Senetas swings to $5.6m loss

Network encryption vendor Senetas (ASX:SEN) saw its revenue shrink 27.5 per cent in FY11, but said new products and opportunities should improve sales in the coming year

Network encryption hardware developer Senetas (ASX:SEN) swung to a $5.6 million net loss in FY11, as economic woes and project delays ate into revenue.

The company's pre-tax loss was wider than expected at $5.3 million, due to a $2 million goodwill writedown on intangible assets relating to its consulting business.

Senetas had been forecasting a pre-tax loss of between $3 million and $4 million before it decided to take the write-off.

Revenue slumped 27.5 per cent to $11.3 million. Senetas said sales at its product division fell 20 per cent, in a result partly attributed to the depressed trading conditions in Europe and the USA.

International sales opportunities currently account for around 55 per cent of the company's total pipeline.

IT consulting revenue meanwhile fell 36 per cent, as a result of the loss of a large-term Telstra contract and delays in other consulting work.

But Senetas expects consulting revenue to pick up in FY12, noting it had won new business including a three-year appointment to the Victorian Government's e-services panel.

Product sales in Australia and New Zealand are also expected to improve in 2012 and 2013 due to the adoption of a channel partner business model, and the introduction of new product lines including its Cloud-based network encryption solution.

SEN shares stayed flat on Thursday at $0.023.

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