Melbourne-based network encryption vendor, Senetas, has recorded strong product revenues for the financial year ending June 30, but its consulting sales business suffered a setback.
In a statement to the ASX, Senetas achieved $1.03 million in profit before tax and product sales revenue increased 23 per cent year-on-year.
The consulting division secured new business, but the loss of its Telstra contract impacted revenues. At the time, Senetas said the deal would have added $3 million to its division’s revenue.
“The consulting division continues to face market challenges with the loss of the Telstra contract, however, it has commenced efforts to diversify its customer base and partner relationships,” the statement said.
It is on the acquisition hunt to boost its consulting practice and wants to add Novell consultants to its team.
One of its most significant developments during the year was the collaboration between its consulting and security divisions resulting in producing its first solution to the market called MonitorStream. It was developed in-house using IBM Tivoli and Microsoft solutions.
According to the statement, its security products division had recorded its best year in domestic sales, mostly due to government agencies and its enhanced manufacturing capability, which allowed it to produce higher volumes more efficiently.
Senetas claims it also had to absorb one-off redundancy costs of $270,000 and blamed the overall impact of the results on the global financial crisis (GFC) and discounting due to competition in a contracted market.
“Senetas continued its focus on cost containment, yet still maintained its commitment to research and development, releasing a number of new products and improving functionality of existing encryption technology,” the statement said.
It is debt free and has reported a 30 per cent increase in its cash reserves for FY10.
“The outlook for 2011 is relatively good with signs of emerging recovery in several regions,” the statement said. “If the world economy does pick up through the year, we can expect broadly based growth in sales and profitability.”