Preliminary Full Year Results 30 June 2023

AUCKLAND, 29 August, 2023.

PRELIMINARY FULL YEAR RESULTS - 30 JUNE 2023

Hi-tech software and services investment company Enprise Group (NZX: ENS) today released its unaudited
financial statements for the year ended 30 June 2023 and reported unaudited revenue of $20.7 million for that
period, up from $18.7 million reported for the year ended 30 June 2022 (a 10.7% increase).

Total comprehensive income for the year ended 30 June 2023 was a loss of $11.8 million (down $9.7 million
from a loss of $2.1 million for the year ended 30 June 2022). This decline was due to several factors including;

• the write off of all goodwill from Kilimanjaro ($6.7 million) and iSell ($1.0 million).
• the write off of goodwill in Kilimanjaro being the worst-case scenario of an independent valuation due to
the ongoing dispute with MYOB causing disruption to the management focus and operation of the
business unit.
• the goodwill in iSell was written off at 31 December 2022, as advised in the half year results
announcement, due to the slower than previously forecast revenue growth, slower than anticipated
delivery of some key features and the change in discount rates.
• a change in accounting policy to increase the amortisation of the IT Quoter software by reducing the
amortisation period from 10 years to 4 years. The amortisation using the new policy is $1.673 million, if
the current policy had been applied in prior years the amount would be $0.783 million (4 years) had the
previous policy applied (10 years) the amortisation would have been $0.313 million.

The breach of the BNZ banking covenants will continue and the board intends to seek a further waiver.

Kilimanjaro Consulting

Kilimanjaro Consulting had recurring revenue of $3.7 million (down 6%) and contracted revenue of $4.2 million
(up 25%) out of a total revenue of $19.4 million (up 10%).

Kilimanjaro's future with MYOB will be largely dictated by the outcome of the dispute, as referenced in the
announcement to the NZX on 1st August 2022. Kilimanjaro was successful in obtaining an injunction on 4 August
2023 that allows Kilimanjaro Australia to withhold the margin on MYOB Exo annual license fees and MYOB
cannot commence action against Kilimanjaro for breach of the Business Partner Agreement for this reason.
Kilimanjaro considers it prudent to diversify and the management team is actively investigating options. There
are significant changes in the markets in which Kilimanjaro operate. The direct entry of MYOB has de-stabilised
the Partner Channel, and further consolidation can be expected.

Whilst low business confidence and inflationary expectations are creating headwinds, there remains cause for
optimism. Kilimanjaro operates in a number of diverse markets that are resilient to recession. This, combined
with our strong investment in people, marketing, technical excellence, internal platforms/system and the trend
towards Cloud based software positions the business well for future growth should we be able to resolve the
current dispute.

iSell

Annual recurring revenue (ARR) increased to $1.22 million (up 18%) and total revenue to $1.2 million (up 10%).
Enprise currently owns 75% of iSell. During the year iSell completed the integration to Halo PSA which has
increased its addressable market. On 25 August 2023, iSell opened a rights issue which will raise AU$900,000 of
which AU$600,000 is Enprise converting its existing loan and AU$300,000 new funds from other iSell
shareholders to support its sales growth as iSell nears completion of development work on the latest version of
its software.

Some funds will be used to pay the agreed settlement sum in relation to a legal case taken by a former employee
which was settled on 31 July 2023.

Datagate

Enprise Group’s associate, Datagate Innovation Ltd (Datagate) grew its annual recurring revenue (ARR) to over
$3.3 million, an increase of 35%. Datagate continues to be in high growth mode and is keeping its focus on
growing revenue and market share. Datagate is forecasting to reach break-even in the last quarter of the 2023
calendar year. The convertible note was exercised on 18 November 2022 increasing Enprise shareholding in
Datagate by 237,472 shares. Enprise also participated in the Datagate rights issue in November 2022, taking its
approximate pro rata share of the fully subscribed issue of $0.75 million at $2.80 per share. Enprise now holds
2,411,024 shares (32.96%) of Datagate.

Vadacom

Vadacom Holdings Ltd (Vadacom)’s recently released new cloud PBX phone system ‘Next Voice’. Functionality
continues to expand to support new and existing customers directly and through resellers. As a result of a draft
independent valuation of Vadacom, Enprise Group wrote down the carrying value of this investment during the
period by $0.16 million. Vadacom continues to be profitable through careful cost control in a difficult market.
Vadacom repaid 56% of the outstanding shareholder loans during the year.

