Empired (EPD)

Transcription

Empired (EPD)

BAILLIEU HOLST RESEARCH
6 October 2015
Empired (EPD)
RECOMMENDATIONS
Rating
BUY ▲
Risk
High
Price Target
$1.20
Share Price
$0.85
COMPANY REPORT – INITIATION OF COVERAGE
Rise of the Empired

Overall: We initiate coverage of Empired (EPD) with a BUY rating and
$1.20 price target.

About: EPD is an IT services provider with a diverse range of capabilities
aimed at delivering complete (end-to-end) IT solutions for clients in order
for them to reach their business objectives.

High growth stock: We expect EPD to continue its growth momentum
with FY15A to FY18F sales, EBITDA and NPAT CAGRs of 18%, 29% and
37% respectively. Growth will be underpinned by consolidating and
extracting value from its recent acquisitions as well as capitalising on
positive industry trends which are strongly aligned to EPD’s offering.
BUSINESS DESCRIPTION
EPD is an IT services provider with a diverse
range of capabilities aimed at delivering
complete (end-to-end) IT solutions for clients
in order for them to reach their business
objectives.

High proportion of contracted revenue: EPD has guided to FY16F
revenue in the range of $155m to $175m, up 21% to 36% on the pcp. (Our
estimate is $165m). Approximately 67% of this estimate is already covered
by contracted infrastructure and application managed services, contracted
project work and other work in hand. 50% of EPD’s FY16F revenue is on
multi-year managed service or project contracts. These contracts have an
average weighted contract length of four years.
12-MONTH PRICE & VOLUME

Positive industry trends: We observe positive industry tail-winds and
data supporting the IT services market. This is driven by companies
modernizing or replacing older business systems with cloud-based
software-as-a-service (SaaS). We expect this trend to support growth
across EPD’s core capabilities in cloud services, application development
and integration (incl. ERP, CRM and ECM), data analytics, internet of
things and mobility solutions for enterprise. We also observe indications of
a cyclical upswing, including growth in IT Professional vacancies (a proxy
for labour demand) and material earnings revisions from listed peers.

Valuation and price target: Our blended valuation and price target is
$1.20 ($1.19 DCF, $1.22 EV/EBITDA), using a blended EV/EBITDA (10%
discount to market and comparable peers) and DCF methodology.

