my interpretation, page-33

Ferret's Stock to Watch: SENETAS CORPORATION LIMITED
08:59, Friday, 3 March 2006

A COMPANY OFFERING A WINDOW OF OPPORTUNITY DUE TO ADVERSITY

Sydney - Friday - March 3: (RWE Aust Business News)
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OVERVIEW
********

A company that suffers adversity sometimes offers a rare buying
opportunity that does not often occur.
You could put IT security group Senetas Corporation (SEN) into
this category.
The company yesterday reported that net profit had fallen 84 per
cent to $798,636 in the six months to December 31 from $5.05 million in
the previous year.
Revenues fell 40 per cent to $7.22 million from $12.01 million.
Operating profit was down 68 per cent at $1.17 million from $3.71
million.
At first glance it was not a good set of numbers to give
investors confidence in the company.
But the punchline was that a sizable piece of business failed to
materialise in the December half.
The company told the ASX in its interim statement that there was
a delay in a multi-million dollar sale due for the latest period and it
will now be booked in the current quarter.
However, the profit was affected by one off-charges relating
to the extraordinary general meeting held during December.
On a normalised basis, operating profit would have been around $3
million.
Trading in the third and fourth quarters of 2006 are expected to
be strong with increasing demand for both the company's SONET products
and new Ethernet products.
Senetas reiterated its guidance that operating profit for the
full year would be $11 million.
During the year the company generated other income from the sale
of software and investments amounting to $800,000.
Directors are confident enough to declare an interim dividend of
a steady 0.75c, unfranked, payable on March 31.

SHARE PRICE MOVEMENTS
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Shares of Senetas yesterday rose 6.5c to 63.5c. Rolling high for
the year has been 91c and low 20c. Dividend is 0.9c to yield 1.42pc.
Earnings per shares is 2.08c while p/e ratio is 30.53. The company has
462.9 million shares on issue and market cap is $263.8 million.
Senetas recognised in the last half the issue of the lumpiness of
sales due to the nature of its market.
It decided the only way to address this effectively is through
multiple routes to market.
Senetas has worked with its partner SafeNet on this issue and the
result is an agreed strategy whereby Senetas has become more directly
involved in sales and marketing activities in Asia and the Middle East
which will show immediate financial impact.
Senetas confirmed in its latest release that it has been working
closer with SafeNet over the last two months.
The market opportunities for Senetas are exciting and expanding
rapidly.
The company has continued increasing its R&D investment in order
to sustain its planned revenue growth.
Having launched its new Ethernet encryptor range of products
in late 2005, Senetas expects significant revenue expansions from this
new range of products over the next few years.
The company has also commenced work on its new CypherBlade
product range and will be advising the market further about this product
range and new developing business opportunities.
CypherBlades are specifically designed to be integrated into
network switches and routers which is a multi-million market.
The company is working on a joint development with two US-based
companies and will provide a further detailed briefing to the market
towards the end of this quarter.

BACKGROUND
**********

Senetas Corporation Ltd listed on the Australian Stock Exchange
as an IT-related venture capital investor in 1999, known as Secure ID-Net
Ltd.
Based in Melbourne with offices in Sydney, Senetas Group employs
80 people.
The company is debt free and growing strongly, delivering a
maiden profit of $3.2 million in FY04 on revenues of $16.5 million.
Following a number of successful investments that included
CTAM, IBK Enterprise Management Systems and Datum Group, Senetas has
transitioned into an operating company focused on two main areas of
business:
* Senetas Security products and solutions, and
* its security enterprise management expertise which includes
hardware encryption devices; systems availability; data storage
control: physical location; security management (including access and
identity management); systems connectivity and communications.
Senetas security offering consists of the CTAM CypherNet range of
hardware encryption products that provide highly efficient, fast and
secure data encryption to protect sensitive data while in transit across
private and public networks.
Senetas is also a SafeNet partner, selling and implementing
SafeNet security products and solutions. Customers include the Australian
Federal Police, the Australian Tax Office, a number of agencies of the US
Department of Defence and Fifth Third Bank in the US.
Senetas Enterprise Information Professional Services deliver
tangible and significant business benefits for its customers. Customers
include Telstra, National Australia Bank, Coles Myer, Harvey Norman, NSW
Attorney General's Department, Visy Industries, Centro Properties and
Newmont Mining Company.
Security violations, whether they are deliberate, accidental,
friendly, malicious, for personal or commercial gain, continue to grow
worldwide.
They represent a significant challenge to business and
government organisations.
The security focus for most organisations is on keeping hackers
out of their network and preventing systems from being compromised by
worms and viruses.
There is usually not the same level of focus on protecting
data whilst it's in transit over private and public networks.
Senetas CTAM CypherNet hardware encryption overcomes many
limitations, transmitting encrypted data at up to 10 gigabits per second
while reducing required bandwidth by up to 40 per cent.
The CTAM CypherNet products are enhanced, integrated and marketed
around the world via a technology partnership with SafeNet.
In Australia, CTAM CypherNet customers include the Australian
Taxation Office and the Australian Federal Police.