About Enprise Group
Listed on the New Zealand Stock Exchange (NZX), Enprise Group (ENS) is an investment vehicle for high-
growth tech companies that complement its core ERP capability. Enprise Group is invested in five businesses –
the wholly owned companies Kilimanjaro Consulting Pty Ltd and Kilimanjaro Consulting Ltd, subsidiary iSell, joint
venture Datagate Innovation, and a holding in Vadacom.
Kilimanjaro Consulting is MYOB’s number one partner in Australia and New Zealand. iSell is a primary provider
of cloud business systems to the IT Reseller market world-wide. Datagate Innovation provides SaaS Telecom
Billing for MSPs in the U.S, U.K, Australia, New Zealand and Canada. Vadacom specialises in cloud phone
system software development and unified communications solutions for Australian and New Zealand businesses.

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Enprise Group Limited
Unaudited Results for Announcement to the Market
Reporting period
12 month to 30 June 2023
Previous reporting period
12 month to 30 June 2022
Currency
New Zealand Dollar
Amount (NZD'000)
Revenue from ordinary activities 20,657
10%increase
Total Revenue 20,657
10%increase
Profit/(loss) before income tax from continuing operations (11,032)
356%decrease
Total net profit/(loss) (11,774)
437%decrease
Final Dividend
Amount per quoted equity security $0.00000000
Imputed amount per quoted equity security $0.00000000
Record Date n/a
Dividend Payment Date n/a
Current period
Net tangible assets per quoted equity security (0.14)
Percentage change
Prior period
(0.01)
Comments:

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Enprise Group Limited
Unaudited Results Announcement
for the year ended 30 June 2023

Enprise Group Limited
Unaudited Consolidated Statement of Comprehensive Income
for the year ended 30 June 2023
30 June 202330 June 2022
$'000$'000
Revenue from contracts with customers20,65718,744
Employee expense(16,026)(15,057)
Other operating costs(6,169)(5,501)
Other gains/(losses) - net(77)32
Operating profit/(loss)
(1,615)(1,782)
Equity earnings/(losses) from associates and joint ventures(330)(556)
Other gains/(losses) related to associates and joint ventures- 8
Impairment of intangible assets(7,720)-
Finance cost - net(209)(90)
Profit/(loss) before income tax
(9,874)(2,420)
Income tax benefit(742)227
Profit/(loss) for the period(10,616)(2,193)
Other Comprehensive Income
Items that may be reclassified to profit or loss
Foreign currency translation differences(6)155
Items that will not be reclassified to profit or loss
Changes in the fair value of investments through other comprehensive income(157)(60)
Total other comprehensive income/(loss) for the period, net of tax(163)95
Total comprehensive income/(loss) for the period
(10,779)(2,098)
Profit/(loss) for the period is attributable to:
Non-Controlling Interest(221)(357)
Owners of Enprise Group Limited
(10,395)(1,836)
(10,616)(2,193)
Total comprehensive income/(loss) for the period is attributable to
Non-Controlling Interest(221)(357)
Owners of Enprise Group Limited
(10,558)(1,741)
(10,779)(2,098)
Earnings per share from profit/(loss) for the period attributable to ordinary shareholders of the Enprise Group Limited
Basic and diluted earnings/(loss) per share (cents per share)(61.50) (11.36)
2

Enprise Group Limited
Unaudited Consolidated Statement of Financial Position
as at 30 June 2023
30 June 202330 June 2022
$'000$'000
Current assets
Cash and cash equivalents
1,1781,546
Trade and other receivables
3,1053,190
Contract assets
852831
Current tax assets
24-
Staff receivables
12-
Total current assets
5,1715,567
Non-current assets
Investments in associates, joint ventures
912285
Investments in other entities
471627
Staff receivables - non current
17-
Property plant and equipment
328406
Intangible assets
3,14211,173
Right-of-use assets - non-current
1,0981,340
Deferred tax asset
1,2892,197
Loans to related parties - non current
3273
Other non-current assets
36552
Total non-current assets
7,32516,653
Total assets
12,49622,220
Current liabilities
Trade and other payables
3,5052,963
Provisions
1,7751,696
Contract liabilities
1,5202,582
Current tax liabilities
- 19
Borrowings
2,0961,183
Lease liabilities
357495
Total current liabilities
9,2538,938
Non-current liabilities
Provisions - non-current
190302
Lease liabilities - non-current
876970
Deferred tax liability
531656
Total non-current liabilities
1,5971,928
Total liabilities
10,85010,866
Net assets
1,64611,354
Equity
Share capital
12,09211,010
Foreign exchange translation reserve
345351
Financial assets at FVOCI reserve
371528
Retained earnings / (accumulated losses)
(11,101)(696)
Equity attributable to the owners of Enprise Group Limited1,70711,193
Non-controlling interests
(61)161
Total equity
1,64611,354
- -
Total assets per share ($ per share)
0.72 1.38
Net tangible assets per share ($ per share)(0.14) (0.01)
3