Investment risks: The key risks to our investment thesis and price target
include: 1) contract execution with regard to delivery and quality of work
and contract renewal risks from counterparties; 2) loss of key personnel
within particular business segments; 3) acquisitions not delivering
expected returns; and 4) downturn in economic conditions restricting
capital allocated to IT spend.
SNAPSHOT
Monthly Turnover
Market Cap
Shares Issued
52-Week High
52-Week Low
Sector
$6.2mn
$95mn
115.7mn
$0.89
$0.58
Information Technology
RESEARCH ANALYST
Josh Kannourakis
+ 613 9602 9265
[email protected]
Nick Caley
+ 613 9602 9283
[email protected]
Nicolas Burgess, CFA
+ 613 9602 9379
[email protected]
Disclosure
The author owns no shares in EPD.
INVESTMENT SUMMARY
Year End: 30 June
Revenue
$mn
EBITDA
$mn
EBIT
$mn
Reported Profit
$mn
Adjusted Profit
$mn
EPS (Reported)
¢
EPS (Adjusted)
¢
EPS Growth
%
PER (Reported)
x
PER (Adjusted)
x
Dividend
¢
Yield
%
Franking
%
2014 (A) 2015 (A) 2016 (E) 2017 (E) 2018 (E)
68.8
128.3
165.0
190.0
210.0
7.0
11.2
18.1
21.4
24.0
5.0
7.3
13.7
16.3
18.7
3.8
5.3
9.4
11.5
13.7
3.8
5.2
9.4
11.5
13.7
4.3
4.8
8.1
9.9
11.7
4.3
4.8
8.1
9.9
11.7
92.9
12.7
67.9
22.9
18.5
19.4
17.2
10.6
8.6
7.2
19.4
17.2
10.6
8.6
7.2
1.0
0.0
2.0
3.0
4.0
1.2
0.0
2.4
3.5
4.7
100
100
100
100
100
Baillieu Holst Ltd ABN 74 006 519 393 www.baillieuholst.com.au Please read the disclaimer at the end of this report.
Page 1
Empired Ltd (EPD)
Financial summary
Empired
Code:
EPD
Rating:
BUY
Analyst:
Josh Kannourakis
Price Target:
$1.20
Date:
6/10/2015
Upside/downside:
41.7%
Share Price:
$0.85
Valuation:
$1.20
Market Capitalisation:
$99m
Valuation method:
DCF / EV/EBITDA
Year End:
30-June
Risk:
High
PROFIT & LOSS (A$m)
FY14A
FY15A
FY16E
FY17E
FY18E
EARNINGS
Revenue
68.8
128.3
165.0
190.0
210.0
EPS - Underling cash (diluted)
Operating costs
45.8
84.1
108.1
124.2
136.9
EPS Growth - underlying
FY14A
FY15A
FY16E
FY17E
4.3
4.8
8.1
9.9
FY18E
11.7
92.9%
12.7%
67.9%
22.9%
18.5%
Gross profit
21.0
44.2
56.9
65.8
73.1
EPS - Reported (diluted)
4.3
4.8
8.1
9.9
11.7
Other income
2.0
1.7
0.0
0.0
0.0
Diluted shares (m)
89.1
109.9
116.6
116.6
116.6
Corporate costs
16.0
34.8
38.8
44.4
49.1
DPS (cps)
1
0.0
2.0
3.0
4.0
EBITDA
7.0
11.2
18.1
21.4
24.0
Payout Ratio
23.5%
0.0%
24.8%
30.3%
34.1%
Depreciation & Amortisation
-2.0
-3.9
-4.4
-5.1
-5.3
Franking
100%
100%
100%
100%
100%
Impairment
0.0
0.0
0.0
0.0
0.0
FY18E
EBIT
5.0
7.3
13.7
16.3
18.7
VALUATION
FY14A
FY15A
FY16E
FY17E
Net interest
-0.7
-1.3
-1.2
-0.9
-0.4
Underlying cash P/E (x)
20.0
17.7
10.6
8.6
7.2
NPBT
4.3
6.0
12.5
15.4
18.2
PEG
0.21
1.40
0.16
0.37
0.39
Tax
-0.5
-0.7
-3.1
-3.8
-4.6
Price/FCF
-77.0
-14.5
11.5
11.8
7.5
Minorities
0.0
0.0
0.0
0.0
0.0
EV/EBITDA (x)
15.0
10.0
6.1
5.2
4.3
Reported NPAT
3.8
5.3
9.4
11.5
13.7
EV/EBIT (x)
21.0
15.3
8.1
6.8
5.5
Dividend Yield (%)
1.2%
0.0%
2.4%
3.5%
4.7%
Non-recurring items (net tax)
0.0
0.0
0.0
0.0
0.0
Price/Book (x)
2.2
1.8
1.7
1.5
1.3
Underlying cash profit
3.8
5.2
9.4
11.5
13.7
Price/NTA (x)
11.4
22.8
8.6
5.0
3.4
FY14A
FY15A
FY16E
FY17E
FY18E
FY18E
BALANCE SHEET (A$m)
Assets
GROWTH
FY14A
FY15A
FY16E
FY17E
Revenue growth
48.0%
86.5%
28.6%
15.2%
10.5%
36.5%
83.6%
28.5%
14.9%
10.2%
Cash
8.1
9.6
6.4
4.8
9.4
Operating cost growth
Receivables
11.1
26.8
32.2
39.9
44.1
EBITDA growth
94.5%
59.5%
62.4%
17.8%
12.3%
PPE
12.8
22.3
25.1
25.7
26.1
PBT growth
118.6%
39.0%
108.3%
22.9%
18.5%
18.5%
Intangibles
27.8
48.6
48.3
48.0
47.7
Underlying NPAT growth
144.8%
37.9%
79.5%
22.9%
Other assets
6.3
14.1
14.1
14.1
14.1
Reported NPAT growth
144.8%
39.0%
78.1%
22.9%
18.5%
Total Assets
66.0
121.4
126.0
132.5
141.4
MARGINS & RETURNS
FY14A
FY15A
FY16E
FY17E
FY18E
Gross profit margin
30.5%
34.5%
34.5%
34.6%
34.8%
Payables
12.4
24.9
32.0
36.9
40.8
EBITDA Margin
10.2%
8.7%
11.0%
11.3%
11.4%
Finanical liabilities
14.0
22.3
18.3
17.3
13.3
EBIT Margin
7.3%
5.7%
8.3%
8.6%
8.9%
Provisions
2.4
5.0
5.0
5.0
5.0
NPBT Margin
6.3%
4.7%
7.6%
8.1%
8.7%
Tax liabilities
2.8
4.5
4.5
4.5
4.5
ROIC
14.8%
12.1%
15.0%
16.1%
17.4%
Other liabilities
0.0
12.0
6.4
0.9
0.9
ROE
15.3%
12.0%
16.7%
18.1%
18.9%
Total Liabilities
31.6
68.7
66.2
64.6
64.5
ROA
10.3%
7.8%
11.1%
12.6%
13.6%
Effective Tax Rate
12.3%
12.3%
25.0%
25.0%
25.0%
FY14A
FY15A
FY16E
FY17E
FY18E
6.0
12.7
11.9
12.5
3.9
Liabilities
Equity
Share capital
24.4
37.8
37.8
37.8
37.8
GEARING
Retained earnings
9.4
13.6
20.7
28.7
37.8
Net Debt / (cash) (A$m)
Other equity
0.7
1.4
1.4
1.4
1.4
Enterprise value
105.1
111.8
111.1
111.6
103.0
Total shareholders equity
34.5
52.7
59.8
67.9
77.0
Net Debt/Equity (%)
17.4%
24.1%
20.0%
18.4%
5.0%
EBITDA/Net interest
10.3
8.5
15.2
23.0
54.6
Net Debt/EBITDA
0.85
1.14
0.66
0.58
0.16
Operational Data
FY14A
FY15A
FY16E
FY17E
FY18E
Group Revenue
68.8
128.3
165.0
190.0
210.0
BV per share (cps)
38.7
47.9
51.3
58.2
66.0
NTA per share (cps)
7.5
3.7
9.9
17.1
25.1
CASH FLOW (A$M)
FY14A
FY15A
FY16E
FY17E
FY18E
Cash at Start
2.1
8.1
9.6
6.4
4.8
Application Services
35.4
93.7
123.8
146.3
168.0
Cash from from ops
5.3
5.0
15.5
13.7
18.7
Infrastructure Services
31.4
34.6
41.3
43.7
42.0
Capex
-6.3
-11.5
-6.9
-5.3
-5.5
Group Gross Profit
21.0
44.2
56.9
65.8
73.1
Free cash flow
-1.0
-6.5
8.6
8.4
13.2
na
33.7
44.6
52.7
60.5
-1.1
-5.9
7.4
7.2
11.4
na
10.5
12.4
13.1
12.6
Cash flow from investing
-22.6
-23.1
-12.5
-10.8
-5.5
Group Gross Profit margin
31.4%
34.5%
34.5%
34.6%
34.8%
Cash flow from financing
23.3
19.8
-6.3
-4.5
-8.6
na
36.0%
36.0%
36.0%
36.0%
Cash at end
8.1
9.6
6.4
4.8
9.4
na
30.3%
30.0%
30.0%
30.0%
Free cash flow per share (cps)
Page 2
Empired Ltd (EPD)
Investment Overview


We initiate coverage of Empired with a BUY rating and $1.20 price target.
We believe EPD is undervalued in light of its strong growth outlook, high proportion of
contracted revenue, positive industry tail-winds driven by market trends and track record of
execution. On a relative basis, EPD is trading at substantial discounts to listed peers and
we expect this valuation gap to narrow over time.
Initiate with BUY
recommendation and $1.20
price target
High proportion of contracted revenue and robust pipeline

Strong revenue guidance: EPD has guided to FY16 revenue in the range of $155m to
$175m, up 21% to 36% on the pcp. We have adopted the mid-point of guidance, $165m.
Around 67% of this estimate is already covered from contracted infrastructure and
application managed services, project work related to managed contracts and other work in
hand. Therefore, we are comfortable with this estimate despite it being declared at an early
stage in the year.
FIG.1: EBITDA GROWTH: ACQUISITION VERSUS ORGANIC ESTIMATES
250
We assume a revenue
pipeline conversion
rate of ~22%
Mid-point
of
guidance
200
Weighted average contract
length of ~4 years
$55M
$165M
Work to be won
FY16 Revenue
150
$M
$30M
100
$20M
$60M
50
0
Base contracted
revenue
Contracted project work
Work in hand
Source: Company Reports, Baillieu Holst forecasts

Managed services and work in hand: EPD has ~50% of our FY16F revenue estimate
contracted on multi-year managed service and application contracts. We estimate 70-75%
of the contracted revenue base (or 35-37.5% of total revenue) is base contracted
infrastructure and application managed services, with the remaining 25-30% being from
contracted project specific work, generally for managed service clients. Additional work in
hand for the beginning of FY16 was ~$30m, with almost all of this from existing clients.

