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TNT - Tesserent Limited

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FY20 saw Tesserent become Australia’s #1 ASX-listed cybersecurity firm primarily as a result of several substantial acquisitions, a strategy led by TNT’s new Chairman, Geoff Lord, appointed in January 2020. Since this date, several important organisational changes and strategic acquisitions have led to exponential business growth, creating shareholder value in a number of key areas including a significant uplift in market capitalisation and share price. As a result of these acquisitions and organisational changes, significant upfront, one-off costs were incurred without the full-year financial benefits being recognised in the FY20 statutory accounts. The FY20 statutory results are therefore backward-looking and are not a current reflection of the Company’s current or go-forward financial position.

so, we have to wait and watch...

Including the new acquisitions, at the time of publishing this document, the Company:
 has an FY21 forward gross revenue run-rate of circa $80M
 is cash-flow positive; and,
 is operationally profitable on a month to month basis
 has an ambition to get gross revenue run-rate to in excess of $100M by December 2020.

The additional acquisitions are fully funded using the Company’s Pure Asset Management Debt Facility (announced 20 July 2020). In addition, the Company has in excess of $6M in further cash reserves.
Key Highlights
● FY20 Financial Objectives achieved:
○ $43.8M Revenue per annum run rate achieved in FY20
○ Achieved quarterly EBITDA profitability for the FY20 June quarter
○ Cash flow from operations positive during the FY20 June quarter
● Acquisitions:
○ Phase 1 Acquisitions Completed: - Rivium (completed FY20) - Pure Security (completed FY20) - North Security (completed FY20) - Seer Security (completed FY21)
○ Phase 2 Acquisitions Announced: - Airloom (SPA signed FY21) - Ludus Cybersecurity (SPA signed FY21)
● First Acquisition Integration milestones achieved, including:
○ First cross-sales achieved
○ Single Finance Platform, Oracle NetSuite, rolled out across the Group
○ Rivium and the Tesserent MSSP/SOC absorbed into Pure Security
 
Gross revenue run rate to $100M this calendar year! They're setting a track record of meeting or exceeding guidance. Even if they miss by a small amount, a run rate of $100M gross revenue in a company which currently has a market cap of around $170M looks very promising. Plus there is the inevitability of sector growth which will be ongoing for years.
 
TESSERENT ACQUIRES IQ3, A MAJOR PRIVATE CLOUD PROVIDER FOR SECURE DATA

- Secure Cloud Services provider with $25M turnover delivering sustainable EBITDA of $3M
- Significant synergy benefits and cross-sell opportunities
- TNT achieves $100M gross revenue annualised run rate well before December target
- Acquisition is immediately earnings, cash flow and EPS accretive
 
Tesserent Limited TNT announced acquisition of iQ3 for a cash deal including TNT shares @ 0.2496c (currently TNT is trading @ 0.23c).

- Secure Cloud Services provider with $25M turnover delivering sustainable EBITDA of $3M
- Significant synergy benefits and cross-sell opportunities
- TNT achieves $100M gross revenue annualised run rate well before December target
- Acquisition is immediately earnings, cash flow and EPS accretive

Strong revenue and earnings are expected to continue into FY21. Importantly, more than 70% of iQ3’s revenue comes from multiple recurring multi-year annuity-based contracts. The TNT Group now has
in excess of $30M annual recurring revenue from multiple locked-in multi-year contracts.

The consideration for the acquisition of iQ3 is a mix of cash and TNT shares, being $8.6M in cash and
34.6M shares issued at $0.2496 per share. The cash component is fully funded from existing cash reserves being $4.3M on completion and four deferred quarterly payments of $1.07M over a 12-month period.

Synergy Benefits and Opportunities

By introducing iQ3 into the Group, there are considerable Cyber 360 cross-sell and up-sell opportunities at a customer, geographic and solution level. Tesserent envisages significant sales opportunities for iQ3 Secure Cloud Services to existing TNT Group customers, whilst selling the Group’s core services to iQ3 customers in Australia and Singapore.

There are also notable benefits associated with iQ3’s ISO-certified Network Operations Centre (NOC) and TNT’s existing ISO-certified Security Operations Centre (SOC) in relation to the delivery of associated Cloud, Connectivity and new Managed Security Services capabilities.

In addition, the Company sees an immediate opportunity to leverage State and Federal Government
relationships and capabilities within the Group, particularly North, Seer, Ludus and iQ3.