Enprise Group Limited
Unaudited Consolidated Statement of Changes in Equity
for the year ended 30 June 2023
Share capital
Foreign
exchange
translation
reserve
Financial
assets at
FVOCI
reserve
Retained
earnings /
(accumulated
losses)
Non-
controlling
interests
Total equity
$'000$'000$'000$'000$'000$'000
Balance at 1 July 202111,010 196 588 1,444 555 13,793
Transactions with shareholders in their capacity as owners
Dividends paid
- - - (404) - (404)
Transactions with non-controlling interests- - - 100 (37) 63
Total transactions with shareholders
- - - (304) (37) (341)
Comprehensive income
Profit/(loss) for the period- - - (1,836) (357) (2,193)
Other comprehensive income
- 155 (60) - - 95
Total comprehensive income net of tax- 155 (60) (1,836) (357) (2,098)
Balance at 30 June 2022
11,010 351 528 (696) 161 11,354
Balance at 1 July 202211,010 351 528 (696) 161 11,354
Transactions with shareholders in their capacity as owners
Dividends paid
- - - - - -
New shares issued (note 4)1,082 - - - - 1,082
Transactions with non-controlling interests - - - (10) (1) (11)
Total transactions with shareholders
1,082 - - (10) (1) 1,071
Comprehensive income
Loss for the period- - - (10,395) (221) (10,616)
Other comprehensive income/(loss)
- (6) (157) - - (163)
Total comprehensive income/(loss) net of tax
- (6) (157) (10,395) (221) (10,779)
Balance at 30 June 2023
12,092 345 371 (11,101) (61) 1,646
4

Enprise Group Limited
Unaudited Consolidated Statement of Cash Flows
for the year ended 30 June 2023
Note
30 June 202330 June 2022
$'000$'000
Operating activities
Cash was provided from:
Receipts from customers
28,610 26,154
Government assistance
- 4
Interest received
6 1
28,61626,159
Cash was applied to:
Payments to suppliers & employees
29,111 26,163
Interest paid
239 122
Income tax paid
3 20
29,35326,305
Net cash inflow/(outflow) from operating activities5(737) (146)
Investing activities
Cash was provided from:
Loans repaid by staff2
-
Loans repaid by related parties
42 16
44 16
Cash was applied to:
Purchase of property, plant and equipment
77 181
Software development costs
516 305
Investment in equity accounted joint venture434
-
Convertible note
-
500
Purchase of business
- 325
1,0271,311
Net cash inflow/(outflow) from investing activities(983) (1,295)
Financing activities
Cash was provided from:
Proceeds from issue of shares1,052 -
Proceeds from bank borrowings
723
1,000
Proceeds from issue of shares in iSell Pty Limited to non-controlling interests
- 136
1,775 1,136
Cash was applied to:
Dividends paid
- 404
Purchase of shares in iSell Pty Limited from non-controlling interests
11 74
Repayment of lease liabilities
595 612
Repayment of bank borrowings
388 188
Repayment of other borrowings
42 12
1,036 1,290
Net cash inflow/(outflow) from financing activities739 (154)
Net increase/(decrease) in cash and cash equivalents held(981) (1,595)
Net foreign exchange differences
(6) 5
Cash and cash equivalents at beginning of the period1,216 2,806
Cash and cash equivalents at end of the period
6
229 1,216
5

