million)

§ Systems revenues of €5.1 million (H1/13: €5.4 million)

§ Portalify revenues of €0.3 million

§ Adjusted operating profit1 of €0.6m (H1/13: €3.6 million), as a result of increased investment in new products and routes to market, and a €2.3 million foreign exchange headwind

§ IFRS operating profit of €1.2 million (H1/13: €2.7 million)

§ Operating cash conversion of 92% (H1/13: 100%) and closing net debt of €3.3 million (H1/13: €2.2 million) after acquiring Portalify

§ Interim dividend increased 15% to 0.59p per share (H1/13: 0.51p)

§ Gross margin of 46.3% on a constant currency basis (H1/14: 44.9%; H1/13: 46.4%)

Operational highlights

§ Strong demand across core markets

§ Record deliveries in Germany as network roll-out continues

§ Further refresh wins in the UK

§ Medium term growth drivers validated

§ Record Systems' order book of €10.3 million (H1/13: €3.3 million)

§ Portalify acquired and integration on track

§ Long term growth prospects enhanced

§ First infrastructure contract in North America as global TETRA adoption continues

§ Additional investment in product development, including DMR portfolio

Commenting on the Company's results, Gordon Watling, Chief Executive Officer, said:

"The record first half revenues we have announced today are a direct result of investing in products and markets we have previously identified as offering long-term growth potential. Our continuing investment, in both our organic product portfolio and through our acquisition of Portalify, together with Systems' record order book, gives us confidence we can deliver sustainable growth during the remainder of the year and beyond."

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.

Sepura will hold an analyst presentation at 9.00 am today in the offices of Investec Securities, 2 Gresham Street, London, EC2V 7QP. The presentation slides will be available on the investor relations pages of the Company's website following the event at: http://investors.sepura.com.

The Interim Report to Shareholders will be issued on 8 December 2013.

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 TETRA (TErrestrial Trunked RAdio) digital radios, infrastructure and applications. We provide specialist solutions for the public safety, transportation, oil and gas, mining, utilities, industrial and other commercial sectors.

The Group offers one of the broadest ranges of TETRA products available and is often first to deliver innovative products and features to its markets. The recent acquisitions of specialist TETRA infrastructure systems supplier, 3T - now rebranded Sepura Systems - and application developer Portalify have enhanced Sepura's capability to deliver powerful and easy-to-deploy systems.

Headquartered in Cambridge, England and employing over 300 staff, 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 that we have delivered record first half revenues while also building a platform for further growth through broadening both our product portfolio and geographical reach.

Our Systems business has made a significant contribution to our success since its acquisition last year. We are delighted that Toronto Transit Corporation selected Sepura to deliver the first phase of its TETRA infrastructure deployment, and this will be an important reference customer as we grow our pipeline in North America. We have also won major infrastructure contracts in other new markets such as Luxembourg and the Middle East. These contracts have contributed to a record Systems' order book of €10.3 million for delivery in the next twelve months, and will yield a base of strong, recurring revenues throughout the 10-15 year life of these networks.

Systems' strong order intake has led us to accelerate development of the next generation of base stations and will leverage the investment currently being made in our next generation platform. We have continued our strategy of building a full solution capability, which we have progressed further with the acquisition of software applications developer Portalify in July. Whilst this is a relatively small addition to the business in the near-term, it is strategically significant in that it provides access to a broad suite of applications that are in increasing demand from our customers and we therefore expect to deliver sustainable, long-term growth for the Group. We plan to expand our portfolio still further with a DMR product range, which will address the fastest growing segment of the Private Mobile Radio ("PMR") market. We anticipate this will deliver modest revenues in FY15 and provide an alternative, non-proprietary solution, for customers who do not require the extensive functionality of TETRA.

These investments, together with investment in our business systems to ensure that they are scalable and will support our future growth, and the impact of changes in foreign exchange rates, had the expected impact on our short-term profitability for the period. However, the compelling solution we are building for our customers, by combining infrastructure, terminals, and applications, is creating a robust and resilient business.

Our encouraging start to the year, our continued strong operating cash generation, and record System's order book, gives us confidence in our ability to meet market expectations for the full year. This is reflected in a further 15% increase in our interim dividend to 0.59p per share.

I would like to welcome Portalify's employees, who join us at such an exciting time for the Group, and to thank all of our employees for their hard work and their contribution to our further success.

