senetas profitable completes 14m turnaround, page-2

Sydney - Tuesday - August 26: (RWE Australian Business News) -
Senetas Corporation Ltd (ASX:SEN) earned a net profit of $151,799 in the
12 months ended June 30, compared with a net loss of $15.64m for 2007.
Revenues for "the world's leading developer and supplier of high
speed network encryption hardware" rose 43pc to $15.85m from $11.06m.
The company has not paid a dividend since 2006.
Senetas said its return to profitability over the past year was
a result of a 143pc improvement over 2007 direct product sales and
channel revenue for its key encryption product lines, "CypherNet", an
18pc increase in consulting revenue, plus ongoing cost reductions.
Significant in the product sales improvement was a 258pc rise in
SafeNet royalties.
"Senetas' direct sales and maintenance revenues have also
increased 196pc and 239pc, respectively, indicating the company is
becoming less reliant on SafeNet and both revenue sources and risk are
being diversified," chairman Mr Alan Stockdale said.
He said the company had healthy sales pipelines and management
had worked to further improve visibility of international channel
partner sales and sales forecasting to ensure timelines for
manufacturing and delivery continued to be met.

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While Senetas had achieved "an unprecedented turnaround" in its
performance over the previous fiscal year, it recognised that the result
fell below its market forecast.
Mr Stockdale said that in the prevailing economic circumstances
of the past year, forecasting $1.5m to $2.5m profit was "possibly too
aggressive".
Explaining the shortfall, he said sales were delayed due to
changes to timelines on a major tender in the Middle East and, whilst
the budget anticipated significant sales via UK-based reseller nCipher,
a change of management at nCipher resulted in that company making no
sales of Senetas CypherNet products.
Once these risks to the sales forecast were identified,
management moved quickly to improve its visibility of global sales
through a combination of new sales channel management and direct sales
leadership in a number of international markets.