Half Year Financial Report – 30 Sep 2017

Enprise Group Limited (ENS)

The Board of Enprise Group are pleased to report another excellent result for the 6 months to 30 September
2017 both from an operational and a strategic viewpoint.

Net Profit $393,000 (2016 : 323,000) up 21.67%
Cash $265,000 (2016 : 627,000) down 57.74%
Interest bearing loan $431,000 (2016 : Nil)

Revenue from continuing operations $4,787,000 (2016 : $4,336,000) up 10.40%, Australian revenue grew 17%
and New Zealand grew 9%.

Cash and existing debt facilities were used to fund the $1M cash component of the Kilimanjaro acquisition, with
the balance funded with the issue of 1,560,000 new shares in Enprise Group.

Following the recent acquisition of 47% of Kilimanjaro Consulting Pty Limited (Kilimanjaro), the largest Enprise
equivalent MYOB partner in Australia, Enprise had 8,526,645 shares on issue at 30 September 2017. At the
price we conducted the rights issue at ($1.39 per share) the market capitalisation of Enprise at 30 September
2017 was $11.85 million.

Set out below are the components that now make up the Enprise Group:

Business Unit Holding % Holding Valuation Valuation Method
Kilimanjaro Consulting Pty Ltd 5,479 Shares 47.03% $3.17 M Cost
Datagate Innovation Ltd 1,708,333 Shares 43.91% $2.56 M Latest raise at $1.50 per share
Zhik Pty Ltd 71,077 Shares 0.69% $0.10 M Latest raise at $1.30 per share
Enprise Solutions Ltd 100.00% $6.02 M Balance, including tax benefit
$11.85 M


It is the intent of the board to continue to invest in growth, either in the traditional MYOB channel or in businesses
with similar characteristics to our existing activities.


Elliot Cooper
Chief Executive Officer

---

ENPRISE GROUP LIMITED
HALF YEAR REPORT
FOR THE HALF YEAR ENDED 30 SEPTEMBER 2017

PAGE
1


Contents





Directors’ Report 2-3

Interim Consolidated Statement of Financial Position 4-5

Interim Consolidated Statement of Comprehensive Income 6

Interim Consolidated Cash Flow Statement 7

Interim Consolidated Statement of Changes in Equity 8

Notes to the Financial Statements 9-14

Directors’ Declaration 15

Corporate Information 16

PAGE
2



Directors’ Report


The Directors submit their Report on Enprise Group Limited for the half year ended 30 September 2017.

Directors

The following persons were Directors of Enprise Group Limited during the whole of the half year and up to
the date of this Report:

Lindsay John Phillips Chairman
George Elliot Cooper Chief Executive Officer
Nicholas James Paul Non-Executive Director


Highlights

Enprise Group Limited (Enprise) currently has one operating division; Enprise Solutions is a solution
provider for MYOB Enterprise software in Australia and New Zealand.

Enprise has a joint venture, Datagate Innovation Limited (Datagate), an early stage business that
provides online reporting and billing portals under Software-as-a-Service (SaaS) model for resellers of
Telco/Utility services and hosted service providers.

Enprise purchased 47.03% of Kilimanjaro Consulting Pty Ltd (Kilimanjaro), its largest competitor in
Australia, on 29 September 2017. The shareholders of Kilmanjaro have been granted a right to “Put”
their remaining 52.97% holding in Kilimanjaro to Enprise from 1 September 2019 until 31 August 2020 in
return for 2,854,649 fully paid Enprise shares.
___________________________________________________________________________________

 Net Profit for the period up 22% to $393,000 (2016 $323,000).
___________________________________________________________________________________

 Cash and bank balances of $265,000 (2016 $627,000) at period end.
___________________________________________________________________________________

 Subsequent Events

There are no material events after reporting date.