John Hughes, CBE

Chairman

18 November 2013

INTERIM MANAGEMENT REPORT

The market trends identified at the end of the last financial year have continued into the current year, with continued commercial and geographical adoption of TETRA. The Group has built upon its early terminals contract in Canada with its first infrastructure contract in North America, expanded its product portfolio with the acquisition of Portalify, and continues to make solid progress in all of its most important markets.

Market review

Building the "Critical Communications Company"

The transition from primarily national, multi-site and multi-agency TETRA networks to smaller, frequently single site, networks, primarily for use by individual commercial organisations, has continued as forecast. These commercial users also have a clear preference for a single supplier delivering their complete solution. The acquisition of Sepura Systems (formerly 3T) last year has enabled the Group to develop its full solution capability and to capitalise on these opportunities. This strategy has been validated by major contracts secured during the period, including the Group's first infrastructure contract in North America with Toronto Transit Corporation, and contracts for TOTAL's Leuna oil refinery and CREOS, a leading Luxembourg utility.

The Group has also successfully leveraged its existing public safety credentials and routes to market, creating additional opportunities beyond Systems' traditional markets and leading to the award of several significant public safety contracts. While work on all of these contracts has already commenced, they have contributed to a record order book for infrastructure projects totalling €10.3m (H1/13: €3.3m) at the end of the period.

Improving customer productivity

Improving productivity is a critical driver for many organisations upgrading communications equipment, and software tools and applications that deliver customer efficiency must be an integral part of a comprehensive customer solution. The acquisition of Portalify during the period has significantly expanded the Group's range of software tools and applications that enable customers to deploy and manage resources more effectively. Portalify provides end-to-end solutions for mobile working via a suite of software applications which increase the safety, productivity and efficiency of professional mobile radio users, across multiple communications standards. Its existing portfolio includes task management, asset location, image messaging and database query applications.

Portalify's current revenues are derived primarily from a small number of public safety customers in Western Europe, with contracts that typically generate revenues over a multi-year cycle with maintenance revenues, project expansions and other change requests being incremental to the original contract value. Combining Portalify's expertise with the Group's global routes to market is expected to create significant opportunities in both public safety and commercial markets.

Germany: Accelerated radio deployment as core network infrastructure nears completion

Progress in Germany continues to be strong. Approximately 90% of the 4,500 base stations required by the German national public safety network, BDBOS, have now been installed, of which approximately 90% are operational and providing coverage for 365,000 out of the expected 600,000 users. The progress on infrastructure deployment drove record deliveries of 34,000 (H1/13: 21,000) radios, together with awards under new framework contracts for a further 7,000 radios from additional agencies such as fire, ambulance and voluntary rescue services as they prepare to join the network.

UK: Further refresh success

The Group's UK business continues to be dominated by a "refresh cycle", with 4,900 (H1/13: 4,400) radios delivered to existing police users upgrading their existing radios, and orders received for 4,000 radios for the DoH refresh programme scheduled for delivery in the second half of the year. The Group also delivered over 1,000 radios to police forces choosing to switch from their incumbent supplier to Sepura, further strengthening the Group's position in the world's most mature TETRA market.

Emerging markets and commercial users

In addition to these ongoing successes in its core markets, the Group has increased volumes in new and emerging markets by 12%. The strong performance in Germany, together with Systems' successes in public safety and Portalify's contribution being exclusively from public safety users, resulted in public safety revenues for the period growing faster than commercial revenues, which represented 32% (H1/13: 35%) of total revenues.

The Group saw strong demand from the mining sector, especially in Australia which has rapidly established itself as one of the Group's top five markets, and transportation, especially in France where the Group supplied 4,600 radios for multiple bus and train projects. Demand from the Oil & Gas sector for the Group's market-leading ATEX radio softened following several significant contracts at the end of last year, and the satisfaction of pent-up demand immediately following launch. Demand is forecast to strengthen during the remainder of the year.

Foreign exchange

The volatility of both Euro / GBP and Euro / USD exchange rates over the last two years has had a €2.3 million adverse impact on the results for the period. Adjusted operating profit on a constant currency basis was €2.9 million, after adjusting for the following items:

§ €0.4 million reduction in the Euro value of the Group's Sterling revenues, as the Euro has strengthened relative to Sterling compared to the same period last year;

§ €0.4 million increase in product costs due to adverse movements in the Euro / USD rate compared to the same period last year, which impacts the cost of components sourced by the Group's manufacturing partners; and

§ €1.5 million increase in the reported Euro value of the Group's Sterling operating costs, as explained below.

