Tesserent turnover increases 500% to $36.5 million


Australia’s largest listed cybersecurity company, Tesserent Limited (ASX:TNT) has released its half yearly report with turnover increasing by 500% on last year to $36.5 million and a net asset increase from $16.5 million to $65 million.

Turnover increases YoY by 500% to $36.5M Operational EBITDA increases by $4.6M to $2.9M Net assets increase from $16.5M to $65M Cash at bank increases from $4M to $8M

Key Highlights for H1 FY21

  • Financial achievements:

○  $36.5M Turnover1 achieved (in excess of 500% growth on same period last FY)

○  $2.9M Operational EBITDA3 achieved against a prior period loss of $1.7M

  • Acquisitions:

○  Seer Security (completed August 2020)

○  Airloom (completed September 2020)

○  Ludus Cybersecurity (completed September 2020)

○  iQ3 (completed November 2020)

○  Lateral Security NZ (completed February 2021)

  • Joint Ventures:

○ Optic TNT Security Pty. Ltd. JV with NZ-based Secure Optic (announced November 2020)

  • Listed on ASX All Tech Index (S&P/ASX All Technology Index)
  • Entered NZ market with acquisition of Lateral Security

The H2 FY21 Results will benefit from:

  • The inclusion of 5 months results from Lateral Security which completed in February 21
  • The inclusion of the full 6 months revenue and earnings for the following acquisitions :
  • Seer Security (5 months in H1 results)
  • Airloom (4 months in H1 results)
  • Ludus Cybersecurity (4 months in H1 results)
  • iQ3 (2 months in H1 results)
  • Strong organic growth with significant uplift across our Government projects.

Explanation of Results

H1 FY21 saw Tesserent achieve transformational business growth, resulting from strategic acquisitions and increased business unit cross-sales which created shareholder value in a number of key areas including a significant uplift in market capitalisation and share price.

Whilst the Company’s comparative YoY revenue and earnings is strong, the H1 FY21 statutory results are still backward-looking and are not a current reflection of the Company’s current or go-forward financial position.

As a result of these aforementioned acquisitions, significant upfront (one-off) costs were incurred without the full half-year financial benefits (Figure 3) being recognised in the H1 FY21 statutory accounts (Figure 1). The Company’s Employee Share Option Plan (ESOP) which is a significant way to attract and maintain a highly skilled workforce in a competitive market and provides tax benefits was another expense recognised in the statutory accounts.

The items highlighted and subtotalled above $7,966,000 include $5,364,000 (67%) that were noncash payment.

Future Focus:

Tesserent, through its Cyber 360 strategy, continues to focus on building out a one-stop-shop that provides a complete end-to-end cybersecurity solution for its clients. A primary objective is to maximise shareholder value by increasing earnings margins through the growth of high-margin annuity-based income and the inclusion of proprietary intellectual property in its solutions.

The Company’s previously stated goals for FY21 remain:

  • Deliver our Cyber 360 capabilities to an increasing number of Australian organisations
  • Integrate acquisitions to maximise synergy efficiencies and drive organic revenue growth through cross-selling
  • Focus on capturing market share in three key markets: Government (including Defence), Critical Infrastructure and Banking & Finance
  • Continuing to drive the Company’s acquisition strategy to expand on Cyber 360 capabilities and increase shareholder value through incremental EPS growth
  • Building out high-value recurring annuity revenue streams
  • Expand proprietary intellectual property to drive high-margin product and service offerings
  • Explore International expansion opportunities with a focus on Australia’s key Five Eyes allies, which consists of the USA, UK, NZ and Canada