Senetas Corporation Announces Its Impairment To The Carrying Value Of Its Unlisted Investments

senetas corporation

Senetas Corporation Limited’s (ASX: SEN) stock tumbled 2.381 percent on 16 January 2019 after its anticipation on recognizing an impairment to the carrying value of its unlisted investments done in SAT (Smart Antenna Technologies Limited) for 1HFY19.

The company develops advanced encryption technologies, and it is a global leader in it. The main purpose of this is to protect data which is in a range of commercial, and defence applications.

In December 2016, Senetas Corporation Limited acquired 5.52 percent interest in Smart Antenna Technologies Limited. SAT’s major shareholder and primary financier have recommended that they are not interested in proceeding with additional funding although it was previously accepted by the SAT’s board due to some disagreements over future strategy with Smart Antenna Technologies Limited the shareholder has just dropped the idea. 

As an outcome of the meeting, the Board of SAT has agreed to put the business into the hands of administrators so that they can dispose of the company’s business and intellectual property.

Due to the uncertainty related to the underlying value of the investment in Smart Antenna Technologies Limited, now the Board of Senetas has decided to write down the balance sheet carrying value of SAT from $1.89 million to nil. A further update on this development will be provided with Senetas’s half-year results announcement in late February 2019.

On 21 December 2018, the company has disclosed to the market that one of its directors, Mr. Andrew R. Wilson who had a direct interest in the Company, had acquired 2,000,000 Options (Unlisted). The Director acquires these shares at no cost. Hence after this development, the number of securities held by the director are 187,500 performance rights (unlisted), 4,000,000 options (unlisted), 1,125,000 shares (quoted).

FY18 Financial Performance: The Company’s revenue for the year stood at $18,970,715 in FY18, (over the prior year which was $17,591,114). The increase in revenue was supported by the company’s global distribution partner Gemalto. The total comprehensive income for the year stood at $1,896,922 in FY18, (over the prior year which was $2,867,047). Gross profit margin came in at 81 percent in FY18. In FY18, the company has not declared any dividend for its shareholders.

On Balance Sheet front, Net Assets for the year stood at $23,551,680 in FY18, (over the prior year which was $21,483,107). As at 30 June 2018, the company had cash and cash equivalent of $23,258,056 (over the prior year which was $20,091,205).

Stock performance: The shares of Senetas Corporation Limited closed the day’s session at A$0.082 (16 January 2019), down by 2.381%. The market capitalization of the company stands at circa $90.83 Million with approximately 1.08 billion outstanding shares. In the time span of the previous six and three months, the stock delivered the returns of -24.38% and -8.46%, respectively. During the last one month, SEN delivered the negative return of 7.69%.


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