Project pipeline: The Company expects the tangible FY16 revenue pipeline to be ~$250m
in FY16. We see this growing over coming years as EPD leverages its strength in Microsoft
business solutions and its own “Cohesion” records management software. We currently
forecast a 22% conversion rate on the FY16 pipeline ($55m). However, we note historical
conversion rates have been between 30% to 50%, albeit on a smaller pipeline of work. EPD
has seen strong momentum in conversion rates on contested multi-year contracts. In 2H15,
EPD won $65m of the $100m it contested in multi-year managed infrastructure and
application services contracts.

Weighted average contract length: Currently the aforementioned contracted revenue has
an approximate four year average weighted contract length with the company noting no
major contracts are coming up for renewal in the next two years. The average total contract
length is generally around five years including optional renewal years. We understand
~$50m in long-term contracted revenue was renewed in FY15, hence why the average
weighted contract length is the longest it has ever been.
Page 3
Empired Ltd (EPD)
FIG.2: MAJOR MULTI-YEAR CONTRACT ANNOUNCEMENTS
Date announced
Original contract Description
value
Contract term
Teaming with Oakton, contract to supply cloud‐based Oracle Managed Services to Barrick Gold Corporation 1/08/2013
2 years + options
23/09/2013
$50m
Techincal system transformation program for a major resources company
3 years
31/10/2013
$46m
Contract with Main Roads WA providing IT infrastructure managed services and IT infrastructure project services
5 years
3/03/2015
NZ$12m
Contract with Ministry for Primary Industries NZ to provide cloud‐based and proprietary Enterprise Content Management service 'Cohesion'
6 years
Contract with Toyota Motor Corporation Australia Limited (TMCA) to provide Managed Services across the Microsoft Stack
24/03/2015
28/05/2015
$20m
Contract to provide Application Managed Services to global mining leader Rio Tinto.
3 years + 2 option years
16/06/2015
$15m
Contract to provide Managed Services to InterOil
3 years + 2 option years
18/06/2015
$10m
Contract to provide Infrastructure Managed services and Professional services to a global oil and gas company
30/09/2015
$12m
Contract to provide Managed Services to Electricity Networks Corporation (Western Power) for their IT networks across Western Australia. Plus project services for enhancement and development for network infrastructure.
3 years
3 years + 4 (2+2) option years
Source: Company reports

Compares favourably to peers: We provide a snapshot of EPD’s comparable companies
and their respective revenue analyses looking into contracted and managed services. ASG
Group (ASZ) is more or less a pure managed services business and ranks highest in terms
of managed services. EPD is clear second, with UXC and SMS Management and
Technology (SMX) following in third and fourth respectively. Whilst EPD does deserve to
trade at a discount due to its size; ASZ, SMX and UXC are trading on 36%, 57% and 73%
EV/EBITDA premiums respectively. Different companies refer to these revenue streams
with different wording so the analysis below may not be a completely accurate on a like for
like basis. However, it does demonstrate the strength of EPD’s contracted revenue relative
to its peers and its attractive valuation differential. We note larger players such as UXC and
SMX have managed and contracted services (annuities) as a core strategic growth focus.
FIG.3: COMPARISION OF CONTRACTED AND MANAGED SERVICES
EPD
ASZ
UXC
SMX
356
FY16 Revenue ($m)
165
180
722.6
Contracted Revenue
48%
89%
Increasing
-
Managed Services
36%
89%
-
Increasing
FY16 Revenue Growth
29%
10%
5.3%
4%
FY15 Revenue ($m)
128.3
163
686.4
314.4
Contracted Revenue
50%
85%
29%
-
Managed Services
35%
85%
-
10%
FY15 Revenue Growth
29%
3%
7.0%
13%
Mkt Cap ($m)
95.4
210.9
445.3
359.5
FY16 PE
10.6
14.6
17.1
16.6
FY16 EV/EBITDA
6.1
8.3
9.6
10.6
FY15 Net debt
12.7
11.4
-2.9
-7.5
Source: Company Reports, Baillieu Holst forecasts for EPD, Bloomberg consensus for other companies
Page 4
Empired Ltd (EPD)
Strong track record of earnings growth to continue

EPD has delivered strong historical growth via acquisitions and organic business
expansion. Over the past five years to FY15, it has delivered sales and EBITDA Compound
Annual Growth Rates (CAGRs) of 26% and 59% per annum respectively.

We expect EPD to continue its growth momentum with FY15A to FY18F sales, EBITDA
and NPAT CAGRs of 18%, 29% and 37% respectively. Growth will be underpinned by
consolidating and extracting value from its recent acquisitions as well as capitalising on
positive industry trends (in IT spend) which are strongly aligned to EPD’s service offering.
FIG.4: REVENUE AND EBITDA MARGIN HISTORY
250
11.3%
11.0%
11.4%
11.0%
10.2%
200
12.0%
10.0%
8.7%
150
9.0%
7.7%
8.0%
100
7.0%
5.7%
6.0%
50
5.0%
0
4.0%
FY12A
FY13A
FY14A
FY15A
Revenue
FY16E
EBITDA
FY17E
FY18E
EBITDA Margin
Source: Company Reports, Baillieu Holst estimates

Margin improvement: We expect EBITDA margin expansion of 230bps to drive an FY16F
margin of 11.0% (8.7% pcp) and EBITDA growth of 62%. See FIG.6 for more detail. In
FY14 EPD’s margins were 10.2%, however they declined in FY15 as the company digested
the significant New Zealand based acquisition, Intergen (370 people, $60m revenue), and
wore start-up costs for long-term managed contracts. We have only modelled in a modest
increase in margins medium-term (FY15-FY18F) to reflect the acknowledgement that EPD
has grown exceptionally fast. As with many service based businesses, it may see
challenges in continuing to execute at the same level with a substantially higher headcount.
Having said that, tailwinds are supportive of margin expansion with scale benefits post
acquisitions as well as a higher proportion of application and consulting revenue (which the
company expects to contribute 36% GMs versus 30% for infrastructure services). Thus
margin risks are weighted to the upside, in our view.
FIG.5: NPAT AND EPS GROWTH
16
160%
14
140%
12
120%
10
100%
92.9%
80%
8
67.9%
6
60%
4
18.5%
2
0
40%
22.9%
12.7%
0%
FY13A
20%
0%
FY14A
FY15A
NPAT
FY16E
NPAT Growth
FY17E
FY18E
EPS Growth
Page 5
Empired Ltd (EPD)

Acquisitions driving strong EPS growth: EPD has made four major acquisitions since
listing and acquisitions are likely to remain a source of inorganic growth for the business.
EPD’s acquisitions are strategic in nature and generally provide EPD with additional
capabilities to offer and cross-sell new offerings to existing clients or provide entry into new
geographies (i.e. NZ or East Coast). Importantly, EPS growth remains strong in light of the
new scrip issued for some of these acquisitions. EPS CAGR over the five years to FY15
was an impressive 69%, whilst NPAT CAGR over that period was 92%.

