Datagate venture drives down Enprise profit
- 14 June, 2018 16:01
Enprise Group has seen its net profit after tax (NPAT) take a tumble from NZ$657,000 in the previous financial year to NZ$101,000 for the full-financial year ending 31 March.
The Auckland-based MYOB enterprise software partner reported that revenue was up by 7.25 per cent, to NZ$8.95 million, with Australian revenue in its core operating business growing 8.6 per cent to $1.95 million and New Zealand revenue growing 7.7 per cent to NZ$6.97 million.
Enprise pointed out that the dip in net profit was due to its joint venture in Datagate, which pushed into new markets after securing its first customers in the UK and US.
Datagate provides online reporting and billing portals under a software-as-a-service (SaaS) model for resellers of telco and utility services, and hosted service providers.
Some of the lower profit also stemmed from Kilimanjaro Consulting, which was largely due to the timing of Enprise’s investment.
In September, Enprise invested $1 million in cash and issued NZ$2.1 million worth of shares in exchange for a 47.09 per cent stake in Kilimanjaro Consulting, an Australian MYOB enterprise reseller.
“Kilimanjaro Consulting’s loss for the period reflects the seasonality of its contracted revenue and is in keeping with its performance in prior years," Enprise CEO, Elliot Cooper, said.
"With a large number of renewals due to close before the end of the 30 June Australian financial year, we are expecting a strong start to the New Zealand financial year from Kilimanjaro Consulting,” he said.
Cooper added the business synergies between Enprise and Kilimanjaro are now starting to flow from sharing cloud technologies, marketing and consulting resources across the two companies.
The company claims it is now the only MYOB EXO and MYOB Advanced reseller with offices in both Australia and New Zealand, and is taking a specific aim at trans-Tasman businesses.
In its director’s report to shareholders, Enprise hinted that “future synergies are in progress for the consulting and sales divisions of the business,” and that at the time of purchase, Enprise also granted a put option for the remaining 52.71 per cent of Kilimanjaro for NZ$3.96 million, that can be exercised between 1 September 2019 and 30 August 2020.
Enprise also grew its investments in companies offering complementary software solutions such as iSell, Vadacom and Datagate.
“Enprise is gaining traction in leveraging the customer databases of the invested companies, including Datagate, iSell and Vadacom, for the benefit of all the companies in the group," Cooper added. "We expect more growth, and more profitable growth, as a result of this strategy."
Enprise Group is invested in five businesses; its wholly owned Enprise Solutions that specialises in MYOB EXO and MYOB Advanced software platforms; joint ventures Datagate Innovation and Kilimanjaro Consulting; and holdings in iSell -- an IT reseller business systems provider.
The business also has an interest in Vadacom, which provides cloud phone system software development and unified communications.