Half Year Report to 31 December 2021

Review of operations and outlook

Enprise achieved excellent revenue growth during the six-month period across its operating divisions (20.7%) and investee entities. Unfortunately, the withdrawal of $756,000 of COVID-19 Australian government assistance, which benefited the prior period only, coupled with a need to significantly increase salaries months earlier than we were able to pass on price increases to customers, saw this growth come at the expense of short-term operating losses. With price increases now implemented and the seasonally stronger second half commencing we expect to see significant improvements in operating performance.

The operating losses will see Enprise breach its BNZ banking covenants. A formal waiver of the breach is being sought from BNZ and management are confident of meeting the BNZ requirements to gain this waiver. With bank debt of $500,000 compared to $1,402,000 cash at bank, we will be able to manage this matter.

Kilimanjaro Consulting business
Following the completion during the period of our “One Company One Team One Brand” transition process, our Enprise Solutions and Kilimanjaro Consulting divisions are now formally operating as Kilimanjaro Consulting. The synergies and economies of scale created have improved Kilimanjaro’s competitive advantage and will enable us to better implement the larger/more complex MYOB Advanced sites.

With over 1,200 unique sites across Australia and New Zealand, Kilimanjaro is MYOB’s largest enterprise reseller/ implementation partner. This broad customer base, which is not limited to any particular industry segment, positions Kilimanjaro well to take advantage of the continuing transition to the cloud whilst still benefitting from a stable, well supported and continually developed on premise offering. Kilimanjaro’s licencing and contracted revenues (excluding implementation services) for the six months was $3,266,600 or 20.1% higher than the six months to 31 December 2020 and is testament to this significant base of long-term clients.

Kilimanjaro recently, for the 11th consecutive year, received the MYOB “Australian Excellence in Business Development” award and continues as one of the few MYOB Diamond Partners.

MYOB’s decision in May 2021 to compete in the sector with its other channel partners like Kilimanjaro, saw MYOB acquire a number of channel partners during the period to 31 December 2021. This has to date had limited impact on Kilimanjaro and we continue to work constructively with MYOB, particularly at the upper end of the enterprise market for the MYOB Advanced ERP product.

iSell business
iSell, with its new SaaS Software platform, grew its licensing revenues by 28.3% compared to the equivalent prior period. iSell is now regularly adding new customers to its cloud platform and is well positioned to add to the 315 customers it had at 31 December 2021. iSell continues to work with its customers to expand its product feature set to meet their requirements. The US sales tax integration, which is expected to be certified shortly, will assist in growing the US customer base from the 2 US customers iSell had at 31 December 2021. iSell needs to grow its customer base significantly to achieve operating profitability but the board believes it is now well positioned to achieve that strong growth.

During the period, Enprise invested around A$55,000 to increase its holding in iSell to 72.2% via the acquisition of shares from minority shareholders at 36.78 cents per share.

Datagate investment
The Board is pleased with the progress of our Datagate investment of which we own 31.95% or 2,010,397 shares. At the last rights issue pricing these shares were worth NZ$4,422,873. This investment is held in the balance sheet at approximately NZ$607,000 at 31 December 2021.

During the period, we advanced NZ$500,000 (of a fully subscribed NZ$1,550,000 convertible note issue) to ensure we maintained our position as the largest shareholder. These funds were to be used by Datagate to enable it to continue its growth whilst simultaneously seeking a significant strategic North American investor.

Datagate had 164 paying customers at 31 December 2021 representing annualised recurring revenue (ARR) of NZ$2.07 million, an increase of 65% over the last 12 months and an even more dramatic 116% in North America. Datagate now has 8 distributors, significantly expanding its sales reach in North America – the current growth engine for the business.

Vadacom investment
Enprise owns only 6.23% of Vadacom which we carry at approximately NZ$687,000.

Vadacom continues to operate profitably and has no debt. During the period Vadacom continued to invest in its new multi-tenanted cloud VoIP solution “Next Voice.” Despite the product requiring more development, Vadacom have 564 extensions deployed at 31 December 2021 and expect to grow this number rapidly in 2022.

Significant changes in the state of affairs

Kilimanjaro Consulting continues to move towards “One Company – One Team – One Brand”. The division is a strategic partner of MYOB and we continue to work constructively with them. Kilimanjaro Consulting is targeting the top end of MYOB products target market, this is currently a market segment MYOB’s direct channel does not service.

Enprise invested AUD 0.055m acquiring shares from existing shareholders in iSell at 36.78 cents AUD per share on 10 December 2021. The acquisition of these shares increased Enprise Group's share of iSell to 72.2%. Elliot Cooper replaced Nick Paul as the acting CEO of iSell from 12 October 2021.


Enprise subscribed $0.500m participating in a convertible note issue for Datagate, which raised NZ$1.550m, being the maximum allowed. The purpose of the convertible note is to enable continued growth while seeking a strategic North American investor. At 31 December 2021, Datagate had annual recurring revenues (ARR) of $2.07 million which represented annual growth of 65%. The ARR growth in North America for 2021 was 116%. If Enprise Group's 2,010,397 shares in Datagate with an unaudited carrying value of $0.607m were valued at the last rights issue price of $2.20 per share, the value of the investment would be $4.423m.

Enprise Group achieved the number six spot in the Absolute IT Supreme Scale-Up awards due to its 30% revenue growth. Enprise Group’s revenue was $3.7 million higher for 2021, to $16.1 million. The results were announced at the Tech Pulse 2021 virtual, interactive launch event. The Absolute IT Supreme Scale-Ups are the Next100 companies (ranked between 101-200 in the TIN200) with the largest revenue growth in the past year.

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