FY15-FY16 EBITDA bridge: We provide a bridge explaining the 62.4% EBITDA growth in
FY16F. We expect a gross profit margin contribution of $12.7m, which represents GM of
34.5% (FY15: 34.5%). EPD noted it has extracted $3m of annualised cost synergies from
the business that will benefit FY16. We understand ~$2.1m in direct cost synergies from the
Intergen acquisition have been extracted and had a ~3mth contribution in FY15. We
therefore expect a further $1.6m EBITDA impact into FY16F from integration cost synergies
and business restructuring. We also expect another $1m EBITDA benefit from existing
office consolidation and lease renegotiations in Melbourne and Perth (~$0.25m impact),
and ~$0.75m from a reversion in abnormally high contract ramp-up costs in 2H15.
FIG.6: FY15 TO FY16F EBITDA BRIDGE
30
$12.7M
25
$-6.6M
$M
20
$1.6M
$1.0M
-$1.7M
Operating cost
reductions
Other income
$18.1M
15
$11.2M
10
5
0
FY15 EBITDA
Gross profit
Corporate costs
Intergen cost
synergies
FY16F EBITDA
Hunter or the hunted?

Hunter: Acquisitions have been central to EPD’s growth strategy and we expect this to
continue. EPD has historically acquired businesses that offer entry into new geographic
markets or serve to strengthen its existing capabilities. Post analysing EPDs offerings
across different market segments we see strong rationale for strengthening its East Coast
Microsoft ERP and business intelligence (big data, data insights) offerings given the strong
growth in demand and strength of Microsoft’s offering in these segments.

Acquisition discipline: Acquisitions are generally structured on multiples of 3x to 4x
EBITDA, with minimum EBITDA hurdles over two years and management lock in periods of
minimum three years.

Successful acquisition track record: EPD’s acquisitions have, on balance, been
successful and created value for shareholders. This is evident in EPD’s strong EPS growth
over this period (69% p.a. over five years). However, we have also analysed EPD’s
headline acquisition prices and EBITDA multiples versus total EBITDA growth forecast into
FY16F. As a result, we estimate ~$10.5m in EBITDA has been added from stand-alone
acquisition earnings, whilst another $5.1m has been generated organically or from
extracting revenue and cost synergies from acquisitions. This in our view validates EPD’s
acquisition strategy.
Page 6
Empired Ltd (EPD)
FIG.7: EBITDA GROWTH: ACQUISITION VERSUS ORGANIC ESTIMATES
25
20
$M
15
$5.1M
$18.1M
Organic growth
FY16F EBITDA
$10.5M
10
5
$2.6M
0
FY12A EBITDA
Acquisition growth

Hunted: EPD has a high proportion of contracted and specifically managed services
revenue. It has a large presence in New Zealand and post recent acquisitions is becoming
one of the larger local Microsoft partners. In addition, Microsoft has strengthening
enterprise software offerings across both large and mid-size enterprise. We believe these
attributes, in addition to EPD’s depressed valuation relative to peers could make it an
acquisition target of a larger local IT services provider or an international player looking for
a foothold into the Australian market. We note that global player Computer Sciences
Corporation (NYSE: CSC, Mkt Cap US$8.7bn) has today (6/10/15) proposed to acquire
ASX listed peer UXC for ~$428m or ~10x FY16F EBITDA. In November 2014, another one
of EPD’s competitors Oakton (OKN) was acquired by Dimension Data (a global IT services
company) for 11.7x forward EBITDA. EPD is currently trading on 5.6X FY16F EBITDA.
FIG.8: EMPIRED ACQUISITION HISTORY
Year Acquired Price Paid
Acquisition Revenue People Geographic
Company
Multiple
Added
Added Presence
2012
(Aug)
Conducive $7.95m ($1.15m from 5m 4x FY13F
EBIT
shares at $0.23 and
remainder in cash )
$9.5m
54
2013
(Sep)
OBS
$15m ($13.9m excluding 4.1x FY14F
assets converted to
EBITDA
cash). Debt and equity
funded. 25m share
placement at $0.62 per
share
$32m
148
2014 eSavvy
(May)
$2.2m
3x FY14F
EBIT
$3.4m
18
2014
(Aug)
$17.4m (subject to
FY15+16 EBITDA
performance consistent
with recent transactions)
$60m
Consistent
with recent
transcations.
We estimate
4x EBITDA.
Intergen
370
Added Capabilites and Rationale
West Coast focus, Application and consulting services to large
headquartered in corporates with speciaist skills in the energy and
Perth
natural resources sectors. Allowed EPD to expand
the breadth of Managed Services offering to
existing and new clients.
East Coast focus, One of Australia's largest Microsoft Enterprise
headquartered in Content Management (ECM) service providers.
Melbourne with
Also provides a range of Microsoft application
offices in Brisbane, consulting servies. Materially increased EPD's
Sydney, Adelaide Microsoft capabilties and ability to provide
and Perth.
Application Managed Services to contest multiyear contracts.
Headquartered in Leading Microsoft Dynamics Customer
Sydney but
Relationship Management (CRM) partner,
national presence Austalian CRM partner of the year 2012,13 and
Microsoft Dynamcis Cloud partner of the year in
2013. Positioned EPD as the largest Microsoft
Dynamics CRM partner in Australia.
Extends EPD's Microsoft application servies
New Zealand
headquartered with portfolio. Namely expands EPD's Microsoft
offices in Sydney Dynamics business, notably in Enterprise
(Aus) and Seattle Resource Planning (ERP) and CRM. Added
proprietary technology "Cohesion", an enterprise
(USA).
contend and records management software.
Furthering of Microsoft relationship given Intergen
provides Microsoft with leading edge solutions via
its Seattle office, which benefits other Intergen
clients. Introduces NZ as a major operating
region, significant governemnt opportunity and
lower cost labour. Intergen received Microsoft
Partner awards in 2007 to 2014 and won Partner
of the Year in 2008, 2010 and 2012.
Source: EPD Company Reports, Baillieu Holst
Page 7
Empired Ltd (EPD)
Supportive market trends

Market size: The Australian IT services market is expected to reach $78.1bn across 2015,
up 2.1% on the pcp, whilst New Zealand is forecast to spend NZ$11.4bn, down 0.8% on the
pcp. This compares to worldwide IT spending, which is expected to decline 5.5% on 2014.
The company estimates EPD’s accessible portion of this market is ~$17bn.

