Senetas issues profit warning

Senetas issues profit warning

ASX listed network encryption vendor is expecting to suffer a $1.5 million pre-tax profit loss for the first half of the financial year

ASX-listed network encryption provider, Senetas, (ASX:SEN) has indicated its half year result to December 31, could suffer a $1.5 million pre-tax loss and breakeven.

The company indicated it had a strong pipeline of sales opportunities, but many of the larger opportunities sat within Government and Defence agencies, which are undertaking significant expenditure reviews. This has resulted in project delays and reductions.

“These trading conditions make the prediction of transaction timing and size difficult and subject to volatility,” Senetas said in a statement to the ASX. “The outlook for 2011 is relatively good with signs of emerging recovery in several regions. As economic recovery takes place, the company expects many of these delayed projects to be brought back on line as cyber security concerns remain at the forefront of critical issues facing governments and organisations around the world.”

For FY10 the vendor reported strong product revenues, achieving $1.03 million in pre tax profit. However, its consulting division suffered a setback, particularly with the loss of the Telstra contract, which the company believed would have added $3 million to the division’s revenue.

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