The Tesserent Ltd (ASX: TNT) share price is receiving some much-needed love today after falling some ~20% this year. This follows an increasing need for cybersecurity services amid mounting pressure from Chinese and Russian hackers attacking small and large businesses alike.
Tesserent share price lifts on strong earnings
The Tesserent share price is currently trading 6.12% higher at 26 cents after the company released its financial results for the half-year ended 31 December 2020 (H1 FY21) this morning. In earlier trade, Tesserent shares jumped by around 14% to an intraday high of 28 cents before retreating to their current level.
The company achieved $36.5 million in turnover which represents more than 500% growth on the prior corresponding period. This resulted in operational earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $2.9 million compared to the prior period’s loss of $1.7 million.
Tesserent has described this achievement as ‘transformational business growth’ resulting from strategic acquisitions and increased business unit cross-sales. In H1 FY21, Tesserent completed five acquisitions that have all made initial contributions to the group’s revenues during the half.
Outlook
According to Tesserent, the company’s relentless M&A activity has enhanced its value proposition for clients in what it calls Cyber 360 capabilities. Tesserent aims to deliver such capabilities to an increasing number of Australian organisations and drive organic revenue growth through the cross-selling of services. The company’s key focus markets include government, critical infrastructure and banking & finance.
Tesserent increased its cash at bank from $4 million to $8 million during the first half. It cites that it will continue to drive its acquisition strategy to expand on Cyber 360 capabilities and increase shareholder value through incremental earnings per share (EPS) growth.
The company is currently focused on the Australian market but has hinted at exploring international expansion opportunities with a focus on Australia’s key ‘Five Eyes’ allies, which consist of the United States, the United Kingdom, New Zealand, and Canada.
Tesserent’s growth momentum has given it the confidence to eye an ambitious target of $150 million turnover by June 30 2021.
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- The Tesserent (ASX:TNT) share price is sinking 20% on record revenue
Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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