Enprise Group Limited
Notes to Accompany the Unaudited Results Announcement
for the year ended 30 June 2023
1CHANGES IN ACCOUNTING POLICIES
(a)Changes in accounting policies
(b)Critical accounting judgements and estimates
(c)Changes in accounting policies
2SEGMENT INFORMATION
(a)Operational performance - business segments
Revenue
Operating profit
30 June 202330 June 202230 June 202330 June 2022
$'000$'000$'000$'000
Kilimanjaro Consulting19,407 17,618 208 351
iSell1,201 1,093 (955) (1,249)
Corporate49 33 (868) (884)
- -
20,657 18,744 (1,615) (1,782)
Equity earnings of associates and joint ventures(330) (548)
Impairment of intangible assets(7,720) -
Net interest expense(209) (90)
- -
Profit/(loss) before taxation(9,874) (2,420)
- -
Income Tax(742) 227
- -
Net profit/(loss) attributable to shareholders(10,616) (2,193)
There have been no changes in accounting policies with the exception of the estimated useful life of software, all policies have been applied consistently over the
current year. Please refer to the accounting policies contained within the audited financial statements for the year ended 30 June 2022.
In the process of applying the Group's accounting policies and the application of accounting standards, a number of estimates and judgements have been made. The
estimates and underlying assumptions are based on historical experience and adjusted for current market conditions and other factors, including expectations of
future events that are considered to be reasonable under the circumstances. The most significant of these of relevance to the reported results for the 2023 year
include:
Impairment testing - goodwill and other intangible assets The group's intangible assets have been assessed by management and has resulted in an impairment of
all the goodwill in the cash generating units.
Deferred tax The group has only recognised a deferred tax asset on the timing differences in its statement of financial position as at the reporting date. Significant
judgement is required in determining if the utilisation of deferred tax assets is probable. 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 and relevant tax law is considered to determine the
availability of the losses to offset against the future taxable profits.
The Group is organised into two reportable operating segments based on the business segments. These segments form the basis of internal reporting used by
management and the Board of Directors to monitor and assess performance and assist with strategic decisions. The Board of Directors is the Group's chief operating
decision maker (CODM). Management has determined the operating segments based on the information reviewed by the Board of Directors and the Chief Executive
Officer for the purposes of allocating resources and assessing performance.
Intangible assets - software amortisation The directors have revisited the expected useful life and benefit of "In-house" developed software and determined that
the completed software be amortised on a straight-line basis over the period of 4 years.
An independent assessment of the fair value of iSell was conducted at 30 June 2023, for the purpose of considering the fair value less cost of disposal of the cash
generating unit. The Level 3 fair value estimate was higher than the carrying value of the iSell cash generating unit, and indicated a fair value which would indicate
no further impairment of all the goodwill taken at 31 December 2022, including allowance for costs of disposal and non-controlling interests share of the intangible
assets.
An independent assessment of the fair value of Kilimanjaro was conducted at 30 June 2023, for the purpose of considering the fair value less cost of disposal of the
cash generating units. The Level 3 fair value estimate was lower than the carrying value of the Kilimanjaro cash generating units, and indicated a fair value which
would indicate impairment in the worst case scenario, including allowance for costs of disposal. The board decided to accept the worse case scenario given the on-
going dispute with MYOB and the negative impact this is having on the financial performance of the cash generating units.
6

Enprise Group Limited
Notes to Accompany the Unaudited Results Announcement
for the year ended 30 June 2023
2SEGMENT INFORMATION (CONTINUED)
(b)Operational performance - Geographic segments
Revenue
Operating profit
30 June 202330 June 202230 June 202330 June 2022
$'000$'000$'000$'000
New Zealand7,027 6,066 (375) 37
Australia13,458 12,474 (1,072) (2,023)
EMEA*154 152 (159) 152
North America16 9 (9) 9
Asia2 43 - 43
- -
20,657 18,744 (1,615) (1,782)
-
* Europe, Middle East and Africa
- -
(c)Interest, deprecation and amortisation
Interest revenue
Interest expense
30 June 202330 June 202230 June 202330 June 202230 June 202330 June 2022
$'000$'000$'000$'000$'000$'000
New Zealand17 22 199 92 290 292
Australia3 - 30 20 1,240 1,062
20 22 229 112 1,530 1,354
- #REF!#REF!#REF!#REF!
(d)Balance sheet informationNon Current Asset
Total assets
Total liabilities
30 June 202330 June 202230 June 202330 June 202230 June 202330 June 2022
$'000$'000$'000$'000$'000$'000
Kilimanjaro Consulting1,814 9,052 7,922 16,688 9,186 11,374
iSell2,755 3,867 2,949 4,150 1,995 878
Corporate912 285 4,442 5,227 2,486 2,459
5,481 13,204 15,313 26,065 13,667 14,711
Inter-segment elimination- - (2,817) (3,845) (2,817) (3,845)
-
5,481 13,204 12,496 22,220 10,850 10,866
-
New Zealand1,831 3,119 6,876 9,832 4,966 5,566
Australia3,650 10,085 7,839 15,764 8,103 8,676
5,481 13,204 14,715 25,596 13,069 14,242
Inter-segment elimination- - (2,219) (3,376) (2,219) (3,376)
- -
5,481 13,204 12,496 22,220 10,850 10,866
- - - - - - - -
3REVENUE
(a)Revenue streams
30 June 202330 June 2022
$'000$'000
- -
Revenue from Enterprise software and licences
4,476 4,852
- -
Revenue from services and support
13,214 11,398
- -
Revenue from iSell
1,201 1,093
Revenue from hosting services
1,762 1,388
- -
Revenue from other fees
4 13
- - 20,657 18,744
Software and licencesServices and supportITQuoter RevenueExoHostedother fees
Depreciation and
amortisation expense
Non-current assets other than
financing and deferred tax
7