___________________________________________________________________________________

PAGE
3







Revenue Half Year Half Year Increase/
Sep-17 Sep-16 (Decrease)
$NZ ’000 $NZ ’000 %
Continuing Operations

Software and Licenses 2,351 2,181 8%
Services and Support 2,405 2,118 14%
Other Income 31 37 (16%)
4,787 4,336 10%
Discontinued Operations - -
Total Revenue 4,787 4,336



Lindsay Phillips
Chairman
28 November 2017

PAGE
4


Interim Consolidated Statement of Financial Position
As at 30 September 2017

Note Unaudited Unaudited Audited


30 September
2017
30 September
2016
31 March
2017


NZ $’000 NZ $’000 NZ $’000

ASSETS


Current Assets


Cash and cash equivalents 8 265 627 598
Trade and other receivables

1,142 942 1,225
Related party receivables

79 - 7
Work In Progress

52 - -
Other receivables - 88 57
Term deposit 154 154 154
Staff receivables 4 7 8
Total Current Assets

1,696 1,818 2,049





Non-current Assets



Investments:
Datagate Limited (43.9%) Joint Venture



1,044

1,213

1,237
Kilimanjaro Consulting Pty Limited (47.0%)

3,168 - -
Zhik Pty Limited (0.7%) 98 - -
Property, plant and equipment 6 118 103 104
Staff receivables

10 22 9
Deferred tax asset

346 86 325
Intangible assets

1,791 1,858 1,825
Total Non-current Assets

6,575 3,282 3,500
TOTAL ASSETS

8,271 5,100 5,549




LIABILITIES




Current Liabilities



Trade and other payables

1,086 905 1,139
Related party payables

13 - -
Interest bearing loans 431 - -
Provisions for employee entitlements

223 231 193
Other liabilities 15 15 15
Total Current Liabilities

1,768 1,151 1,347
Non-current Liabilities

Other liabilities 26 41 34
Deferred tax liability 47 47 56
Total Non-current Liabilities 73 88 90
TOTAL LIABILITIES

1,841 1,239 1,437

PAGE
5


Interim Consolidated Statement of Financial Position (Cont)


Note Unaudited Unaudited Audited

30 September 2017 30 September 2016 31 March 2017

NZ $’000 NZ $’000 NZ $’000

EQUITY


Equity attributable to equity


holders of the parent


Contributed equity 9 5,105 2,882 2,936
Accumulated profit

1,325 979 1,176
TOTAL EQUITY

6,430 3,861 4,112




TOTAL EQUITY AND
LIABILITIES

8,271 5,100 5,549



The above Statement of Financial Position should be read in conjunction with the accompanying notes.
For and on behalf of the Board, who authorise the issue of these interim financial statements on 28
November 2017.









George Cooper

Lindsay Phillips

Chief Executive Officer

Chairman

28 November 2017

28 November 2017

PAGE
6


Interim Consolidated Statement of Comprehensive Income
For the six months ended 30 September 2017



Note

Unaudited Unaudited



30 September 2017 30 September 2016



NZ $’000 NZ $’000

Continuing operations

Revenue


Revenue


4,756 4,299
Other revenue

31 37

3

4,787 4,336




Cost of Goods Sold

(1,874) (1,527)
Advertising and marketing expense


(28) (56)
Employee benefits expense


(1,679) (1,706)
Finance expense


(20) -
Professional fees


(130) (76)
Travel expenses


(105) (67)
Other operating expenses


(337) (366)
Net gain (loss) on foreign exchange


(3) (4)
Depreciation & impairment (55) (49)




Profit (Loss) before income tax


556 485
Income (tax) / benefit 4

30 22
Net profit (loss) for the period 3

586 507
Other comprehensive income for the


(193)

(184)
period, net of income tax:
Loss on Datagate Limited joint venture

Total comprehensive income

393 323
for the period


Earnings per share for profit from
continuing operations attributable to the
ordinary equity holders of the company:


Basic earnings per share 7

0.052 0.048



Diluted earnings per share 7

0.052 0.048

The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

PAGE
7


Interim Consolidated Cash Flow Statement
For the six months ended 30 September 2017



