Webcentral : 2022 Annual Report

2022 ANNUAL REPORT

Webcentral Limited and its controlled entities

FOR THE YEAR ENDED 30 JUNE 2022

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

ABN 21 073 716 793

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 Register

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 Operational Report	7
Directors' Report	27
Remuneration Report	33
Corporate Governance Statement	39
Auditors' Independence Declaration	44
Financial Statements
∙	Consolidated Statement of Comprehensive Income	48
∙	Consolidated Statement of Financial Position	50
∙	Consolidated Statement of Changes in Equity	52
∙	Consolidated Statement of Cash Flows	53
∙	Notes to Consolidated Financial Statements	54
Directors' Declaration	86
Independent Auditors' Report	87
Shareholder Information	91

2

3

Chairman's Address

As Chairman of Webcentral, I am proud to present to you the Annual Report for Financial Year 2022. 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.

The merger brought together the resources and strengths of Webcentral and 5G Networks with the combined business focused on profitable revenue growth. The benefits of the merger are now being realised including integrated product and marketing strategies, one highly motivated team and simplified organisational structure, consolidation onto 5GN's cloud and network infrastructure, and

a consolidated equity and debt capital base and associated corporate cost synergies.

Webcentral has made significant progress in FY22 building on the transformation of the business in FY21 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's continued focus during the year on simplifying the customer journey and purchasing process included website cart development, process automation and customer self-service options

and other innovations such as customer chatbots. These improvements have resulted in increased customer engagement and retention as evidenced by customer satisfaction metrics including Net Promoter Score (NPS) and customer reviews and ratings on third party customer review websites.

Most pleasing has been the return to profitable organic revenue growth following the relaunch of the Company's digital marketing strategy across the Company's brands including Webcentral, Melbourne IT Corporate and 5G Networks. This strategy was the cornerstone of the successful launch of the new .au domain in March 2022.

The significant achievements in FY22 were shown by the Company's strong financial performance with underlying EBITDA growth of 13.5% to $17.6M and revenue growth of 5.5% to $97M for FY22.

The Board's ongoing focus on capital management and returns to shareholders was demonstrated by the resumption of dividends to shareholders, with the Company very pleased to announce a final dividend of 0.5 cents per share for FY22 payable in November 2022. The Company also completed an unmarketable parcel share sale facility for small shareholders during the year.

Looking forward to FY23, 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 FY22.

Yours sincerely,

Joe Gangi

Chairman

"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."

4

5

Managing Director's Report

As Managing Director of Webcentral, I am proud to present our Annual Report on the business operations for Financial Year 2022.

This year has been transformational for Webcentral with the successful integration of the business with 5G Networks following the merger of the companies in November 2021, a return to profitable revenue growth following the implementation of strategic marketing initiatives including new products

and the launch of .au, and continued customer service improvements and simplification of business processes.

In early 2022 a multi-channel marketing initiative was implemented across online and digital, radio advertising and the strategic St Kilda Football Club sponsorship, delivering a significant increase in brand awareness and online traffic.

This initiative was the cornerstone of the successful

.au domain launch in late-March 2022 resulting in 10% of eligible Webcentral customers registering their new .au in the first three months, generating more than $1.2M of sales. These marketing initiatives have also resulted in an uplift in

new customers, growing by over 12%.

The continued simplification and bundling of product offerings resulted in significant organic growth including the 250% uplift in new hosting customers from bundling with new domain name registrations. We have seen hosting products grow from 6% of domain sales to 25%, the refresh of our hosting products and communication 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 automation of customer portals, the launch of 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 than 95% of customers satisfied after contacting our care team. These strategic programs are critical to our ongoing success and will continue to underpin the sustained achievement of profitable revenue growth.

As the largest Australian based online service provider, Webcentral continues to invest in our onshore customer care team with more than 70 people in Melbourne, Sydney, Brisbane and Townsville. further enhancing the customer experience.

Webcentral's strong financial performance in FY22 reflects the successful strategic initiatives implemented during the year, the merger and integration benefits realised and continued focus on cost management, with underlying EBITDA growth of 13.5% to $17.6M achieved in FY22.

Strong organic revenue growth was achieved in domains, email and hosting services delivering overall revenue growth for the company of 5.5% to $97M for FY22. Operating cashflows significantly improved in the second half of FY22 on the back of this revenue growth with underlying operating cashflows of $8.5M for FY22.

In conclusion, I am very excited about the future for Webcentral. Our Board, executive team, and people are committed to delivering and executing our strategy to drive continued growth and deliver improvements for customers, in addition to creating improved shareholder value in the years to come.

I would like to thank our employees for all their commitment and hard work, and our shareholders who continue to back our strategy and enjoy the exciting ride we are on.

Yours sincerely,

Joe Demase

Managing Director

6

7

"We're unashamedly Australian, offering local support and infrastructure to local customers."

An Aussie Brand for Aussie Customers

Webcentral is an Australian owned digital services company and a leading provider of cloud enabling solutions offering businesses a full product suite of innovative and scalable digital services across Australia and New Zealand.

Webcentral services more than 330,000 small and medium businesses (SMB) and 2,500 Enterprise, Wholesale and Government customers, empowering them to grow and thrive in the online world.

Our portfolio of digital services is extensive, with market leading offers across domain management, website development and hosting, office and productivity applications and online marketing.

Webcentral currently owns and operates its own Nationwide highspeed Data Network with points of presence in all major Australian capital cities. In addition, the Company offers managed cloud solutions through its Cloud and Data Centre capabilities as well as managed services to optimise customers' IT and network environments. Supporting this is the Company's combined rack capacity of over 1,000 racks through its owned and operated Data Centres across Melbourne, Sydney, Brisbane and Adelaide.

Our customer focussed heritage has been built on expertise, innovation and personalised service; critical attributes delivered through our culture and embraced by our people. This is demonstrated through more than 25 years of online industry leadership across Australia's digital foundation brands such as Melbourne IT, Netregistry and WME and the 5G Networks brand established in 2017.

The Webcentral mission is dedicated to leading online success for our customers. We achieve this by building trusted and valued client relationships which convert successful business outcomes at each milestone across the customers' digital journey.

Webcentral is proudly Australian as one of the first domain and hosting providers established in 1997 combined with the 5G Networks business established in Melbourne in 2017.

Webcentral's Australian contact centre teams are based in Melbourne, Sydney, Brisbane and Townsville and are available 24 hours a day, 7 days a week to meet the needs of our valuable customers.

Our data centres are located in inner-city and suburban locations in Melbourne, Sydney, Adelaide and Brisbane, providing quick and convenient access for our Enterprise, Government and Wholesale customers.

We're unashamedly Australian, offering local support and infrastructure to local customers.

"Our customer

focussed heritage

has been built on expertise, innovation and personalised service."

8

9