Some of the inherent volatility in exchange rates has been mitigated by the Group's policy of hedging the majority of its operating expenses, which relate to UK-based development and operations and are incurred in Sterling. The Group therefore has in place forward contracts to sell Euros and buy Sterling to meet the forecast Sterling expenses for the next twelve months. While this provides certainty as to the future Euro costs of the Group, the average hedge rate for the period was €1.27 / £1, based on prevailing rates during the first half of last year, compared to €1.14 / £1 for the same period last year which were in turn based on prevailing rates twelve months previously. As a result the Group's hedged Euro operating costs have increased by 11%.

The hedges outstanding at the end of the period covered £19.2 million of forecast expenses, with the average hedge rate for the second half of the year being €1.211 / £1 (H2/13: €1.184 / £1) and the average hedge rate for the first half of next year being €1.176 / £1.

Revenues

In the six month period under review, revenues grew 6% to €46.0 million (H1/13: €43.5 million); €0.3 million of the increase related to Portalify, whose results have been consolidated for the first time following its acquisition on 25 July 2013. The total number of terminals shipped increased by 28% to 78,800 from 61,700 terminals shipped in the same period last year. A significant proportion of the incremental volumes were for German customers, diluting terminal ARPUS for the period from €620 to €525.

Gross margin

The reported gross margin of 44.9% was adversely affected by the exchange rate movements referred to above. On a constant currency basis the gross margin was 46.3%, in line with the 46.4% reported for the same period last year. The impact on gross margin of significant incremental volumes delivered in Germany, where high volume contracts attract competitive pricing and margins, was largely mitigated by product cost reduction programmes - especially in relation to Systems' products - and other changes in product and customer mix.

The acquisition of Portalify has had the expected accretive impact on gross margins as its software revenues have relatively low associated product costs. This, together with a further contribution from the continued cost reduction programmes at Systems which leverage the Group's existing supply chain and manufacturing experience, is expected to deliver strengthened gross margins during the remainder of the year.

Research and development

Gross expenditure on R&D increased by 22% to €8.4 million, (H1/13: €6.9 million); 9% of this increase related to foreign exchange, and 3% was due to the inclusion of Systems' costs for a full six month period. Investment in research and development during the period continued to focus on maintaining product leadership, with significant investment in the next generation platform and increasing the range, while reducing the cost, of Systems' product portfolio.

Capitalised development expenditures represented 84% of related gross development spend, compared to 78% last year.

The amortisation charge for the period decreased to €4.3 million (H1/13: €4.6 million) as the development expenditure on several of our older products is now fully amortised, and amortisation of the investment in our new platform has yet to commence.

Selling, marketing and distribution costs and administrative expenses

Selling, marketing and distribution costs increased by 16% to €7.2 million (H1/13: €6.2 million); 7% of this increase was due to foreign exchange and 2% was due to the inclusion of Systems' costs for a full six month period. The remainder reflects the Group's continued investment in expanding its routes to market, targeting opportunities offering significant long-term growth such as North America, the world's largest PMR market.

The Federal Communications Commission's formal rule-making licencing TETRA technology in the United States last September has resulted in tender activity by commercial organisations which have decided to adopt TETRA. The Group has therefore increased its presence in this key emerging market for the Group's products. Steve Cragg was appointed as President of Sepura North America on 16 May 2013, having previously established several successful North American PMR businesses, and additional sales resource has been recruited to train and support local partners.

Administrative expenses, excluding the IFRS 2 share option cost, non-recurring costs and the amortisation of acquired intangibles increased by 29% compared with the same period last year; 14% of this increase related to foreign exchange and 3% related to the incremental costs of Systems and Portalify 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 costs) increased by 21% to €20.1 million (H1/13: €16.5 million).

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. The adjusted operating profit for the period was €0.6 million, or €2.9 million on a constant currency basis (H1/13: €3.6 million). The operating profit reported under IFRS was €1.2 million (H1/13: €2.7 million).

Non-recurring costs

The Group incurred €245,000 of costs, primarily professional fees, in connection with the acquisition of Portalify, together with €232,000 of restructuring costs as Portalify is integrated with the Group's existing operations. Equivalent costs were incurred in the same period last year, of €560,000 and €569,000 respectively, relating to the acquisition and subsequent integration of 3T.