Enterprise market trends: Gartner, the world’s leading technology research firm,
estimates the global enterprise application software market will grow 7.5% in CY15 to
US$150bn and will continue at this growth rate to reach US$201bn by CY19. This is driven
by companies modernizing, functionally expanding or replacing older business systems with
cloud-based software-as-a-service (SaaS). Gartner estimates 15% of businesses are
currently provisioned from the cloud and expected to grow to 60% by 2020. We expect this
trend to support growth across EPD’s core capabilities in cloud services, application
development and integration (incl. ERP, CRM and ECM), data analytics, internet of things
and mobility solutions for enterprise.

Microsoft: EPD is one of Australia and New Zealand’s largest Microsoft Partners delivering
business solutions utilising the Microsoft Dynamics group of products and other Microsoft
software offerings. Microsoft Business Solutions accounts for ~75% of EPD’s Applications
and consulting revenue or 56% of group revenue. EPD has won myriad Microsoft Partner
awards in recognition of its service. See FIG.36.
-
CRM Example: Microsoft has been investing heavily in its Dynamics enterprise
offering which includes CRM and ERP (AX, NAV) software. Anecdotally, EPD has
noted growth in market share domestically as clients seek out cheaper and faster-toimplement alternatives to incumbents such as Oracle and SAP. Our research
supports this view and recent awards judged by industry analysts have favoured
Microsoft peers in Enterprise, Mid-size, small and sales force automation categories.
See FIG.35.
FIG.9: CIO INVESTMENT PRIORITY SURVEY
FIG.10: PREFERRED VENDOR FOR NEXT ERP INVESTMENT
Source: Gartner – CIO trends in IT investment
Source: ICT Enterprise Insights by Ovum Research, 2013

IT services cycle: IT Professional vacancies, as a proxy for labour demand, support our
belief that the IT services sector is currently within a cyclical upswing. FIG.11 below shows
online job vacancies for Australian IT professionals versus the total professional market.
Whilst growth has moderated, job vacancies within the IT sector remains positive as it
begins to cycle tougher comps from the inflection point during April 2014. In our view, this is
a robust indicator of broad based sector health.
Page 8
Empired Ltd (EPD)
FIG.11: ONLINE VACANCIES FOR IT PROFESSIONS (YOY GROWTH %)
50%
40%
30%
20%
10%
0%
-10%
-20%
-30%
Aug-10
Jan-11
Jun-11
Nov-11
Apr-12
Sep-12
Feb-13
Professional
Jul-13
Dec-13
May-14
Oct-14
Mar-15
Aug-15
IT Professional

Improving outlook from listed peers: Many of EPD’s listed IT services peers witnessed
major revisions to forward earnings post FY15 results, which we outline below (FIG.12 to
FIG.15). In our view, whilst not all are direct comparables, this is another positive indication
that sector conditions are improving and supportive of our positive investment view.
FIG.12: SMS EPS REVISIONS
FIG.13: UXC EPS REVISIONS
7
6.5
0.85
1.3
0.75
1.2
6
0.65
5.5
0.11
0.11
0.10
1.1
0.10
0.09
1
5
0.55
0.08
0.45
0.08
0.8
4
0.35
3.5
3
0.25
SMX share price
2016 revised EPS forecast
0.07
0.7
0.07
0.6
0.06
UXC share price
Source: Bloomberg consensus estimates
FIG.14: DWS EPS REVISIONS
FIG.15: DTL EPS REVISIONS
1.9
1.7
1.5
0.18
1.5
0.17
1.4
0.16
1.3
0.15
0.14
1.3
0.13
0.17
0.15
1.2
0.13
1.1
1
0.11
0.9
1.1
0.12
0.11
0.9
0.1
0.7
0.5
Nov‐12
0.09
0.9
4.5
0.09
0.09
0.8
0.7
0.07
0.6
0.05
0.5
0.08
Feb‐13 May‐13 Aug‐13 Nov‐13
DWS share price
Feb‐14 May‐14 Aug‐14 Nov‐14
Feb‐15 May‐15 Aug‐15
DTL share price
Page 9
Empired Ltd (EPD)
Improving balance sheet and free cash flow, dividends to follow

Balance sheet improving: At 30 June EPD had net debt of $12.7m (FY14: $6.0m),
consisting of gross debt (including hire purchase liabilities) of $22.3m and cash of $9.6m.
We expect materially improved operating and free cash flow to drive debt lower and support
a return to paying dividends in FY16 and beyond. The balance sheet is also supportive of
further acquisitive activity.
FIG.16: IMPROVING DEBT POSITION
FIG.17: GROWING FREE CASH FLOW
25.0
2.5
20.0
2.0
15.0
1.5
10.0
1.0
5.0
0.5
15.0
10.0
5.0
0.0
0.0
0.0
FY13A
FY14A
Gross debt
FY15A
FY16E
Net debt
FY17E
FY18E
Debt to EBITDA
-5.0
-10.0
-15.0
FY13A
FY14A
Free cash flow
FY15A
FY16E
FY17E
FY18E
Free cash flow (less deferred consideration)
Page 10
Empired Ltd (EPD)
Valuation

We believe EPD is undervalued in light of its strong growth outlook, high proportion of
contracted revenue, positive tail-winds from market trends and track record of execution.
On a relative basis, EPD is trading at substantial discounts to listed peers and we expect
this valuation gap to narrow over time.

EPD’s PEG ratio using 2 year EPS CAGR estimates is 0.24, compared to 0.90 for the
sector, indicating a compelling valuation for the expected growth outlook.

We value EPD using a blended EV/EBITDA and DCF methodology and our price target is a
50:50 weighting between these methodologies.

