Webcentral : 2023 Annual Report

2023 ANNUAL REPORT

Webcentral Limited and its controlled entities

FOR THE YEAR ENDED 30 JUNE 2023

Corporate Directory

Directors

Joseph Gangi (Non-Executive Chairman)

Joseph Demase (Managing Director)

Natalie Mactier (Non-Executive Director)

Jason Ashton (Non-Executive Director)

Company Secretaries

Glen Dymond

Michael Wilton

Registered Office and

Principal Place of Business

Level 7, 505 Little Collins Street

Melbourne, VIC, 3000

Tel: [phone]

Company Number

ACN 073 716 793

Country of Incorporation

Australia

ASX Code: WCG

Company Domicile and Legal Form Webcentral Limited is the parent entity and an Australian Company limited by shares

Legal Advisors

Cornwalls

Level 4, 380 Collins Street

Melbourne, VIC, 3000

Share Registrar

Link Market Services Limited

Tower 4, 727 Collins Street

Melbourne, VIC, 3000

Auditors

Grant Thornton Audit Pty Ltd

Tower 5, 727 Collins Street

Melbourne, VIC, 3000

Internet address www.webcentral.au

Contents

Corporate Directory	2
Chairman's Address	4
Managing Director's Report	7
Board of Directors	16
Directors' Report	19
Corporate Governance Statement	34
Auditors' Independence Declaration	39
Financial Statements
∙	Consolidated Statement of Comprehensive Income	42
∙	Consolidated Statement of Financial Position	44
∙	Consolidated Statement of Changes in Equity	46
∙	Consolidated Statement of Cash Flows	47
∙	Notes to Consolidated Financial Statements	48
Directors' Declaration	80
Independent Auditors' Report	81
Shareholder Information	86

2

3

Chairman's Address

As Chairman of Webcentral, I am proud to present to you the Annual Report for Financial Year 2023. The successful merger of Webcentral with 5G Networks Limited in November 2021 completed the integration of the two businesses, creating the largest Australian owned digital services business and operator of fibre networks, cloud and data centres.

This year has been a consolidation period for our SME sector with the successful launch of the .au Top Level Domain (TLD) in September 2022. On the back of this growth of 100,000 new .au domains we have also seen the growth of our SME hosting and email services. We have migrated over 20,000 Microsoft email product users to our internal OX mail platform producing significant margin improvement and we have provided certainty for these users as their previous email product was no longer offered.

In December 2022 we acquired a domains business 'New Domain' and, as the owners, have taken charge of our Melbourne IT brand with a focus on corporate clients providing much needed service and support with brand protection.

Webcentral has made significant progress in FY23 building on the transformation of the business

in FY22 with further improvements to customer journey and support, the successful launch of new product bundles and a major refresh of the Company's digital marketing strategy and continued platform and system improvements to improve customer experience and improve efficiencies.

The company has faced several challenges during the year, which have seen a decline in revenue at one of the Group's data centres servicing the digital currency market and pricing pressure from government contracts. However, the company has seen an improvement in hardware supply chain resulting in faster delivery times and project work across the business.

4

The significant achievements in FY23 is shown by the Company's strong financial performance with revenue growth across the Company's customer segments and 134% improvement in operating cash flows in FY23.

The Board's ongoing focus on capital management and returns to shareholders was demonstrated by the resumption of dividends to shareholders.

Looking forward to FY24, Webcentral is focused on continued organic revenue growth and the ongoing improvement of systems and processes to enhance and simplify customer experience.

On behalf of the Board, I am extremely grateful for the support of our shareholders, customers, suppliers and business partners and thank our Managing Director, staff and executives for their outstanding achievements in FY23.

Yours sincerely,

Joe Gangi

Chairman

"Looking forward to FY24, Webcentral is focused on continued organic revenue growth and the ongoing improvement of systems and processes to enhance and simplify customer experience."

5

"This year has been transformational for Webcentral with the successful integration of the business with 5G Networks following the 6 merger of the companies in November 2021."

Managing Director's Report

As Managing Director of Webcentral, I am proud	than 95% of customers satisfied after contacting
to present our Annual Report on the business	our care team. These strategic programs are
operations for Financial Year 2023.	critical to our ongoing success and will continue to
This year has been transformational for Webcentral	underpin the sustained achievement of profitable
revenue growth.
with the successful integration of the business with
5G Networks following the merger of the companies	As the largest Australian based online service
in November 2021, a return to profitable revenue	provider, Webcentral continues to invest in our
growth following the implementation of strategic	onshore customer care team with more than 50
marketing initiatives including new products	people in Melbourne, Sydney and Brisbane, further
and the launch of .au, and continued customer	enhancing the customer experience.
service improvements and simplification of	Strong organic revenue growth was achieved across
business processes.
the Company's customer segments delivering overall
In early 2023 a multi-channel marketing initiative	revenue growth for the company of 2.9% to $96.1M
was implemented across online and digital, radio	for FY23. Operating cashflows significantly improved
advertising and the strategic St Kilda Football Club	in the second half of FY23 on the back of this
sponsorship, delivering a significant increase in	revenue growth with operating cashflows of $8.0M
brand awareness and online traffic.	for FY23.
This initiative was the cornerstone of the successful	In conclusion, I am very excited about the future
.au domain launch in late-March 2022 resulting in	for Webcentral. Our Board, executive team, and
10% of eligible Webcentral customers registering	people are committed to delivering and executing
their new .au in the first three months, generating	our strategy to drive continued growth and deliver
more than $4.6M of sales. These marketing	improvements for customers, in addition to creating
initiatives have also resulted in an uplift in new	improved shareholder value in the years to come.
customers, growing by over 12%.	I would like to thank our employees for all their
The continued simplification and bundling of	commitment and hard work, and our shareholders
product offerings resulted in significant organic	who continue to back our strategy and enjoy the
growth including the 250% uplift in new hosting	exciting ride we are on.
customers from bundling with new domain name
registrations. We have seen hosting products grow
from 6% of domain sales to 25% of all sales, the
refresh of our hosting products and communication	Yours sincerely,
strategy have led to this significant uplift.
Significant progress has also been achieved in
5G Networks with the successful launch of new
products including Cloudport and the ongoing	Joe Demase
automation of customer portals, the launch of	Managing Director
the Dark Fibre product connecting over 50 Data
centres in Sydney, Melbourne, Brisbane and Adelaide
coupled with simplification of the customer journey.
Continued work on the strategic business
transformation programs initiated in 2021 to
simplify and automate customer interactions have
led to further customer service improvements
efficiencies and have delivered Webcentral's highest
ever customer satisfaction ratings, with more

7

Webcentral provides a broad range of digital services to more than 330,000 Retail, Enterprise and Wholesale customers across Australia, New Zealand, Asia and the USA.

Services /	WWW
Segment
	Domains	Cloud, Email	Data	Networks	Managed	Hardware	Digital
		& Webhosting	Centre	& Voice	Services	& Software	Marketing

Retail

Enterprise

Wholesale

Revenue growth was achieved across all customer segments in 2023:

	98,000		Growth
	96,000
TOTAL	2.9%
94,000	96,138
REVENUE
$'000	92,000
93,428
	90,000

88,000

20222023

8

9