Enprise Group Limited
Notes to Accompany the Unaudited Results Announcement
for the year ended 30 June 2023
3REVENUE (CONTINUED)
(a)Revenue by geographical location
30 June 2023
$'000$'000$'000$'000$'000$'000
-
New Zealand
1,605 4,538 179 703 2 7,027
-
Australia
2,871 8,676 850 1,059 2 13,458
EMEA*
- - 154 - - 154
North America
- - 16 - - 16
Asia
- - 2 - - 2
- - 4,476 13,214 1,201 1,762 4 20,657
* Europe, Middle East and Africa
30 June 2022
$'000$'000$'000$'000$'000$'000
-
New Zealand
1,870 3,466 124 598 8 6,066
-
Australia
2,982 7,932 765 790 5 12,474
-
EMEA*
- - 152 - - 152
-
North America
- - 9 - - 9
Asia
- - 43 - - 43
- - 4,852 11,398 1,093 1,388 13 18,744
30 June 202330 June 2022
$'000$'000

Recurring revenue from Enterprise software licences
3,661 3,897

Contracted revenue from hosting and support agreements
4,171 3,325

Revenue from other services
11,575 10,396
19,407 17,618
- -
30 June 202330 June 2022
$'000$'000

Recurring revenue from iSell software licences
1,097 974

Revenue from other services
104 119
1,201 1,093
- -
30 June 202330 June 2022
$'000$'000

Revenue from services
49 33
49 33
Revenue from
hosting services
Kilimanjaro Consulting revenue
Revenue from
services and
support
Total
Revenue from
services and
support
Corporate revenue
Revenue from
hosting services
Revenue from
software and
licences
Revenue from
iSell
Revenue from
other fees
Revenue from
iSell
Total
Revenue from
software and
licences
iSell revenue
Revenue from
other fees
8

Enprise Group Limited
Notes to Accompany the Unaudited Results Announcement
for the year ended 30 June 2023
4EQUITY
(a)Share capital
Number of authorised sharesShare capital
Contributed equity - ordinary shares
30 June 202330 June 202230 June 202330 June 2022
sharesshares$'000$'000
Opening ordinary shares16,157,699 16,157,699 11,010 11,010
Rights issue1,210,662 - 1,029 -
Staff share issue61,700 - 53
- - 17,430,061 16,157,699 12,092 11,010
(b)Dividends
30 June 202330 June 202230 June 202330 June 2022
cents per sharecents per share$'000$'000
Final dividend for the period ended 30 June 20212.50 - 404
Interim dividend for the period ended 30 June 2022- - - -
Final dividend for the period ended 30 June 2022- - - -
Interim dividend for the period ended 30 June 2023- - - -
- - - 2.50 - 404
5CASH FLOW RECONCILIATION
30 June 202330 June 2022
$'000$'000
Profit/(Loss)
(10,616) (2,193)
Adjustments for:
Depreciation on property plant and equipment
150 162
Loss on disposal of property plant and equipment
- 5
Depreciation on right-of-use assets
606 648
Amortisation on intangible assets
775 544
Net loss/(gain) on foreign exchange21 5
Impairment of intangible assets7,720 -
Share of loss from equity accounted investments330 548
Movement in current and deferred tax742 (227)
Movements in working capital
(Increase)/decrease in trade and other receivable
51 (326)
(Increase)/decrease in contract assets
(32) (100)
(Increase)/decrease in income taxes receivable(12) 18
Increase/(decrease) in trade and other payables574 357
Increase/(decrease) in provisions(11) 245
Increase/(decrease) in contract liabilities(1,035) 168
####
Net cash inflow/(outflow) from operating activities(737)(146)
- -
6CASH AND CASH EQUIVALENTS
30 June 202330 June 2022
$'000$'000
Current cash on hand / (borrowings)
Cash on hand and at bank
1,178 1,546
Bank overdraft
(949) (330)
Cash and cash equivalents
2291,216
Reconciliation of net profit to net cash flows from operations:
On 24 November 2022, 1,210,662 shares were issued in the rights issue at $0.85 per share. On 1 March 2023, 61,700 shares were issued to staff under the staff
share purchase scheme at $0.85 per share.
9