Senetas Boosts Profit before tax by 393% ¡V Improves Cashflow & Reserves Full year results to 30 June 2009: „h Profit before tax increased by 393% „h Broadly maintained revenues despite impact of GFC „h Consulting Division contribution up 15% „h New security markets, and innovative products added „h Reduced overheads by $393K „h Maintained strong investment in R&D „h Strong positive cashflow „h Improved cash holdings by 72% and grew liquid assets 40% „h Senetas remains Debt-Free MELBOURNE 27 August 2009: The Board of Senetas Corporation Limited (ASX: SEN), the world¡¦s leading developer and supplier of high speed network encryption hardware today announced a $1.1 Million profit before tax, despite extremely difficult economic and trading conditions. Directors said that this good result had been achieved through a mixture of business won at higher profit margins, improvements in utilisation of its consulting team, the addition of new security products and continued focus on cost reduction. Revenues for the FY2009 were $15.6 million, compared with $15.8 million for the previous FY. However, Senetas reduced its cost of sales from $1.9 million to $1.4 million, also achieving $393K in expense reductions with no staff layoffs or business contraction. Additionally, the company recorded a significant increase in cash flow, up from $53,000 in 2008 to almost $2.4 million in 2009, also lifting its cash position at year end. SECURITY The direct impact of the GFC on the Security Products division was stronger price pressure on its encryption products and despite selling more units, delivered slightly lower margins on some products. This was, offset, to some extent, by higher margins achieved from sales of the company¡¦s newly released high-performance 10Gbps Ethernet and FibreChannel encryptors continued to deliver higher margins. There is evidence of substantial ongoing demand for these recently released product lines. The company commenced development of its Next Generation Encryption Security Platform; released a 10Gbps Ethernet encryptor capable of use in mesh network configuration; enhanced its storage area network Fibre Channel encryptor; and released a new low cost small footprint encryptor, CypherStream aimed at the midsized business and branch network market. Additionally Senetas committed significant resources to upgrading its critical Government certifications for CypherNet and CypherStream products, completing all work necessary for FIPS and Common Criteria EAL4+ accreditation across the entire product range. As well as winning new direct customers in Federal government departments and agencies, Senetas increased its avenues to market with the addition of two major resellers: TVS India, a $10 billion company and ItecPlace Technologies, a highly regarded IT organisation in South Korea. Senetas CEO John Du Bois said the company continued to work closely with its largest reseller, SafeNet, who manufacture CypherNet products in the USA under an OEM licence agreement. However this agreement was recently amended to allow SafeNet to sell the new CypherStream device, and have it manufactured for them by Senetas¡¦ contract manufacturer in Melbourne. Mr Du Bois said Senetas had completed an evaluation by the Australian Defence Signals Directorate of the suitability of the current CypherNet platform for use in High Assurance networks. He said the evaluation indicated that there was ¡§a modest engineering effort required for it to be adapted to meet High Assurance requirements¡¨. He said these efforts were underway and the company believed it would open markets for the device not only in Australia but in the restricted networks of close Australian allies. CONSULTING The Senetas Consulting division maintained revenues while lifting profit contribution, despite the most difficult consulting services environment experienced in many years. Mr Du Bois said it was due to the sheer hard work of Senetas staff and management that Consulting had not only held revenues, but delivered an improved contribution to $2.3 million, up 15.3 per cent on last year. ¡§Although we already had one of the highest utilisations of our consulting team in the industry, we managed to lift utilisation even higher, while holding costs down.¡¨ GENERAL Both sides of the company had participated in a range of targeted marketing activities to raise the corporate profile and create awareness of specific solutions in products and consulting services, produced newsletters, whitepapers and undertook speaking engagements at relevant events. With the introduction of the company¡¦s new website early in 2009, came a significant boost in visitor numbers to www.senetas.com. It not only provided the company with an improved marketing presence, but a detailed view of global visitor demographics. It also served as an important resource for resellers and partners. About Senetas: Senetas Corporation Limited (ASX Code: SEN) is an Australian ASX-listed company and is the world¡¦s leading developer and supplier of high speed network encryption hardware. Its products are accredited to the highest international government security standards, including FIPS 140-2 Level 3 and Common Criteria EAL4+. Customers include Government departments in the USA, Australia, the Middle East, Asia, and Europe as well as some of the world¡¦s leading financial institutions. For further information contact: Investor Relations Phone: 1300 787 795 | Email: [email protected]
SEN Price at posting:
3.7¢ Sentiment: Hold Disclosure: Held
