Senetas swings to $5.6m loss

Senetas swings to $5.6m loss

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 a wider-than expected $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% to $11.3 million. Senetas said sales at its product division fell 20%, in a result partly attributed to the depressed trading conditions in Europe and the USA.

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

IT consulting revenue meanwhile fell 36%, 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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