Ann: AGM Address by Chairman and CEO Presentation, page-29

Harken

Sen has two parts of the business - annuity income from maitainance and new business income from new sales. It was mentioned today that ongoing income now represents 40% of the revenue , up from 3% 4 years ago . So in terms of new sales , this cant be accurately measured as it relies on the end client. What they did give details about is that one client is really close and the other two a bit further away . They also mentioned the custom algorithm revenue is expected in the second half as well as suredrop income. So with ordering of the 10g encryptor returning to normal, maintaince income running at higher levels and new revenue from various sources , they could confidently inform the market that this years revenue will be elevated but importantly the future for Senetas is one of multi product multi revenue income stream that has exponential growth. They also mentioned that the impact of regulatory changes in Europe from next March is going to make data encryption a must have not a nice to have. FG also suggested he believes this will soon become a matter of director fiduciary responsibility to protect data and privacy.

From a stock valuation point of view the markets that attract high multiples are those businesses that are have low capital needs and thus a much higher return on equity and ROI. This is exactly the kind of company SEN is and the market values businesses like this that are growing earnings on multiples of 20-30 . So on a forward npat of 10 m SEN would trade at 20-30%
I think the next twelve months will confirm that SEN is a multi revenue stream business, the twelve months after will take NPAT to levels that will be much higher than previous records.
I am here for the next 2-3 years as I think the revenue will be significantly higher as will the SP. in the next 12 months I simply and looking for revenue from the full product range ( with the exception of the virtual encrypted) Although this in my opinion will result in record NPAT the true picture will be seen in the 12-24 month timeframe . ( my thoughts ofcourse )