Senetas swings to $1.5m 1H loss

IT security company Senetas (ASX:SEN) reported a 1H loss of $1.5m, as a result of the loss of a Telstra (ASX:TLS) contract and project delays

Data security company Senetas (ASX:SEN) swung to a 1H loss of $1.5 million, as it felt the full effect of the loss of a significant contract.

The company said revenue fell 28 per cent to $5.9 million, which was $1.2 million lower than it would have been if Telstra (ASX:TLS) hadn't cancelled a consulting contract in favour of an offshore outsourcer last June.

Delays in some major projects, continuing poor economic conditions in Europe and the USA and forex losses of $235,000 were also blamed for the result.

Despite the revenue decline, the company achieved its sales targets for the period – but this was ensured through the sale of a larger number of lower-speed encryptors to offshore markets.

The company is now forecasting something between a loss of $500,000 and a profit of $500,000 for the whole of FY11.

But directors said the company had a strong sales pipeline, and is anticipating an upsurge in the global data protection market soon.

If Australia introduces privacy breach legislation similar to those adopted in a number of these markets, even more sales could be stimulated, the company said.

SEN shares were flat on Thursday at $0.026.

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