Note
Unaudited Unaudited

30 September 2017 30 September 2016

NZ $’000 NZ $’000

Cash flows from operating activities

Receipts from customers (inclusive of GST)

4,730 4,916
Payments to suppliers and employees (inclusive of GST)
(4,143) (4,163)
Income tax refund

- -
Interest paid

- (2)
Interest received

6 6
Net cash flows generated / (used) in
operating activities 10
573 743



Cash flows from investing activities


Purchase of property, plant and equipment 6
(55) (12)
Staff loans

4 -
Purchase of Kilimanjaro Consulting Pty Ltd

(1,000) -
Purchase of other investments

(97) -
Net cash flows used for investing activities

(1,148) (12)



Cash flows from financing activities

Proceeds from issue of shares

- 139
Share buy-back
- (80)
Dividends paid
(244) (198)
Proceeds from/(repayment of) borrowing
488 (30)
Insurance loan
- (19)
Loans repaid by other entities
- 4
Loans to other entities
- (25)
Net cash flows from financing activities

244 (209)



Net increase / (decrease) in cash and cash equivalents
(237) (330)



Net foreign exchange differences

(2) (4)
Cash and cash equivalents at beginning of period
598 598
Cash and cash equivalents at 30 September

265 627


The above Cash Flow Statement should be read in conjunction with the accompanying notes.

PAGE
8



Interim Consolidated Statement of Changes in Equity

For the six months ended 30 September 2017


Unaudited
Note

Share capital
Retained earnings
Total equity

$000 $000 $000
Balance at 1 April 2016


2,823 854 3,677
Shares cancelled (80) (80)
New shares issued 139 - 139
Net Profit for the period - 507 507
Other comprehensive income - (184) (184)

Total comprehensive income for the period - 323 323
Dividend paid - (198) (198)
Balance at 30 September 2016 9 2,882 979 3,861





Unaudited
Note

Share capital
Retained earnings
Total equity

$000 $000 $000
Balance at 1 April 2017

2,936 1,176 4,112






New shares issued

2,169 - 2,169

Net Profit for the period

- 586 586

Other comprehensive income

- (193) (193)



Total comprehensive income for the period

- 393 393

Dividend paid - (244) (244)

Balance at 30 September 2017 9 5,105 1,325 6,430



Audited
Note



Share capital
Retained
earnings
Total equity

$000 $000 $000
Balance at 1 April 2016

2,823 854 3,677



-
Net profit for the period

- 1,068 1,068
Other comprehensive income

- (411) (411)


Total comprehensive income for the period
- 657 657
Transactions with owners, recorded directly
in equity


113 (335) (222)
Balance at 31 March 2017 9
2,936 1,176 4,112




The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.

PAGE
9


Notes to the Financial Statements

For the half year ended 30 September 2017

1 Corporate information
The Interim Condensed Consolidated Financial Statements of Enprise Group Limited (the Group) for the six months
ended 30 September 2017 were authorised for issue in accordance with a resolution of the Directors on 28
November 2017.

Enprise Group Limited (the parent) is a company limited by shares incorporated in New Zealand.

The nature of the operations and principal activities of the Group are described in the Directors’ Report section of
this report.


2 Basis of preparation and accounting policies
(a) Basis of preparation

The Interim Condensed Consolidated Financial Statements have been prepared in accordance with both IAS 34
Interim Financial Reporting and NZ IAS 34 Interim Financial Reporting.

The financial statements are presented in New Zealand dollars and all values are rounded to the nearest thousand
dollars ($’000) unless otherwise stated.

The Interim Condensed Consolidated Financial Statements do not include all the information and disclosures
required in the annual financial statements, and should be read in conjunction with the Group’s annual financial
statements as at 31 March 2017 and considered together with any public announcements made by Enprise Group
Limited relating to the half year ended 30 September 2017 in accordance with continuous disclosure obligations.

