SEN - Senetas Corporation

[johnno261]

Re: Senetas (SEN)

Hi Johnno

Have you done any homework on what senetas yrl net profit increases are likely to be over the next 3-5 yrs?

As the Company stated, they are expecting ann. profits to be $250mill within 3 years. As for trying to ascertain what the profit increases are likely to be over the next few years, well it is very much up in the air. Galbally stated that contracts will be "LUMPY". In other words may have a huge first half of each fin. year and minimal contracts for the remainding 6 months!!! or vice versa!!
You got to remember that this product is not an everyday requirement, however having said that, Businesses wordwide are realising that Corporate Data etc. needs to be very secure!!!!

 

[TheAnalyst]

Re: Senetas (SEN)

As the Company stated, they are expecting ann. profits to be $250mill within 3 years. As for trying to ascertain what the profit increases are likely to be over the next few years, well it is very much up in the air. Galbally stated that contracts will be "LUMPY". In other words may have a huge first half of each fin. year and minimal contracts for the remainding 6 months!!! or vice versa!!
You got to remember that this product is not an everyday requirement, however having said that, Businesses wordwide are realising that Corporate Data etc. needs to be very secure!!!!

Is that $250mil net profit or before EBITDA, EBIT?

Do Senetas have any competitors or any emerging competitors?

Also taken into account that it would be highly unlikely for an organisation to change providers once Senetas has established themselves with the customer

 

[johnno261]

Re: Senetas (SEN)

Is that $250mil net profit or before EBITDA, EBIT?

Do Senetas have any competitors or any emerging competitors?

Also taken into account that it would be highly unlikely for an organisation to change providers once Senetas has established themselves with the customer

I, yes yes your last paragraph. You are correct and this is what makes this stock even stronger in terms of loyalty sales

 

[123enen]

Re: Senetas (SEN)

Is that $250mil net profit or before EBITDA, EBIT?

From my reading and understanding of Senetas announcements the $250 Million is actually world wide sales of security encryptor products.
They are hoping to increase world wide sales from $28 Million now to $250 Million in 3 years.

Total world wide sales of security products in 2005 financial year was $28 Million

But total worldwide sales is a little misleading. This is not necessarily Senetas sales/revenue, as a lot of Senetas’ product is sold by agents, particularly SafeNet in the USA. Of the total worldwide sales of $28 Million:
- $22 Million was sold by international agents. Sanetas royalties (revenue) for this was $7.6 million.
- $6 million was sold by Senetas within Australia/NZ.

This makes Senetas revenue from security product $13.6 Million ($7.6M + $6M)
So, in 2005, Sentas revenue was around 48% of world wide sales of $28 Million.

refer to AGM address dated 27/10/2005.
I could not copy the ASX link here sorry.

This is cool- my first post. Great forum, discovered it about 1 week ago.

 

[crackaton]

URL WMT

Anyone know much about these? I believe WMT have re listed after voluntary administration. From memory they had some decent assets and operations - is this still the case?

 

[johnno261]

Re: Senetas (SEN)

From my reading and understanding of Senetas announcements the $250 Million is actually world wide sales of security encryptor products.
They are hoping to increase world wide sales from $28 Million now to $250 Million in 3 years.

Total world wide sales of security products in 2005 financial year was $28 Million

But total worldwide sales is a little misleading. This is not necessarily Senetas sales/revenue, as a lot of Senetas’ product is sold by agents, particularly SafeNet in the USA. Of the total worldwide sales of $28 Million:
- $22 Million was sold by international agents. Sanetas royalties (revenue) for this was $7.6 million.
- $6 million was sold by Senetas within Australia/NZ.

This makes Senetas revenue from security product $13.6 Million ($7.6M + $6M)
So, in 2005, Sentas revenue was around 48% of world wide sales of $28 Million.

refer to AGM address dated 27/10/2005.
I could not copy the ASX link here sorry.

This is cool- my first post. Great forum, discovered it about 1 week ago.

123enen I understand your line of thought regarding the Royalty money, however ther are some variants that must be taken into account, the first is that Mid December a new target price was put on SFNT being $48.00 which is more than 50% above the current trading price of $31.00. The reason for this is aggressive sales program for the near future based on what is worldwide demand for secure transmissions. Now because of this it is very hard to ascertain what value of that will be SONET based Sales and even they themselves could not answer that question!!!
Thanks for your post 123 as these are all question that need to be considered when purchasing a stock.

 

[TheAnalyst]

i have some concerns about this stock

 

[Julia]

i have some concerns about this stock

Hello Analyst:

How about expanding on your above particularly cryptic comment?
What are your concerns?

Julia

 

[123enen]

I think Senetas has thrived on a recent run of news/announcements. Things are quiet now.

Also I think it is almost fully and fairly priced for the expectations people have of it over the next few months. Think, at best, it will range between 75c and 80c until some good strong news comes forward. If there is no news for a while the short termers will get bored and sell out.

 

[TheAnalyst]

Hello Analyst:

How about expanding on your above particularly cryptic comment?
What are your concerns?

Julia

It's not so much maybe the short term its the medium to long term and there are comparable products now in the market...I know of people in the industry and have been doing some low to ground research and will be speaking to an IT engineer on friday as my IT sales manager mate is hooking me up to chat about it and a I know some other sh*t as well

 

[123enen]

its not so much maybe the short term its the medium to long term and there are comparable products now in the market

SEN is about 12 to 15 months ahead of the competition technically.
Sales volume for security product will definitely increase but SEN are preparing themselves mentally for tougher competition and know that in time competitive market costings will force them to reduce the royalties they collect from safenet.