Mr Humphreys commented; “Joining Tesserent is a natural strategic evolution for iQ3. The delivery of
cloud services is becoming more and more security-centric and we now have the ability to significantly
grow the business by providing our clients with that end-to-end secure cloud and cybersecurity solution they’re looking for”.

Julian Challingsworth, TNT’s CEO, commented; “The addition of Secure Cloud Services into our Cyber 360 strategy creates substantial opportunities, particularly as organisations transition to mobile and remote workforces as a result of COVID-19. We have already been providing tactical advice to our clients in this area, so enabling these services is a natural next-step for Tesserent.”

Mr Challingsworth added; “The models deployed by Cloud and Data Management firms like Megaport
who are realising multi-billion dollar market caps through the deployment of smart technology with
comparative annual recurring revenue to TNT are very interesting to us”.

https://www.marketindex.com.au/asx/tnt

Please DYOR .. Cheers tela
 
Favourable acquisition of iQ3 now brings onboard 24 NSW Government entities.

‘A natural next-step for Tesserent’

The company said the acquisition materially complemented its existing strategy and marked a significant step forward in its ability to provide a full end-to-end cyber service.

It also anticipates cross-sell and up-sell opportunities.

“The addition of Secure Cloud Services into our Cyber 360 strategy creates substantial opportunities, particularly as organisations transition to mobile and remote workforces as a result of COVID-19,” said CEO Julian Challingworth.

“We have already been providing tactical advice to our clients in this area so enabling these services is a natural next-step for Tesserent.”
 
Cyber Security solutions provider, Tesserent Ltd (TNT) is expected to see strong demand for its products and services, from both its enterprise and government clients.

This is a result of increasing attacks from sophisticated State-basedActors and other malicious parties, including Hacktivists and Cybercriminals.

The company's Cyber 360 acquisition strategy, has boosted its annual revenue run rate to $80m and expanded capabilities, making it the largest ASX-listed Cyber Security provider and a one-stop-shop for Cyber Security solutions, with Tesserent targeting a run rate of $100m in revenue by the end of FY21.

Having acquired 6 Cyber security providers, sales and earnings growth potential from unlocking synergies is significant.

Numerous additional acquisition opportunities also provide Tesserent with strong prospects for accelerated revenue growth. We initiate with a BUY recommendation on Tesserent Ltd (TNT) with a 12-month target price of $0.40 per share (54% upside on Thursday's close).

Initiation Report attached.
Tesserent (TNT)-Initiation Report-CurranCo.pdf
 
Tesserent Ltd TNT forms bullish "Continuation Wedge" chart pattern
Sep 24, 2020

Trading Central has detected a "Continuation Wedge (Bullish)" chart pattern formed on Tesserent Ltd (TNT:ASX).

This bullish signal indicates that the stock price may rise from the close of 0.23 to the range of 0.30 - 0.32.

The pattern formed over 16 days which is roughly the period of time in which the target price range may be achieved, according to standard principles of technical analysis.
 
06/08/20
The Australian Government is investing $1.67 Billion in its 2020 cyber security strategy which it says will protect and strengthen the security and resilience of Australia’s critical infrastructure, and ensure law enforcement agencies have the powers and technical capabilities to detect, target, investigate and disrupt cyber crime – including on the dark Web.

https://www.itwire.com/security/aus...ew-$1-67-billion-cyber-security-strategy.html

The integration of the recent acquisitions by Tesserent TNT to capitalise on operational synergies and streamline sales and deliveries will underpin the company's earnings growth.

Tesserent will then focus on capturing further market share in three key sectors: government (including defence), critical infrastructure and banking & finance.

If acquisitions and growth can continue at a sustainable pace, the company seems well set on its way to cementing its place as the number one end-to-end, pure cybersecurity firm on the asx.
 
TNT nice green candle today.. tesserent website makes reference to another quality 'positive cash flow' acquisition in the near term pipeline schedule so announcement could come any day now imo
 
Full Year Accounts Highlights:
- $105M rev run rate achieved (ahead of schedule)
- $8.8M EBITDA inc notional full year from acquisitions
- Revenue coming from 60% Government, 25% Enterprise and 15% Critical Infrastructure
- Nice chart showing the breakdown of products and services sold.
- The exploration of international partnerships with USA, UK, Canada and NZ (i.e Five Eyes Allies).
- Ambitions to get revenue to $150M+ by June 2021 (that is progressing well on track already)
- Cashflow positive for the first time in the company's history in June.
- $11M in new MSS deals for FY19
- Will continue to acquire businesses that compliment TNT. I hope that will include a DFIR capability, especially one based in ACT.
- An office in Singapore could prove quite strategic for eventual sell-off.
- Complete financial integration onto Oracle NetSuite. Great for accurate reporting and customer perceptions (i.e. less complexity). And as the report states, ability to integrate new businesses quickly and easily and lower transaction costs.