(b) Significant accounting policies
The accounting policies adopted in the preparation of the interim condensed consolidated financial statements are
consistent with those followed in the preparation of the Group’s annual financial statements for the year ended 31
March 2017.
3 Segment Information

In presenting information on the basis of geographical segments, segment revenue is based on the geographical
location of customers. Segment assets are based on the geographical location of the assets.
The geographic segments are described in the table below:
Legal Entity Location Percentage Held Geographic region
Enprise Group Limited (Parent) New Zealand 100% New Zealand
Enprise Solutions Limited New Zealand 100% New Zealand and Globally
Enprise Australia Pty Limited Australia 100% Australia
Enprise Limited (non-trading) New Zealand 100% New Zealand
Global Bizpro (non-trading) New Zealand 100% New Zealand

Joint Venture Location Percentage Held Geographic region
Datagate Innovation Limited New Zealand 43.9% New Zealand and Globally

PAGE
10



3 Segment Information (continued)

Other Investments Location Percentage Held Geographic region
Kilimanjaro Consulting Pty Limited Australia 47.0% Australia
Zhik Pty Limited Australia 0.7% Australia and Globally

Geographic segments
The following table presents a summary of revenue, other income and profit and loss information regarding the
subsidiaries performance for the six months ended 30 September 2017, and for the six months ended 30
September 2016.

Six months ended
30 September 2017
(unaudited)
New
Zealand

NZ $’000

Australia

NZ $’000

TOTAL

NZ $’000
External Revenue 3,729 1,027 4,756
Other income 30 1 31
Total external revenue 3,759 1,028 4,787
Net Profit 587 (1) 586




Six months ended
30 September 2016
(unaudited)
New
Zealand

NZ $’000

Australia

NZ $’000

TOTAL

NZ $’000
External Revenue 3,414 876 4,299
Other income 37 - 37
Total external revenue 3,451 876 4,336
Net Profit 425 82 507



30 September 2017
Enprise
Solutions
Corporate Total
Revenue

Total segment revenue
4,690 66 4,756
Rent received
25 - 25
Interest received
3 3 6



Total group revenue
4,718 69 4,787



Net Profit / (Loss)
761 (175) 586

30 September 2016
Enprise
Solutions
Corporate Total
Revenue

Total segment revenue
4,299 - 4,299
Rent received
31 - 31
Interest received
3 3 6


Total group revenue
4,333 3 4,336


Net Profit / (Loss)
645 (138) 507

PAGE
11


4 Income Tax

For the six months ended 30 September 2017 (unaudited) 2017 2016
NZ $’000 NZ $’000
(a) Income tax expense

Statement of Comprehensive Income

Current income tax - -

(b) Reconciliation between tax at statutory rate and
tax expense in Statement of Comprehensive Income

Parent and Subsidiaries Profit taxed at 28%
Australian Subsidiary Profit (Loss) taxed at 30%
164 136


Relating to non-deductible differences
63 9
Relating to origination and reversal of temporary
differences
(30) 13
Tax effect of tax losses utilised
(227) (180)

Income tax expense/(benefit) reported in the Statement of
Comprehensive Income
(30) (22)

Accumulated tax losses (8,592) (9,395)


The Company continues to meet the shareholder continuity requirement to carry forward tax losses. The
recognition of deferred tax assets is based upon whether it is more likely than not that sufficient and suitable
taxable profits will be available in the future against which the reversal of temporary differences can be deducted.
To determine the future taxable profits, reference is made to the latest forecasts of future earnings of the Group.
Where the temporary differences are related to losses, relevant tax law is considered to determine the availability
of the losses to offset against the future taxable profits.

The Group has recognised the benefit of a deferred tax asset for unutilised tax losses for one years’ forecast taxable
profit in New Zealand. The Directors have not recognised the benefit of unutilised tax losses beyond one year due
to uncertainty with regards to future shareholder continuity.
5 Dividends paid and proposed

A 2017 final dividend of 3.5 cents per share was paid on 17 July 2017.
6 Property, plant and equipment

During the six months ended 30 September 2017, the Group acquired tangible assets to the value of NZ $37,173
(30 September 2016: NZ $11,823).