Still good for a few years and even longer if ther continue to release ground breaking equipment.

 

[TheAnalyst]

SEN is about 12 to 15 months ahead of the competition technically.
Sales volume for security product will definitely increase but SEN are preparing themselves mentally for tougher competition and know that in time competitive market costings will force them to reduce the royalties they collect from safenet.

Still good for a few years and even longer if ther continue to release ground breaking equipment.

I am sure some very big government organisations including the RBA did not use Senetas and this is what concerns me and it was the names of them that also concerned me and the competition is a USA unlisted company i have just forgot the name of them but i will have it again tommorrow and will definitely post it as i only like to raise stuff which i have checked out as well. Also Ageas analyst report on the Senetas site had a target price of 75 cents in 2004 as a true valuation.

 

[TheAnalyst]

The name of the organisation is Neoscale Inc and the product is Cryptostore and the Australian representative is Dean Frye 0418 546 635 and the RBA used them and not even its own Aussie Senetas....thts concerning....

 

[Julia]

The January 2006 issue of "Smart Investor" included SEN in an article entitled "The Smart Set" - clever companies.

Others described in this article ate Objective Corp, Westfield Group, Iress Market Technology, Cochlear and Billabong.

Amongst the comments in the article are such as :"Senetas's CTAM product range protects critical data in high speed networks for the likes of the US Defence Department, The Australian Federal Police and the Australian Taxation Office"
.......
" In addition, Senetas has an IT solutions arm that is implementing the nation's largest business intelligence project for Telstra, involving a prodigious 44 terabytes of data across a multitude of disparate systems. Senetas Solutions has a 15 year operating history and its other major customers include National Australia Bank, ANZ Bank, Visy Industries and Shell Australia.

So confident is Senetas in the outlook for its growth from the encryption side of its business that it recently declared its objective was to increase product sales from last year's $28 million to an astonishing $250 million within the next three years."


"Smart Investor" is not known for publishing baseless favourable reviews.

Julia

 

[TheAnalyst]

Thx Julia

But the question is; were smart investor aware of Neoscale? and yes fair enough Senetas has confidently forecasted the increase in sales over 3 years not just one year.

Believe me i am not against Senetas and if you remember my earlier post i said medium to long term. Also sales is gross receipts the next step is to deduct cost of goods sold (COGS) which gives Gross profit. Next deduct operating expenses which consist of selling expenses, administration expenses and then financial expenses which when totaled is total operating expenses and the net profit before tax and before this we have EBITDA, EBIT.

So its ok to say sales will be $250 mill but how much will be net profit after fighting the competitors

 

[TheAnalyst]

They did during the dot.com era

The January 2006 issue of "Smart Investor" included SEN in an article entitled "The Smart Set" - clever companies.

Others described in this article ate Objective Corp, Westfield Group, Iress Market Technology, Cochlear and Billabong.

Amongst the comments in the article are such as :"Senetas's CTAM product range protects critical data in high speed networks for the likes of the US Defence Department, The Australian Federal Police and the Australian Taxation Office"
.......
" In addition, Senetas has an IT solutions arm that is implementing the nation's largest business intelligence project for Telstra, involving a prodigious 44 terabytes of data across a multitude of disparate systems. Senetas Solutions has a 15 year operating history and its other major customers include National Australia Bank, ANZ Bank, Visy Industries and Shell Australia.

So confident is Senetas in the outlook for its growth from the encryption side of its business that it recently declared its objective was to increase product sales from last year's $28 million to an astonishing $250 million within the next three years."


"Smart Investor" is not known for publishing baseless favourable reviews.

Julia

 

[TheAnalyst]

" In addition, Senetas has an IT solutions arm that is implementing the nation's largest business intelligence project for Telstra, involving a prodigious 44 terabytes of data across a multitude of disparate systems. Senetas Solutions has a 15 year operating history and its other major customers include National Australia Bank, ANZ Bank, Visy Industries and Shell Australia.

Hi Julia were these customers quoted in the magazine article??

 

[Julia]

" In addition, Senetas has an IT solutions arm that is implementing the nation's largest business intelligence project for Telstra, involving a prodigious 44 terabytes of data across a multitude of disparate systems. Senetas Solutions has a 15 year operating history and its other major customers include National Australia Bank, ANZ Bank, Visy Industries and Shell Australia.

Hi Julia were these customers quoted in the magazine article??

Hello Analyst

Not sure what you mean?

The whole of the first paragraph , i.e. "In addition,........ through to .....Shell Australia" was quoted directly from the magazine article.

Julia

 

[Freddy]

After their report on drop of earnings for Q4, what is the consensus for this stock now? It also appears that they are expecting to turnover $250mill at end of three years from the recent press release.

 

[Odysseus]

It is very possible that this is a company which truly CAN deliver exceptional growth. However, as this whole discussion shows, people are more than aware of its potential, and expectations are so high that the stock price will take a real beating if some substantial disappointment occurs, or is felt to occur. It is, in many ways, an "improbable" stock. No good portfolio would include this as a major holding, though it might be worth including in a small way for its very real potential, and the momentum which it has on the whole sustained.