SEPU.L Share News (SEPU)

(Adds executive comment, detail.) By Hannah Benjamin Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Digital radio company Sepura PLC (SEPU.LN) Tuesday said it expects to launch a new wave of radios in 2013 and forecast a 50:50 split in revenue coming from its core TETRA range and the new-style handsets. The firm currently makes Terrestrial Trunked Radio, or TETRA, digital radios, which are mostly used by the emergency services and in the transport, utilities and commercial sectors. But it wants to expand into digital mobile radio handsets--which aren't dependant on TETRA as the communications bearer--and tap into commercial markets, which it said will double the size of its addressable market. "TETRA's still the dominant standard but there's also a growing need from the commercial market rather than public safety market for a lower-spec digital standard radio that doesn't have as many features," Chief Executive Gordon Watling told Dow Jones Newswires Tuesday. He said it will be cheaper to make DMR radios due to the handsets needing less functionality than TETRA ones. However, the margins on the new handsets will be similar to what the firm makes on TETRA. "We think DMR will be a good market for us from 2013 on, which is when we believe the market will be ready for us to enter. From an investment point of view we should have our first product ready to launch by then," Watling said. He expects DMR to bridge the gap between the transition from analog to digital radio. He wouldn't say how much cash Sepura is pumping into developing the new radios, but said the cost would be covered by the group's existing resources. Sepura delivered 23% more unit shipments in fiscal 2010, ended March 31, than the year before. Revenue in the fiscal climbed 6% to GBP78.9 million from GBP74.1 million a year earlier as the company benefited from a stronger euro, although pretax profit fell to GBP9.4 million from GBP10 million. Its operating profit declined to GBP9.6 million from GBP10.5 million, while it also paid out more for raw materials and making its products. Sepura delivered 154,000 radios in fiscal 2010 and said emerging markets like Asia and the Middle East present big opportunities for growth. This is likely to see a continued decline in the proportion of revenue coming from the U.K., where near-term trading remains uncertain ahead of an imminent budget from the new government. "We're able to get relatively close to the senior decision-makers and what we've heard so far is that the majority of the focus [for cuts] is on the back office side rather than policemen on the street," Watling said. Police officers, along with paramedics, are one of the biggest users of Sepura's TETRA radios, given the technology's ability to be used over a long range as well as its high speed. -By Hannah Benjamin, Dow Jones Newswires; 44-20-7842-9298; hannah.benjamin@dowjones.com (END) Dow Jones Newswires June 08, 2010 05:06 ET (09:06 GMT)