Taxation

The Group has continued to benefit from enhanced tax relief on qualifying research and development expenditure, albeit at the "Large Company" rate of 30% rather than the "SME" rate of 125% applicable in the prior year. The Group also continues to benefit from its brought forward tax losses, with €9.8 million (net) of losses available for offset against future taxable profits (H1/13: €10.6 million) in the UK; these are not available to the Group's overseas subsidiaries, which paid an aggregate of €78,000 of corporate taxes during the period. The Group also has deferred tax liabilities of €7.0 million (H1/13: €6.4 million) in relation to the development costs capitalised under IFRS, together with €1.0 million (H1/13: €1.1 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.

Earnings per share

Adjusted diluted earnings per share, based on expensing development costs as they are incurred and excluding non-recurring costs, the IFRS 2 share option charge and the amortisation of acquired intangibles, was 0.4 € cents (H1/13: 2.8 € cents). The diluted earnings per share was 0.7 € cents (H1/13: 2.3 € cents).

Dividends

The Board has declared an interim dividend of 0.59 pence per Ordinary share, an increase of 15% over last year. This interim dividend will be payable on 7 January 2014 to those shareholders on the register at the close of business on 13 December 2013.

Cash flow and financing

Cash generation continues to be strong, with a cash conversion ratio of 92%, compared to 100% last year. Closing cash balances at 27 September 2013 stood at €4.8 million (H1/13: €8.4 million), and net debt, after deducting outstanding borrowings of €8.1 million (H1/13: €10.6 million), was €3.3 million (H1/13: €2.2 million), including €1.1 million of debt acquired with Portalify.

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

§ €4.0 million paid to settle the contingent consideration outstanding from the acquisition of 3T last year;

§ €1.0 million initial consideration paid for the acquisition of Portalify (with a further €4.9 million payable in cash if Portalify achieves revenue and operating profit targets over an earn-out period);

§ €5.0 million of borrowings drawn down to pay for the above;

§ €6.5 million spent on capitalised development costs;

§ €1.2 million of other capital expenditure;

§ €2.1 million paid in relation to last year's final dividend;

§ €0.6 million purchasing shares for Treasury; and

§ €0.1 million received from employees exercising SAYE options that matured during the period.

Share capital

During the period options over 267,000 shares vested following the maturity of one of the Company's SAYE schemes. In anticipation of a significant uptake by employees for this and other schemes due to mature later in the year, the Company purchased 350,000 shares for Treasury prior to the maturity of the scheme. A total of 413,000 shares were issued to employees who exercised options before the end of the period, and 94,303 shares were held in Treasury at the end of the period.

Options were granted to senior executives under the Company's Long-Term Incentive Plan totalling 2.0 million shares (H1/13: 3.1 million). These will vest if targets relating to the period to 31 March 2016 are achieved.

The Company also issued 1.3 million shares to settle €1 million of the contingent consideration payable in respect of the acquisition of 3T Communications AG, now renamed Sepura Systems GmbH, last year.

Principal risks and uncertainties

The principal risks and uncertainties facing the Group for both the first six months and the remaining six months of the financial year continue to be those stated on pages ten and eleven of the Group's 2013 Annual Report and Accounts, which are summarised as follows:

§ The risk that customers delay issuing tenders or orders, as a result of changes in political and economic conditions, with a consequential delay in the timing of our revenues.

§ The risk that the Group fails to secure a market-leading position in emerging markets, with a detrimental effect on future revenue opportunities and profitability.

§ The risk that alternative products and technologies are developed by our competitors, which threaten our future profitability.

§ The risk that strong competition may have an adverse impact on pricing and profitability.

§ The risk that rapid growth may place a significant strain on management, operational and financial resources.

§ The risk that fluctuations in exchange rates, especially the Euro, give rise to revaluations of assets and liabilities which impact our future profitability.

§ The risk that there is a breach of information security or integrity.

§ The risk that our outsourced electronic manufacturing partners are unable to supply sufficient critical components to meet our end-user demand, or that there is a recall of such products due to poor quality products being supplied to us.

§ The risk that we are unable to effectively integrate acquired businesses.

CONDENSED CONSOLIDATED HALF-YEAR INCOME STATEMENT

1 Non-recurring costs relate to the acquisition of Portalify OY in the current period, as described in Note 8, and subsequent restructuring costs. Non-recurring costs in the prior period related to the acquisition of 3T Communications AG (now renamed Sepura Systems GmbH) and subsequent restructuring costs.

The results above relate to continuing operations.

