The Senetas Corporation Limited (ASX: SEN) share price is on the run today following the release of its preliminary results and an update on its Votiro investment.
At the time of writing, shares in the developer of encryption security solutions are up 12.2% to 6.4 cents.
Senetas performance update
In today's release, the company delivered a robust result for the first half of the 2021 financial calendar.
For the period ending 31 December, subject to auditor review, Senetas achieved revenue growth of $12.5 million to $12.8 million. This reflects an increase of more than 30% on the prior corresponding period (pcp). The company highlighted strong sales of its 100Gbps encryptors, and growing market presence in the Middle East and Europe as key drivers of the result.
Senatas forecasts total group revenue to come in around $14 million to $14.4 million. This includes its interest in Israeli cybersecurity firm, Votiro, and represents a lift more than 30% on the first half FY20 period.
The company projects underlying earnings before interest, tax, depreciation and amortisation (EBITDA) to be in the range of $3.8 million to $4 million, up more than 170% on the same time last year.
Total group EBITDA, including Votiro, is predicted to stand at $1.3 million to $1.4 million. Consolidated group net profit after tax (NPAT) for H1 FY21 is estimated to be $0.2 million.
The company will release its final half-year results along with an update on its outlook on 26 February.
How is Votiro tracking?
After investing $8 million in Votiro during late 2018, Senetas is starting to reap the benefits.
Currently, the Israeli firm is conducting trials with a number of large north American organisations to supply its cybersecurity technology. The global leader is well-recognised for protecting government and businesses from malware and ransomware attacks.
In addition, a Fortune 500 company has selected Votiro's secure file gateway to be deployed. The unnamed customer will use the technology to protect its 50,000 users from malware intrusions. It's estimated that the contract is valued roughly US$250,000 per year over a 3-year term.
Management commentary
Senetas chair Francis Galbally welcomed the update, saying:
The demand for software protection against such threats is now only starting to emerge and Senetas believes this growth will be considerable and will translate into an opportunity to grow a substantial annuity business
The board is pleased that Votiro is achieving the expected results and growth that it targeted when we made our initial investment.
Senetas share price summary
The Senetas share price has stayed relatively flat over the course of the past 12 months, down 4%. Its shares have been up and down through the year, falling to a multi-year low of 3.8 cents, and rising to 7.9 cents.
Based on the current share price, Senetas has a market capitalisation of $67 million.