A valuation summary is provided below.
FIG.18: VALUATION SUMMARY
Market
Multiple
Prem. /
Disc.
Applied
Weight
FY16F EBITDA
EV
Net Debt Equity
Value
DCF Valuation
Valuation
$1.19
EV / EBITDA
9.5
-10%
8.6
100%
18.1
155.2
12.7
142.5
$1.22
$1.20
Average valuation
Source: Bloomberg consensus estimates, Baillieu Holst estimates for EPD
DCF Methodology


Our DCF valuation for EPD is $1.19 per share.
Assumptions: The assumptions underlying our DCF include a WACC of 11.1%, a risk free
rate of 5.0%, an expected return on the market of 6.0%, a terminal growth rate of 3.0% and
a beta of 1.2.
EV/EBITDA Methodology


Our EV/EBITDA valuation for EPD is $1.22 per share.
Justification: We believe EBITDA is generally a good indication of cash flow for
information technology companies and excludes the impact of varying depreciation and
technology amortisation schedules.
FIG.19: HISTORICAL VALUATION MUTLIPLES
16
14
12
10
8
6
4
2
Nov-05
Nov-06
Nov-07
Nov-08
Current EV/EBITDA
Nov-09
Nov-10
EV/EBITDA +1 forecast
Nov-11
Nov-12
Nov-13
Nov-14
Nov-15
Current Market EV/EBITDA
Source: Baillieu Holst estimates
Page 11
Empired Ltd (EPD)

Comparable listed companies: The IT services sector is the comparable listed company
universe for EPD.
-
The broader market is trading on an FY16 EV/EBITDA of 9.6x with average two year
EPS growth of 9.8%. The IT services sector is trading on an FY16 EV/EBITDA
multiple of 8.3x with a 23% two year EPS CAGR.
-
The IT services sector has on average traded on a 20% discount over the past 10
years and the current average FY16 EV/EBITDA multiple across all IT Services
sector peers was 8.3x. However, the average EV/EBITDA across the most direct
comparable companies based on services offered (SMX, UXC, ASZ, DTL) was 9.6x,
which is in line with the broader market, and a 36% discount to EPD’s current
EV/EBITDA valuation of 6.1x. Whilst EPD may deserve to trade at a discount to this
multiple due to its smaller scale, it also has a higher proportion of managed services
and contracted revenue relative to all other peers except ASZ.
-
Therefore, we adopt an EV/EBITDA multiple of 8.6x for EPD, which represents a
10% discount to the broader market multiple. We justify this based on EPD’s strong
EPS growth relative to the market and favourable industry trends.
FIG.20: IT SERVICES SECTOR
Company
Mkt
Cap
Net
Debt
($)
($m)
($m)
FY16F
Code Price
P/E (x)
EV/EBITDA (x)
EBITDA Margin
FY17F
FY16F
FY17F
FY16F
FY17F
Growth (FY16F)
Sales EBITDA
Growth (FY17F)
PEG
EPS
Sales EBITDA
EPS
2 yr EPS
CAGR
CSG LTD
CSV
1.67
523
126.6
20.4
18.2
13.1
11.1
15%
16%
36%
247%
61%
14%
17%
12%
0.59
UXC LTD
UXC
1.28
429
-2.9
17.1
15.2
9.6
8.7
6%
7%
6%
54%
7%
5%
10%
12%
1.79
SMS MANAGEMENT & TECH SMX
5.22
361
-7.5
16.6
15.4
10.6
9.9
9%
9%
5%
16%
28%
5%
7%
8%
0.94
ASG GROUP LTD
ASZ
1.03
212
11.4
14.6
12.5
8.3
7.6
14%
14%
18%
32%
52%
9%
10%
17%
0.44
DATA#3 LTD
DTL
1.24
191
-102.3
15.5
15.5
10.0
9.1
2%
2%
7%
48%
16%
5%
10%
0%
2.02
DWS LTD
DWS
1.03
136
-5.4
9.0
9.1
5.2
5.5
17%
15%
45%
25%
44%
3%
-5%
-2%
0.48
EMPIRED LTD
EPD
0.85
99
12.7
10.6
8.6
6.1
5.2
11%
11%
29%
62%
68%
15%
18%
23%
0.24
RXP SERVICES LTD
RXP
0.49
68
-12.1
6.9
6.9
3.9
3.2
13%
17%
34%
35%
31%
-3%
24%
0%
0.47
1.1
13.8
12.6
8.3
7.5
11%
12%
23%
65%
40%
7%
12%
9%
0.9
Average
Source: Bloomberg consensus, Baillieu Holst estimates for EPD
Page 12
Empired Ltd (EPD)
Key risks to the valuation range

Contract risks: Whilst EPD has a diverse range of customers, loss of large contracts due
to poor performance or counterparty risks would result in negative impacts to revenue and
earnings. We estimate EPD’s largest contract to contribute ~9% of total revenue and the
second largest to contribute ~5%. Timing risks may also negatively impact revenue and
earnings if contract commencement is delayed by the client for unforeseeable reasons.

People risk: IT services companies are labour intensive businesses and talent
management is central to operational performance. Loss of key personnel within particular
business segments or loss of groups of people within product segments would result in
economic and reputational damage to the firm.

Acquisition risks: One of EPD’s core growth strategies is acquisitions. Acquisitions may
not continue to deliver the level of earnings or generate the expected earnings growth at the
time of acquisition. EPD attempts to mitigate this risk via structuring acquisitions to include
EBITDA hurdles (usually over two years) tied to achieving the full acquisition price.
Management lock-in contracts (minimum three years) to mitigate the risk of losing key
acquired business personnel to some extent, however key business relationships may exist
with personnel that leave the firm after their lock-in period. EPD also tries to diversify
account managers on acquired business relationships to mitigate this risk.

Economic risk: The broader IT services is highly leveraged to general economic activity as
it is reflective of companies’ abilities to allocate operational or investment capital to
information technology spend.
Page 13
Empired Ltd (EPD)
Company overview

Overview: Empired (EPD) is an IT services provider with a diverse range of capabilities
aimed at delivering complete (end-to-end) IT solutions for clients in order for them to reach
their business objectives. The delivery of client objectives is achieved across three core
business segments. Namely, Infrastructure Services, Applications and Consulting (nonMicrosoft) and Microsoft Business Solutions (included in Application and Consulting for
segmental revenue).
FIG.21: SHAREPRICE PERFORMANCE AND MONTHLY TRADED VALUE ($’000) SINCE LISTING
$0.90
6000
$0.80
5000
$0.70
$0.60
4000
$0.50
3000
$0.40
$0.30
2000
$0.20
1000
$0.10
$0.00
1-Oct-07
1-Jun-08
1-Feb-09
1-Oct-09
1-Jun-10
1-Feb-11
1-Oct-11
1-Jun-12
1-Feb-13
1-Oct-13
1-Jun-14
1-Feb-15
0
1-Oct-15
Source: IRESS

