LONDON (Alliance News) - Sepura PLC said it has raised GBP65 million in a share placing to strengthen its balance sheet and support its growth strategy, as it reported a swing to a pretax loss for its recently ended financial year.
For the year to April 1, Sepura reported a pretax loss of EUR19.0 million, swung from a pretax profit of EUR16.7 million, on revenue of EUR189.7 million, up from EUR131.2 million.
This was mostly as a result of one-off costs of EUR26.6 million related to its acquisition of Teltronic SAU, and subsequent restructuring costs, amongst others.
Sepura has raised GBP65 million through the placing of 185.7 million at 35 pence, a 53% discount to its closing price of 75.00 pence Friday. Shares in Sepura were down 30% at 52.00 pence Monday morning.
The company said the year had been one of "considerable change", and said that, at the same time its performance had been hit by softening of some of its important markets, and said its DMR and Applications businesses have not grown as rapidly as expected.
As a result of a higher-than-expected debt position, it has opted to raise capital in order to provide it with working capital. In conjunction with this, Sepura has also agreed to review its business model. It is taking actions to improve its revenue visibility, but said that some of its actions will result in revenue being recognised later than previous expected.
As such, Sepura expects for its current year its adjusted earnings before interest, tax, depreciation and amortisation and revenue to be lower than the EUR11 million and EUR24 million it originally expected.
"The fund raising announced today will significantly strengthen our balance sheet and provide the right capital structure to support our growth strategy," said Chief Executive Officer Gordon Watling in a statement.
"We see significant opportunities to build on recent success in the global transport sector such as New York City Transit, as well as grow our business in North America - the world's largest PMR market. We also expect FY17 and beyond to benefit from our recent investment programmes," Watling added.
By Hana Stewart-Smith; hanassmith@alliancenews.com; @HanaSSAllNews
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