CONDENSED CONSOLIDATED HALF-YEAR STATEMENT OF COMPREHENSIVE INCOME

CONDENSED CONSOLIDATED HALF-YEAR STATEMENT OF CHANGES IN EQUITY

CONDENSED CONSOLIDATED HALF-YEAR BALANCE SHEET

CONDENSED CONSOLIDATED HALF-YEAR STATEMENT OF CASH FLOWS

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTSFOR THE HALF-YEAR ENDED 27 September 2013

1. General information

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

The Company has prepared condensed consolidated financial statements for the period to 27 September 2013, being the nearest Friday to the end of the period. This approach aligns external reporting dates with internal reporting periods and is in accordance with industry practice.

The condensed consolidated financial statements were approved for issue on 18 November 2013.

The condensed consolidated financial statements do not constitute the statutory accounts of the Company within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year ended 29 March 2013 have been delivered to the Registrar of Companies. The auditors have reported on those accounts and their report was not qualified and did not contain a statement under section 498(2) or (3) of the Companies Act 2006.

2. Basis of preparation

The condensed consolidated financial statements have been prepared in accordance with the Disclosure and Transparency Rules of the Financial Conduct Authority (previously the Financial Services Authority) and with IAS 34 "Interim financial reporting" as adopted by the European Union. The condensed consolidated financial statements should be read in conjunction with the annual financial statements for the year ended 29 March 2013, which have been prepared in accordance with IFRS as adopted by the European Union. These condensed consolidated financial statements have been prepared under the same accounting policies and methods of computation as those applied in the preparation of the most recent Annual Report.

The preparation of these condensed consolidated financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets and liabilities, income and expense. Actual results may differ from these estimates. In preparing these condensed consolidated financial statements the significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those applied to the consolidated financial statements for the year ended 29 March 2013.

The Group's financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements for the year ended 29 March 2013.

After making due enquiry, and having considered the Group's forecast for the coming year together with outline projections through to 2015 and available bank facilities, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Consequently, the going concern basis has been applied in preparing these condensed consolidated financial statements.

3. Segmental reporting

IFRS 8 defines operating segments as those activities of an entity about which separate financial information is available and which are evaluated by the Chief Operating Decision Maker to assess performance and determine the allocation of resources. IFRS 8 also sets out the process by which operating segments may be amalgamated into reportable segments because they share the same economic characteristics due to the nature of the products sold, the production processes used and the type of customer for the products. The Company has a single reportable segment, being the design, development and supply of secure digital radio products and systems developed specifically for critical communications applications.

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 charge (credit)

The income tax charge (credit) for the period is recognised based on management's best estimate of the weighted average annual income tax rate expected for the full year. The tax charge (credit) for the period is lower (2013: higher) than the standard rate of Corporation Tax in the UK, which is 23% (2013: 24%). The differences are explained below:

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 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 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

During the period the Company paid a final dividend in respect of the financial year ended 29 March 2013 of 1.17 pence per Ordinary share, totalling €2,054,000.

An interim dividend for the financial year ending 28 March 2014 of 0.59 pence per Ordinary share has been declared payable by the Company on 7 January 2014 to shareholders on the register at the close of business on 13 December 2013. The declared dividend has not been included as a liability in these condensed consolidated financial statements.

8. Acquisitions

On 25 July 2013 the Group announced the acquisition of the entire share capital of Portalify OY, ("Portalify"), which designs and implements software applications. The acquisition of Portalify expands the Group's addressable market by broadening the Group's product portfolio. The initial cash consideration was €1 million, with further contingent consideration of up to €4.9 million payable in cash if Portalify achieves revenue and operating profit targets over an earn-out period.

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 software assets developed by Portalify. 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 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 of €245,000 have been charged to the condensed consolidated half year income statement, together with €232,000 of subsequent restructuring costs as Portalify is integrated with the Group's existing operations.

Portalify reported a loss after tax for the year ended 31 December 2012 of €439,000. Portalify contributed €270,000 of revenue and a loss of €30,000 to the Group's results during the period, while the Group's revenue and earnings would have been €46.4 million and €0.5 million respectively if Portalify had been a member of the Group for the whole period.

9. Capital expenditure

Major additions to property, plant and equipment comprised test and IT equipment.

10. Reconciliation of cash flows to movements in net debt

On 14 October 2011 the Group entered into a five year, £18 million revolving credit facility, which is secured by a fixed and floating charge over the Group's assets. At the end of the period €5 million had been drawn down under this facility to finance the acquisition of Portalify and settle €4 million of the contingent consideration relating to the acquisition of 3T in the prior year.

11. Provisions

At the end of the period provisions included €4.9 million of contingent consideration relating to the acquisition of Portalify as explained in Note 8 above.