History: Empired (EPD) was established in 1999 and listed on the ASX on 19 October
2007 at $0.30 per share with a market capitalisation of $13.9m and FY07 revenue of $7.1m.
The company started with the development of its own talent management software,
BigRedSky. However, it soon morphed into an IT services player with the acquisition of
Tusk Technologies in March 2002; and subsequently divested BigRedSky. CEO, Russell
Baskerville was a founder of Tusk Technologies, which was an IT services company
specialising in planning, design, implementation and ongoing management of IT
infrastructure. EPD subsequently acquired West Coast IT service providers, Quadrant
Group (10/07), Commander Enterprise ICT (2/08) and, the most material acquisition,
Conducive (8/12). It grew its East Coast presence through the acquisition of OBS (9/13)
and eSavvy (5/14). Most recently, it acquired New Zealand business, Intergen (8/14) which
also had operations in East Coast Australia and the USA (Seattle). EPD has transformed
itself from a West Coast business with the majority of revenue coming from the Energy and
Natural Resources sector to a geographically diversified IT services player across all major
industry sectors.
FIG.22: FY13 IT WAS A WEST COAST FOCUSED BUSINESS TO….
FIG.23: FY15…A GEOGRAPHICALLY DIVERSIFIED BUSINESS
6%
31%
East Coast
New Zealand
East Coast
33%
West Coast
USA
USA
30%
100%
New Zealand
West Coast
Page 14
Empired Ltd (EPD)
FIG.24: SECTOR EXPOSURE
Health & Education
Wholesale & Retail Trade
Manufacturing & Transport
ICT
Finance & Insurance
Other
Government
Energy and Natural Resources
0%
10%
20%
FY13
30%
40%
50%
60%
FY15
Source: EPD Company Reports

Infrastructure services (~25% of revenue): EPD manages core IT infrastructure and
applications on behalf of clients, otherwise referred to as managed services. More
specifically, EPD is responsible for managing core information management systems
covering service management, security, servers, communications and networking, 24/7 call
centres and a managed application portfolio across on-premise, public and private cloud
solutions. Management notes typical gross margins are ~30%.

Applications and consulting (non-Microsoft) (~19% of revenue): Application and
consulting services account for ~75% of group revenue with Microsoft Business Solutions
accounting for ~75% of Applications and consulting revenue or 56% of group revenue and
non-Microsoft solutions accounting for 25% of the segment or 19% of group revenue.
Management notes typical gross margins are ~36%. Key offerings include:
-
Cloud services: Empired has developed its own cloud platform called
flexScale, which allows Software-as-a-Service (SaaS), Infrastructure-as-aService (IaaS), Disaster Recovery-as-a-Service (DRaaS) and Backup-as-aService (BaaS). These services can be managed by client organisations or
EPD and provides a highly flexible user or consumption based fee structure.
They can be hosted in a public (e.g. Amazon Web Services (AWS)) or private
cloud if a higher level of security is required. EPD utilises two data centres in
Australia for private cloud and backup services.
-
Identity and access management: Includes the processes and technologies
that allow access to applications or information scattered across both internal
and external systems.
-
Application development and integration services: This includes system
integration, custom web solutions, customer application solutions, legacy
system modernisation, cloud-based modern application development and
packaged solutions.
-
Internet of things (IoT): EPD has a specialty in developing real-time,
integrated and connected systems. IoT solutions include improved
efficiencies, preventative maintenance, safety and regulatory compliance,
remote monitoring and asset tracking.
-
Mobile solutions: Design and delivery of complex mobile applications to
support enterprise business applications through use of EPD’s custom
development capability as well as use of Microsoft SharePoint, Yammer and
Lync to help organisations work together outside the office.
Page 15
Empired Ltd (EPD)
FIG.25: SEGMENT REVENUE SPLIT
100%
90%
80%
70%
60%
50%
73%
75%
FY15
FY16F
53%
40%
30%
20%
24%
10%
0%
FY13
FY14
Application and consulting services
Infrastructure services

Microsoft Business Solutions (~56% of revenue): EPD is one of Australia and New
Zealand’s largest Microsoft Partners delivering business solutions utilising the Microsoft
Dynamics group of products and other Microsoft software offerings. In FIG.26 and FIG.27
we detail Microsoft’s strong market positioning within core enterprise offerings (CRM, ERP)
relative to peers. Key offerings include:
-
Enterprise Resource Planning (ERP): Includes Microsoft Dynamics AX (Enterprise)
and Microsoft Dynamics NAV (Small and Medium business) products. ERP is
business process management software that helps organisations manage financials,
supply chains, manufacturing, operations, reporting and human resources. The
platform integrates various applications that collect, store, manage and interpret data
from aforementioned business units.
FIG.26: GARTNER MAGIC QUADRANT FOR CRM
FIG.27: GARTNER MAGIC QUADRANT FOR ERP
Source: Gartner CRM Market overview, Apr. 2015
Source: Gartner ERP Market overview, November 2014
Page 16
Empired Ltd (EPD)
-
Customer Relationship Management (CRM): The key product is Microsoft
Dynamics CRM, which enables organisations to manage sales, marketing and
service functions. It records and shares all information related to customer interaction
with the goal being to increase sales, improve customer retention and optimise
resources allocated to this function.
-
Enterprise Content Management (ECM): The key product is Microsoft SharePoint,
which is a collaboration and document management platform.
-
Mobile solutions: Design and delivery of complex mobile applications to support
enterprise business applications through use of EPD’s custom development
capability as well as use of Microsoft SharePoint, Yammer and Lync to help
organisations work together outside the office.
-
Cloud services: Cloud computing essentially refers to the outsourcing of computing
functions, which include storage, Central Processing Unit (CPU) functions or
applications (including the Microsoft applications referenced above and other
important enterprise products like Microsoft Office 365). Azure is Microsoft’s platform
for building and deploying cloud-based applications, delivering organisations ondemand computing and storage capabilities. All of these capabilities are hosted in
Microsoft’s data centres here in Australia, which is a key point of difference relative to
enterprise software competitors such as SAP and Oracle.
FIG.28: GARTNER MAGIC QUADRANT FOR ECM
FIG.29: GARTNER MAGIC QUADRANT FOR BUSINESS
ANALYSTICS
Source: Gartner ECM Market overview, Sep. 2014
Source: Gartner Business Analytics Market overview, Feb. 2015
-
Business intelligence and data insights: Key product is the Microsoft SQL Server
Database Management System (DBMS) which work in conjunction with specific
business intelligence applications such as Microsoft Power BI to mine the data from
enterprise applications (e.g. ERP) to generate insights to influence business
decisions. EPD has a particular strength in real time data collection and analytics.
-
Internet of things (IoT): EPD utilises Microsoft’s Azure IoT Suite to harness data
across things, people, processes, assets within organisations. Typical benefits
include improved efficiencies, preventative maintenance, safety and regulatory
compliance, remote monitoring and asset tracking.
-
Application development and integration services: This includes system
integration, custom web solutions, customer application solutions, legacy system
modernisation, cloud-based modern application development and packaged
Page 17
Empired Ltd (EPD)
solutions. EPD customises business solutions for clients using the full range of
Microsoft enterprise software. It utilises Microsoft software in conjunction with its own
customised applications (IP), such as Cohesion, which is a templated, standardised
document and record management service based on Microsoft SharePoint
technology that has a range of service packages and is offered on a pay per user,
per month basis. Gross margins on annuity streams from the Cohesion product are
estimated at ~50%.

