Highlights

  • FY26 Revenue increased 4.7% to A$20.2 million, or 9.3% higher at constant currency, with product sales up 22%.
  • Operating cash flow swung to a A$4.4 million inflow, leaving A$18.6 million in cash at 30 June 2026.
  • Senetas values its indirect Menlo Security interest, held through VGM, at about A$21.0 million after the Votiro sale.
  • Management expects FY27 Operating Revenue to grow broadly in line with FY26, with gross margins near historic levels.

Shareholders in Senetas Corporation (ASX:SEN) now have tax clarity on the encryption specialist's Capital management programme. On 7 October 2026, the company advised that the Australian Taxation Office had ruled two recent cash distributions to be returns of capital rather than dividends.

The ruling covers about A$5.5 million in total: a payment made in November 2025, equal to about 12 cents per share after a 100-for-1 share consolidation, and a A$0.2111 per share return paid on 7 August 2026 following Shareholder approval at a July extraordinary general meeting. For Australian-resident holders on capital account, the amounts generally reduce the cost base of their shares.

Thales Inventory Build Lifts Sales but Trims Margins

Senetas reported revenue of A$20.17 million for FY26, the year to 30 June 2026, up from A$19.25 million. Almost 90% of revenue is earned in US dollars. Gross Margin eased to 82% from 87% as global distribution partner Thales built inventory to support its FY27 pipeline, and maintenance revenue was softer due to contract renewal timing.

Continuing operations recorded a loss after tax of A$825,000, which included a A$0.9 million foreign exchange loss on Votiro sale proceeds, while profit attributable to members was A$429,000. Underlying operating EBITDA for the encryption Business was A$1.24 million. Regionally, EMEA revenue rose 22% and ANZ revenue climbed 17%, and the company booked its first revenue from South America.

Menlo Stake Anchors the Balance Sheet

Following the sale of Votiro to Menlo Security, Senetas holds an indirect interest of about 1.6% in Menlo through its VGM Investment vehicle. Its Equity and Loan in VGM are valued at A$21.0 million, and VGM's US dollar investment value rose 6% to US$21.4 million in the six months to June 2026. Chief executive Andrew Wilson expects a Menlo Liquidity transaction within 12 to 24 months, although none has been announced.

Net Assets stood at A$44.3 million at 30 June 2026, and the operating business carries no debt. The A$3.5 million August return was paid after balance date.

FY27 Plans and the 13 November Meeting

Management expects FY27 operating revenue to grow broadly in line with FY26, with possible upside from Asian markets nearing first sales, North American government and defence opportunities, further Middle East orders and later South American project phases. R&D spending is expected to rise by A$1.0 million to A$1.5 million as Senetas develops 10Gbps and 100Gbps encryptors, sovereign and post-quantum capabilities, and its early-stage Governed Data Layer AI governance platform, which is not expected to generate near-term revenue.

The virtual AGM is scheduled for 13 November 2026. Shareholders will vote on re-electing Chris Fedde and Philip Schofield, the remuneration report, employee share plan issues, CEO Options and early vesting benefits, and a 10% Placement facility.

Shares were unchanged at A$2.20 on 2 November 2026, with a Market Capitalisation of A$36.47 million and a 21.43% fall over 12 months.