During the period the Company paid additional consideration of €4 million in cash and €1 million in shares due to the former owners of 3T Communications AG ("3T"), which was acquired in the prior period and for which full provision had been made. This contingent consideration was payable as 3T had achieved its cash EBITDA targets during the relevant earn-out period.

12. Share capital

During the period the following changes occurred in the Company's issued share capital of Ordinary shares of £0.0005 each:

In addition, during the period the Company purchased 350,000 Ordinary shares for Treasury for aggregate consideration including costs of €570,000. 387,680 Ordinary shares were issued out of Treasury to settle the exercise of employee share options, for total consideration paid by employees of €102,000, leaving 94,303 (2013: 204,823) Ordinary shares held in Treasury at the end of the period.

13. Seasonality

Deliveries during the period reflected the usual weighting towards the second half of the year, which includes the end of the UK and German public sector fiscal years and the corresponding increase in business as customer budgets are confirmed.

14. Contingent liabilities

The Group has entered into guarantee and performance bond arrangements with its customers totalling approximately €3.5 million. The Group is also subject to disputes with suppliers during the ordinary course of business. Provision is made for any amounts that the Directors consider will probably become payable under such arrangements.

15. Financial instruments

Derivative financial instruments and hedging activities

Derivatives are initially recognised at fair value on the date that a derivative contract is entered into and are subsequently re-measured at their fair value.

Fair value estimation

The fair value of foreign exchange contracts is determined by comparing contracted forward exchange rates with the prevailing exchange rates at the balance sheet date. As a result they fall into "Level 2" of the fair value hierarchy as defined in Paragraph 27A of IFRS 7 "Financial Instruments: Disclosures". The nominal value less impairment provision of trade receivables and payables approximates to their fair value. The book value of all other financial assets and liabilities approximate to fair value.

16. Post balance sheet events

There have been no material post balance sheet events.

Statement of Directors' responsibilities

A copy of the condensed consolidated financial statements of the Group is placed on the Company's website. The Directors are responsible for the maintenance and integrity of information on the Company's website. Information published on the internet is accessible in many countries with different legal requirements. Legislation in the United Kingdom governing the preparation and dissemination of the financial statements may differ from legislation in other jurisdictions.

The Directors confirm that to the best of their knowledge:

§ This condensed set of consolidated interim financial statements has been prepared in accordance with IAS 34 as adopted by the European Union;

§ The interim management report includes a fair review of the information required by:

§ DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remainder of the financial year; and

§ DTR 4.2.8R of the Disclosure and Transparency Rules, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any material changes in the related party transactions described in the last Annual Report.

The Directors of the Group are listed in the Group's Annual Report for the year ended 29 March 2013, with the exception of the following changes in the period:

§ Tony Illsley and David Tilston retired on 22 July 2013; and

§ Nigel Smith and Gordon Stuart were appointed on 22 July 2013.

A list of the current directors is also maintained on the Sepura website: www.sepura.com.

By order of the Board,

Gordon Watling

Chief Executive Officer

Steve Chamberlain

Chief Financial Officer

18 November 2013

INDEPENDENT REVIEW REPORT TO SEPURA PLC

Introduction

We have been engaged by the Company to review the condensed consolidated financial statements in the half-yearly financial report for the six months ended 27 September 2013, which comprises the condensed consolidated half-year income statement, the condensed consolidated half-year statement of comprehensive income, the condensed consolidated half-year statement of changes in equity, the condensed consolidated half-year balance sheet, the condensed consolidated half-year statement of cash flows and related notes. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the condensed consolidated financial statements.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the Directors. The Directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 2, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the European Union. The condensed consolidated financial statements included in this half-yearly financial report have been prepared in accordance with International Accounting Standard 34, "Interim Financial Reporting", as adopted by the European Union.

Our responsibility

Our responsibility is to express to the Company a conclusion on the condensed consolidated financial statements in the half-yearly financial report based on our review. This report, including the conclusion, has been prepared for and only for the Company for the purpose of the Disclosure and Transparency Rules of the Financial Conduct Authority and for no other purpose. We do not, in producing this report, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.

Scope of review

We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity" issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK and Ireland) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated financial statements in the half-yearly financial report for the six months ended 27 September 2013 are not prepared, in all material respects, in accordance with International Accounting Standard 34 as adopted by the European Union and the Disclosure and Transparency Rules of the United Kingdom's Financial Conduct Authority.

PricewaterhouseCoopers LLP

Chartered Accountants

Cambridge

18 November 2013