Half Year Report to 31 December 2023

Revenue grew by $0.841m (8.9%), (last year $0.432m (5.1%)) to $10.328m. The Group successfully renegotiated the BNZ commercial loan facility on 1 February 2024. The board is grateful for the continued support of our bankers. Kilimanjaro Consulting Business Kilimanjaro is experiencing a once in a generation opportunity for growth as more and more companies turn to technology to improve efficiency. As the largest player, and a trusted brand in this highly competitive market, we are well positioned to take advantage of this. The settlement of the MYOB dispute (see 28th September 2023 announcement) has seen strong collaboration between Kilimanjaro and MYOB, with both parties working together to maximise these opportunities. MYOB's renewed commitment to their Partner Channel model aligns well with Kilimanjaro's goals. Across all metrics, the business performed well during this 6-month period. These metrics include Growth in Annual Recurring Revenue, Growth in Contracted Revenue, Client Retention, and Client Net Promoter Score (CSAT). The business continues to transition from legacy on-premise software to Cloud software. The attrition rate of existing on premise clients is about 7% per annum. The MYOB Advanced recurring revenue was 84% higher in the 6 months ended 31 December 2023 than it was in the 6 months ended 31 December 2022. The recurring revenue mix between on-premise and cloud is now about 50 / 50. Revenue grew by 8.5% (last year 5.1%) for the 6 months ended 31 December 2023 to $9.650m. Recurring and contracted revenue grew by $0.614m (14.9%) (last year $0.474m (14.4%)) for the period. The loss in the Kilimanjaro division decreased from $0.458m last year to $0.052m in the current period. This year, Kilimanjaro was a finalist in all 5 award categories in MYOB's Annual High Achievers Awards, and was awarded Partner of the Year for 2023. In addition, one of our team was awarded "Consultant of the Year" and we were Awarded the Velixo ANZ partner of the Year. We had an additional 4 members of our team receive community recognition awards. We maintained our Diamond Partner status for the 9th year in a row. This year marks the 13th year of the MYOB awards, and Kilimanjaro has been recognized every year for this entire period. Sales - The 6 months showed a trend of steady improvement in sales recovery, from a slow start in H1 2023 and ended with a significant burst of closed sales of MYOB Advanced, including one of the largest deals in the channel this year. The MYOB Advanced sales pipelines are exceptionally strong, and at all-time highs. The business is highly seasonal, with the second half of the year (January to June) being traditionally our strongest trading period. People - Our core commitment to our people has been reciprocated with very low attrition of our highly valued skilled base. This high attachment is in part due to the commitment we make to our staff from flexibility, work benefits and our unique culture. Along with this, Kilimanjaro is highly visible to the prospective employees within the ERP community as they observe our profile. We are a clear leader in this field and attract the best people in this genre as a result. Future Plans - The general economic conditions in Australia and New Zealand caused many businesses to pause spending. Indications are that this trend is waning, and MYOB research shows 87% of businesses intend investing in technology in 2024 as a pathway to improved productivity. Our strong pipeline of signed deals means that our own productivity will be maintained during the remainder of this year. The lead pipelines indicate that resourcing in our Advanced division will be challenging as this business grows rapidly, with a target of over 45% growth. With our newly established Migrations Division, we have a strong strategy for client retention (Exo base) with a defined strategy to offer a migration path to our MYOB Advanced option. We will continue to seek opportunities for diversification to leverage off our large base of loyal mid-market clients. MYOB Advanced is increasingly becoming the mid-market choice for businesses looking to digitise processes and simplify their business platform environment. The close association between Acumatica and MYOB means that the MYOB Advanced product is now seen as a real alternative in Tier 2 businesses, as well as our traditional market sectors. The software is specifically tailored to the Australia and New Zealand markets, and includes integrated payroll and workforce management systems, giving it a huge competitive advantage. iSell Business Annual recurring revenue (ARR) has increased to $0.57m (up 7%). Total revenue $0.66m (up 18%). Enprise currently owns 72.51% of iSell. Litigation with the former employee was settled during the period. The ITQuoter software has continued to improve in both functionality and robustness, particularly the e-commerce capabilities allowing iSell to engage with large IT and telecommunications companies. Datagate investment Enprise Group's associate, Datagate Innovation Ltd (Datagate) grew its annual recurring revenue (ARR) to over $3.3m, an increase of 22%. Growth in the USA was 20%. Datagate continues to be in high growth mode and is keeping its focus on growing revenue and market share while targeting break even. August 23 was Datagate's first profitable month. Enprise has 2,411,024 shares in Datagate which if valued at the last rights issue price of $2.80 per share, values the investment at $6.751m. As a result of the required accounting treatment where Enprise incurs it's share of the losses incurred by Datagate from investing in and growing the business, this investment is currently held on the balance sheet at approximately $0.86m as at 31 December 2023. Vadacom investment Vadacom Holdings Ltd (Vadacom)'s ARR and contracted revenue was $1.82m for the nine months ended 31 December 2023. The recently released new cloud PBX phone system 'Next Voice' functionality continues to expand to support new and existing customers directly and through resellers. There were 2,930 users of "Next Voice" at 31 December 2023, up 78% from 2022. Significant changes in the state of affairs Dispute with MYOB Kilimanjaro Consulting Pty Ltd ("Kilimanjaro"), has resolved its dispute with MYOB Australia Pty Ltd on terms that will see the parties continue as committed partners in the marketing of the MYOB Advanced and Exo products. The terms, which are confidential, resulted in the termination of the litigation commenced by Kilimanjaro in the Federal Court of Australia, with each party paying its own legal costs. Kilimanjaro is confident that, with this litigation now resolved, it will be able to apply all its energy towards maintaining and growing its position as one of the major Channel Partners of MYOB as evidenced by Kilimanjaro being awarded Partner of the year for 2023. Rights Issue Enprise concluded a 1 for 5 rights issue on 22 September 2023 issuing 2,637,996 new shares ranking pari pasu with the existing issued capital at 50 cents per share which raised $1,318,998 as per the NZX announcement dated 29 September 2023. iSell Rights Issue iSell closed applications for a rights issue on 14 September 2023 at 12 cents per share, which was fully under written subject to confidential conditions. for and on behalf of the board Elliot Cooper 0275615501 ENDS End CA:00427030 For:ENS Type:HALFYR Time:2024-02-28 14:14:28