PAGE
12


7 Earnings per share

The following reflects the income used in the basic and diluted earnings per share computation:

For the six months ended 30 September (unaudited)



(a) Earnings used in calculating earnings per share
2017
2016
NZ $’000 NZ $’000

For basic earnings per share:

Net Profit attributable to ordinary equity holders of the parent 393 323


For diluted earnings per share:

Net Profit attributable to ordinary equity holders of the parent from basic
EPS
393 323
Net Profit attributable to ordinary equity holders of the parent 393 323


(b) Weighted average number of shares
2017 2016

000’s 000’s


Weighted average number of ordinary shares for basic earnings per share
7,608 6,771
Effect of dilution:

Share options
- -


Weighted average number of ordinary shares (excluding reserved shares)
adjusted for the effect of dilution
7,608 6,771


There are no instruments (eg share options) included in the calculation of diluted earnings per share that could
potentially dilute basic earnings per share in the future because they are anti-dilutive for either of the periods
presented.
There have been no transactions involving ordinary shares or potential ordinary shares that would significantly
change the number of ordinary shares or potential ordinary shares outstanding between the reporting date and the
date of completion of these financial statements.

(c) Information on the classification of securities
(i) Options
Options granted to employees are considered to be potential ordinary shares and have been included in the
determination of diluted earnings per share to the extent they are dilutive. These options have not been included
in the determination of basic earnings per share.

8 Current assets - cash and cash equivalents
Unaudited Unaudited
(Audited)
30 September
2017
30 September
2016
31 March
2017
NZ $’000 NZ $’000 NZ $’000


Cash at bank 265
627 598
Short-term deposits - - -
Carrying amount of cash and cash equivalents 265 627 598

PAGE
13




9 Contributed equity, retained earnings and reserves

Contributed equity consists of ordinary shares issued and fully paid. These ordinary shares carry one vote per share
and carry the rights to dividends.
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the
financial statements of foreign subsidiaries.

10 Cash flow statement reconciliation
For the six months ended 30 September (unaudited) 2017 2016
NZ $’000 NZ $’000

Reconciliation of net loss to net cash flows from operations


Net Profit / (Loss)
393 323


Adjustments for:

Depreciation and amortisation
55 49
Release of fit-out loan
(8) -
Net gain / loss on foreign exchange
3 4
Bad debts written off
- 18
Share of loss from equity accounted Joint Venture
193 184
Income Tax
(30) (22)


Changes in assets and liabilities

(Increase)/decrease in trade and other receivables
1 138
(Increase)/decrease in inventories
(52)
(Decrease)/increase in trade and other payables
(12) 57
Decrease in other liabilities
30 (8)


Net cash from operating activities
573 743



11 Related party disclosure
The following table provides the total amount of transactions that were entered into with related parties for the half
year ended 30 September:
Related Party

Sales to related
parties
Purchases from
related parties
Amounts owed by
related parties
Amounts owed to
related parties
NZ $’000 NZ $’000 NZ $’000 NZ $’000
Directors and related entities:

Nightingale Partners
(Related Party)
2017 - - - -
2016 - - - -
Datagate Innovation Ltdd
(Related Party)
2017 24 - 13 -
2016 - - - -
The Sales Factory Ltd
(Common Director)
2017 - 8 - 12
2016 - 33 - -
Kilimanjaro Consulting Pty Ltd 2017 66 2 66 1
(Related Party) 2016 - - - -



12 Share-based payment plans
No share options were granted or forfeited in the six month period to 30 September 2017 (30 September 2016: nil).

