Investor Update

Investor AGM Update 23 December 2020

Overview

2020 has been a challenging year where we faced unexpected events of dramatic global
impact, creating market uncertainty and volatility but also opportunities to grow and improve.
Enprise is confident it has implemented measures to mitigate further impacts, consolidate
existing business units and support an ambitious growth strategy over the coming years.

Working from home became the norm due to lockdowns implemented by governments
around the world. Organisations that did not have all their software applications available to
enable their teams to work remotely had to adopt cloud computing to allow their businesses
to operate.

Enprise initially suffered, like many other entities, a sharp drop in revenue (over 30%) and
qualified for wage support in both New Zealand and Australia. In response to the COVID-19
lockdown, cost cutting measures were implemented across the group. The Government
support enabled us to retain our full team despite the downturn.

To shore up our capital base, a $1 million capital raise was completed in May 2020 positioning
the business well for the future.

After the initial sharp correction, the demand for our products and services quickly recovered
because all the software that Enprise companies supply (including in particular MYOB
Advanced) can be deployed in the cloud. Sales have still not fully recovered however, with the
additional lockdowns in Victoria and Auckland impacting confidence in those markets.

Currently the Australian MYOB business is performing strongly and employing our
underutilised New Zealand personnel. New Zealand new business for the MYOB Enterprise
products remains weak. Overall, the division has returned to strong profitability and we expect
this to continue over the remainder of the year.

Technology Investment Network (TIN) has ranked Enprise Group third in the top ten Absolute
IT Supreme Scale-Ups in this year’s TIN Report. Enprise Group achieved the number three spot
due to 85% revenue growth. Enprise Group’s revenue was $5.7 million higher for 2020, to
$12.4 million. The results were announced at a virtual, interactive launch event, Tech Pulse
2020.

 

At 30 November 2020, Enprise had no debt and cash reserves of $2.48m (after increasing our
share of iSell from 50 to 67%).

Enprise has decided to move its banking from ASB/CBA to BNZ/NAB. BNZ has committed to
providing Enprise Group with a three year loan of $2 million and an overdraft facility of $1
million to facilitate future growth. These facilities have not yet been drawn.



Unaudited Management Information for the 5 months ended 30 November 2020

Group Results
Unaudited Management Information
5 months to 30 November
2020 2019 Change
Revenue 6,612,898 7,199,969 8% Decrease
EBITDA 221,031 26,695 728% Increase
Share of Datagate losses (199,912) (215,056) 24% decrease
Government Assistance: Australia 753,284 n.a.
Net Profit before tax 510,093 (280,550) 282% Increase

Enterprise Division
Unaudited Management Information
5 months to 30 November
2020 2019 Change
Revenue
- Recurring revenue 2,059,263 1,943,689 6% Increase
- Non-recurring revenue 4,170,966 4,778,771 13% Decrease
Total 6,230,229 6,722,460 7% Decrease
Profit 763,618 494,581 54% Increase
Government Assistance: Australia 664,699 n.a.
Net Profit before tax 1,428,317 484,851 195% Increase

Enprise Division Highlights
• Pivoted the business in response to COVID-19 and retained our highly skilled teams.
• Restructured the two divisions (Enprise Solutions and Kilimanjaro Consulting) into a
single Enterprise Division generating cost savings and efficiency improvements.
• Established a new management team for this combined division and team-based
structures designed for growth
• Geographic diversification, reduces the impact of recession in one location and
enables better utilisation of the teams.
• Addressed the rapidly emerging market for MYOB Advanced, with the move to Cloud
accelerated by COVID-19
• Pleased with the clear indication from MYOB that they will attack the mid-market with
the MYOB Advanced product, which is our sweet spot
• The solid link between MYOB Advanced and Acumatica, the fastest growing ERP
system in the world, is leading to rapid development of the MYOB advanced product.

• The emergence of MYOB as the market leader in the mid-market positions us for
growth with Kilimanjaro being MYOB’s largest Australian Partner and Enprise the
largest NZ partner.
• Underlying strength in our joint client base will likely lead to increased spend as the
economies improve
• Strong financial management across the Enterprise Division, with good debtor
management impacting positively on cash flow.

iSell
Unaudited Management Information
As at 30 November
2020 2019 Change
Cloud customer count
- Australia 174 69 152% Increase
- New Zealand 29 11 164% Increase
- Europe 29 -
- North America 2 -
- Rest of the world 8 4 100% Increase
Total 242 84 188% Increase
Revenue (5 months ended 30 November)
- Recurring revenue 307,269 261,555 17% Increase


iSell Highlights of the last 12 months
• iSell has a further 44 on-premises customers to migrate to cloud, 12 of those are in
progress. It is planned to complete the cloud migration of the remaining 32 on-premises
customers in Q1 2021.
• iSell’s first customer in the USA was acquired in October 2020. iSell is now focussed on
creating a beachhead in the USA similar to that successfully achieved in the UK.
• A non-exclusive reseller heads of agreement has been signed in December 2020 with a
value added reseller (VAR) in the UK with offices across Europe to represent iSell in these
markets.
• Enprise made an offer to the minority shareholders in iSell to acquire all their shares at
A$0.30 per share. Only three accepted, seeing our share of iSell increase to 67%.
• Further investment will be required in iSell over 2021 with breakeven not anticipated until
June 2022.

Datagate
Unaudited Management Information
At 30 November 2020 2020 2019 Change
Annual Recurring Revenue $1,197,408 $838,632 43% Increase
Customer count
- New Zealand 31 33 6% Decrease
- North America 58 16 263% Increase
- Australia 22 8 175% Increase
- Rest of the world 5 4 25% Increase
Total 116 61 90% Increase

Datagate Highlights of the last 12 months
• Started a Value Added Reseller (VAR) channel and signed 3 VAR’s (2 in USA and 1 in
Australia) which combined have delivered 50 signed customers.
• The Datagate team in North America has grown to nine FTE’s.
• Signed deals yet to go live will increase the ARR to $1.5 million.
• In November 2020 Datagate raised $1,154,349 at $2.20 per share in new capital to
continue its successful growth in North America. Enprise took its full rights entitlement
($335,038) which it funded from existing cash resources.

• At $2.20 per share, Enprise’s investment in Datagate after this commitment is valued
at $4,422,873.

Vadacom

Vadacom is performing to plan and the board is pleased with the year to date progress.

A buyback of the share capital has been processed, with $1 million in cash distributed to the
shareholders in December and a further $1.4 million over coming years. Enprise will receive
$62,350 in cash and its share of the future distribution when it is paid. Currently we value our
holding in Vadacom including the future distribution rights at $750,570.