Seriously impressive progress by Tesserent in only these past 9 months (especially given Covid-19) so next 4C report due in 3-4 week's time should be a beauty.

Cheers tela
 
TNT @ 0.235c +6.82% on massive line wipes @ 0.225c/0.23c here we go! happy day's ahead
 
TNT is continuing to chalk up milestones, delivering/exceeding on guidance and setting attractive future goals. Unfortunately I was busy and missed tipping TNT for October (I would have currently been in second place if I had) but as a very happy holder seeing the price go from 22c to today's close of 35.5c I'm not hurting too much! I topped up early in the month at 22c on the brief dip when Trump was diagnosed with a mild fever, which turned out to be a lovely move.

Revenue run rate now over $100 million and climbing
Many more aquisitions than expected with two more expected to be announced soon. TNT has indicated that they will be earning accreditive.
The quarterly due out in a few days should be excellent, it'll give them a good opportunity to articulate all the recent positive developments and give us an updated figure of the revenue run rate. Some of the recent developments and goals/company vision were outlined in a recent online conference, which probably contributed somewhat to the splendid rally over the last four sessions (which followed another recent rally) and I expect the market will react further when this and more is put into the quarterly.
Once synergies between the acquired companies are demonstrated, I'm sure the market will really love it, but that probably won't be demonstrated well until mid to late next year. Having said that, there's plenty which the market will love before then. This is definitely a company worth a close look.
 
If anyone is interested, here's a video uploaded from the investor conference a few days ago. TNT CEO Julian Callingsworth discusses various aspects of the business and answers some questions.

 
Today we see yet another fresh all time high for TNT! That's four days in a row! Very happy holder here!
 
Sdajii said:
Today we see yet another fresh all time high for TNT! That's four days in a row! Very happy holder here!
Click to expand...
yep, it is doing really well:
1. New Federal, State and Local Government contract wins across the Group in excess of $6M in the September quarter
2. The Group retained 100% of existing Federal Government clients with most contracts extended through to the end of the calendar year and beyond
3. Significant enterprise contract wins in aggregate in excess of $4M in the month of September with large Financial Services, Insurance, Advertising and Media organisations
4. Continued growth of the firm’s annual recurring revenue streams from new and existing locked-in annuity contracts now in excess of $30M per annum

And I can see why they are establishing in Canberra, big time (from AR9 Quarterly):
During the quarter, the Australian Government committed to the following funding initiatives to mitigate the growing threat to Information and Cyber Security:
• $270b of funding to Department of Defence, including $15b over the next decade to cyber and information welfare capabilities; and,
• $1.67b over the next decade to Australia’s Cyber Security strategy.
 
Watching this for a pullback. I'm in if we get one.
 

I haven't read the AR9 quarterly, but have been following how much federal funding is being put into cybersecurity, and wondering exactly how it'll affect TNT. I'm really not sure. It's clearly a huge growth sector and with TNT being the biggest player on the ASX it's something worth looking at.

I've watched AR9 and compared it to TNT over the last few months. They've largely moved together, AR9 was outperforming TNT for a while (which seemed odd) but TNT has pulled ahead recently, especially with the huge rally this week and last.
 
over9k said:
Watching this for a pullback. I'm in if we get one.
Click to expand...

I've sold out and bought back in on pullbacks a few times (and made errors and quickly bought back in for a bit more a couple of times too). Most recently I topped up on the pullback to 22c about two weeks ago (I might have mentioned that a few posts ago?), which was perfect timing.

You might get lucky on this one; there will be a pullback at some stage, it might be tomorrow to 32c or it might be in a couple of weeks from 48c back to 42. I have pretty high expectations for TNT through 2021. Being the biggest cybersecurity player on the ASX in a massive growth sector, while undergoing company-specific organic and rapid acquisitional growth is very compelling.
 
I have an order in for 0.03, 0.001 above the previous peak of 0.029. Fingers crossed!
 
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