PAGE
14


13 Commitments
(a) Leasing commitments
The Group has commercial lease commitments.
 Enprise Solutions Limited – Auckland Office
The lease of Enprise Solutions Limited, Auckland Office is for an initial term of 8 years commencing 21 June
2012 with a renewal of a further 6 years. The renewal date is 21 June 2020. The final expiry date of the lease is
20 June 2026.
 Enprise Solutions Limited – Wellington Office
The lease of Enprise Solutions Limited, Wellington office, is for a term of 12 months, commencing on the 1st
February 2017. The lease expires on 31st January 2018 with a renewal of a further one year.
 Enprise Solutions Limited – Hamilton Office
The lease of Enprise Solutions Limited, Hamilton office, commenced on the 5th November 2007. The lease
agreement continues to operate until terminated by either party by way of 3 months’ notice in writing.
 Enprise Australia Pty Limited – Melbourne Office
The lease of Enprise Australia Pty Limited, Melbourne office, commenced on the 1st December 2016 and is for
a minimum term of 6 months expiring 31st May 2017. The lease agreement continues to operate until
terminated by either party by way of 3 months’ notice in writing. This lease was cancelled on 19
th
September
2017.
 Enprise Australia Pty Limited – Sydney Office
The lease of Enprise Australia Pty Limited, Sydney Office, commenced on the 1
st
June 2017 and is on a casual
month to month basis. The lease agreement continues to operate until terminated by either party by way of 1
month notice in writing.

Future minimum rentals payable under non-cancellable operating leases as at 30 September are as follows:

2017 2016
NZ $’000 NZ $’000
Within one year 149 145
After one year but not more than five years 224 352
After more than five years - -
Total minimum lease payments 373 497

(b) Property, plant and equipment commitments
The Group had no contractual obligations to purchase plant and equipment at balance date (31 March 2017: NZ
$Nil).

14 Events after the reporting date
There are no material events after the reporting date.

15 Contingencies
There were no know material contingent liabilities at 30 September 2017 (31 March 2017 : NZ $Nil)

16 Going Concern
The financial statements have been prepared on a going concern basis.

PAGE
15


Directors’ Declaration



The Directors declare that the interim condensed consolidated financial statements:

I. Comply with NZ IAS 34 Interim Financial Reporting.

II. Give a true and fair view of the financial position of Enprise Group Limited and its subsidiaries as at
30 September 2017 and of their performance, as represented by the results of their operations and
their cash flows for the half-year ended on that date.

In the Directors’ opinion at the date of this declaration, there are reasonable grounds to believe that
Enprise Group Limited will be able to pay its debts as and when they become payable.

The declaration is made in accordance with a resolution of Directors and is signed for and on behalf of
the Board of Directors.

Dated at Auckland this 28th day of November 2017.




George Cooper Lindsay Phillips
Director Chairman
28 November 2017 28 November 2017

PAGE
16



Corporate Information

New Zealand company number 1562383
ARBN (Australian Registered Body Number) 125 825 792
ABN (Australian Business Number) 41 125 825 792


Contact details

New Zealand Principal place of business
Level 1, 16 Hugo Johnston Drive Level 1, 16 Hugo Johnston Drive
Penrose Penrose, Auckland, New Zealand
PO Box 62262 Phone: +64 9 829 5500
Sylvia Park
Auckland 1644 Registered office
Phone: +64 9 829 5500 Level 1, 16 Hugo Johnston Drive
Fax: +64 9 829 5501 Penrose, Auckland, New Zealand

Australia
P O Box R348
Royal Exchange
Sydney
NSW 1225 Registered office – Australia
Phone: +61 2 8355 7055 Level 3, 22 Market Street
Fax: +61 2 8355 7045 Sydney, NSW 2000


Internet address
www.enprisegroup.com

Email
info@enprisegroup.com


Directors Lindsay Phillips Chairman
George Cooper Chief Executive Officer
Nicholas Paul Non-Executive Director


Share Register Link Market Services Limited
Level 7, Zurich House
21 Queen Street
Auckland, New Zealand
Phone: +64 9 375 5990

Enprise Group Limited shares are listed on the New Zealand Stock Exchange Alternative Market


Auditor Staples Rodway, Auckland, New Zealand


Bankers ASB, Auckland, New Zealand
CBA, Sydney, Australia