Unaudited Preliminary 2018 Results

018 2017 Change 000's 000's % Revenue 8,950 8,345 7.25% Profit from operations before income tax 814 816 - Share of losses from Datagate (409) (411) - Share of losses from Kilimanjaro Consulting (297) (-) - Net Profit after tax 101 657 (20.1) Earnings per share (Cents) 1.3 9.4 Dividends paid per share (Cents) 4.5 5.0 Review of Operations and Outlook Enprise is leveraging its position as the only MYOB EXO and MYOB Advanced reseller with offices in both New Zealand and Australia, to target trans-Tasman businesses. Enprise is well positioned to take advantage of the trend towards cloud while still having a stable, well supported, secure and continually developed on-premises offering. The Australian sales increased by 8.6% to $2 million, whilst New Zealand sales increased by 7.7% to $7 million. Profitability from operations before income tax decreased by 0.2% to $814,000. Net tangible assets per share increased 42% to 21 cents per share. The company paid dividends during the year of 3.5 cents per share in July 2017 and 1 cent per share in January 2018. The total dividend for the year was $339,284 of which $46,326 was reinvested through the dividend reinvestment plan. Datagate had twenty seven paying customers at 31 March 2018 representing annualised recurring revenue of $344,856, a 55% increase from 31 March 2017. The Datagate rights issue in November 2017 was over-subscribed. The total cash raised by Datagate was $685,959 made up entirely of external investors. Enprise chose not to subscribe and consequently Enprise' stake in Datagate reduced to 39.29%. If Enprise' 1,708,333 shares in Datagate were valued at the rights issue price of $1.50 per share, the value of Enprise' Datagate investment would be $2,562,500. The actual carrying value of Datagate is $827,995 after a charge for the year of $408,611. The difference between the carrying value and the value at the last investment round is $1,734,505. Enprise obtained a 47.09% share of Kilimanjaro in September 2017. Kilimanjaro is the largest reseller of MYOB Exo and Advanced in Australia. This was a strategic addition to the portfolio to gain synergies due to the similarities in the business models and to expand Enprise' reach in Australia. To date synergies have already been gained by merging the Finance functions and Kilimanjaro utilising the cloud infrastructure resources that Enprise already possesses. Future synergies are in progress for the consulting and sales divisions of the business. The initial value of the investment was $3,168,400. The carrying value of Kilimanjaro at year end was $2,871,339 after a charge for the year of $297,061. At the time of purchase the Company also granted a put option for the remaining 52.71% for $3,967,964 (2,854,650 ENS shares). The option can be exercised between 1 September 2019 and 30 August 2020. In December 2017 Enprise obtained a 14.6% holding in iSell, which sells a cloud-based quoting system used by the IT reseller market in Australia, New Zealand and the UK. iSell shares the same Managed Service Provider market as Datagate and the two entities could gain synergies in their sales and marketing functions. The initial value of the investment was $736,833. In November 2017 Enprise paid $223,737 for a 6.49% holding in Vadacom, a cloud based VOIP phone and virtual PABX provider. Enprise has a similar target market as Vadacom and both entities have and will continue to leverage off this. End CA:00319346 For:ENS Type:FLLYR Time:2018-06-14 11:37:50