Landscape of service providers: Below we provide an overview of some of the key
competitors across EPD’s revenue segments.
FIG.30: AUSTRALIAN AND NEW ZEALAND IT SERVICES COMPETITORS
Infrastructure
Application and Consulting Servcies
Global players: CSC, Dimension Data, IBM,
Fujitsu, Wipro, HCL, Infosys, NEC,
Accenture/Avanade, Deloitte, HP
Global players: CSC, Dimension Data, IBM,
Fujitsu, Wipro, HCL, Infosys, NEC,
Accenture/Avanade, Deloitte, HP
Local players: ASG, Kinetic IT, UXC, Data #3
Local players: UXC, SMX, Readify, Insync,
Kloud, Ignia, Frame Group
Source: Baillieu Holst
Supporting financial information

Material 1H/2H EBITDA skew: EPD estimates its typical EBITDA 1H/2H skew would be
approximately 33% to 40%. The natural skew is due to more workable hours available in
the 2H and the June quarter typically being the largest quarter with year-end utilisation
rates often running around ~95%. In addition, in previous years EPD has noted this has
been exaggerated due to ramp up costs of highly material contracts in the 1H.
FIG.31: AUSTRALIAN AND NEW ZEALAND IT SERVICES COMPETITORS
FY14 ($m)
1H14
2H14
FY14
1H Skew
2H Skew
Operating Revenue
29.0
37.8
66.8
43%
57%
Reported EBITDA
1.1
5.9
7.0
16%
84%
Reported NPAT
0.0
3.8
3.8
-1%
101%
FY15 ($m)
1H15
2H15
FY15
1H Skew
2H Skew
Operating Revenue
50.5
77.9
128.3
39%
61%
Reported EBITDA
3.8
7.3
11.2
34%
66%
Reported NPAT
1.2
4.1
5.3
23%
77%
Source: Baillieu Holst
Page 18
Empired Ltd (EPD)
Appendix A
Board of Directors
FIG.32: BOARD OF DIRECTORS
Name
Position
Biography
Mel Ashton
Non-Executive Chairman

Chartered accountant with over 25 years’
experience in a wide range of industries, notably
specialising in Corporate Reconstruction.

Is a Fellow of the Australian Institute of Company
Directors and Institute of Chartered Accountants in
Australia.

Regional councillor and former state chairman of
the WA branch of Institute of Chartered
Accountants.

Director and Vice President of Fremantle Football
Club.

Chairman of Venture Minerals, Gryphon Minerals
and Empire Beer Group.

Joined the board in 2008, and currently MD of Cool
Clear Water Group, an unlisted public company
within the water services sector.

Previously MD and CEO of Lifecare Health Limited,
and has also been involved in a number of
businesses in the healthcare, construction and
engineering, mining technology and information
services sectors. Roles include operational
management, implementing organic growth
strategies and acquisitions, and assisting with
capital raisings.

Non-executive director of eHealth Networks, a
provider of services in the health care industry;
member of the Australian Institute of Company
Directors.

Long career in financial services and IT sector. 4.1m ordinary
Previously Head of IT Services at Bankwest;
Managed Services Director at Unisys West and
more recently, GM of Delivery Services at Empired.

Also provides management consulting expertise to
the financial services, IT and Utilities sectors via his
own consulting practice.

Director of Community West, a provider of
professional services to the aged healthcare sector
across Western Australia.

Holds a Bachelor of Business and a Graduate
Diploma in Applied Finance and Investment.
Graduate Member of the Australian Institute of
Company directors and a Fellow of the Financial
Services Institute of Australasia.

Extensive executive and corporate advisory 17,000 ordinary
experience in Human Resources across a broad
range of industries.

Led the Group HR function for Wesfarmers
(ASX:WES) for 10 years, including the integration of
the Coles Group acquisition. Currently runs
advisory practice and advises boards and CEO’s on
HR strategy, executive remuneration and executive
talent management.

Previously independent director of
Development Group (ASX:RDG).

Holds a Bachelor of Business, is a graduate
member of the Australian Institute of Company
Directors, a Fellow of the Australian Institute of
management and a Fellow of the Australian Human
Resources Institute.
Richard Bevan
John Bardwell
Chris Ryan
Non- Executive Director
Non-Executive Director
Non-Executive Director
Shareholding
Resources
Page 19
Empired Ltd (EPD)

Is Adjunct Professor within Curtin University’s
Business School.
Russell
Baskerville
Managing Director

See FIG.33 (Management)
8.25m ordinary
Mark Waller
Company Secretary and
CFO

See FIG.33 (Management)
1.7m ordinary
FIG.33: MANAGEMENT
Name
Position
Biography
Shareholding
Russell
Baskerville
Managing Director

Over 10 years of IT Industry experience.
8.25m

Founding member of Tusk Technologies which was
subsequently acquired by Empired in March 2002.

Founder and MD of Procom Solutions and Procom
Holdings. Procom Holdings provides technical
service and support to merchant banking facilities
on behalf of larger banks in Australia.

Currently a non-executive director of Procom
Holdings Pty Ltd and BigRedSky Limited.

Joined Empired in 2005 and CFO since 2007.
Previously worked for Ernst & Young and ran sole
businesses in London, UK.

Holds a degree in business from Curtin University
majoring in Accounting and Business Law and is a
CPA.

Over 25 years’ experience in the ICT industry with a 325,000 ordinary
broad background in IT service management,
consulting practices and sales and delivery.

Previous experience encompasses National Sales
and Delivery Manager for ASG, senior leadership
positions with CSC and partner with Unisys West in
large fixed price projects.

Appointed COO in 2011.

Has over 25 years’ experience in the IT industry.
Involved in operational delivery, consulting services,
presales, account management and commercial
management within organisations such as
Computer Sciences Corporation and Unisys.

Has been instrumental in the development of
solution strategies and services with State and
Federal Government and within the Energy and
Natural Resources sector.

Is currently focusing on refining and enhancing the
company’s infrastructure services portfolio.

Co-founded and was MD for technology and
consulting firm, Conducive that was subsequently
acquired by Empired in 2012. Prior to that was
Chief Engineer at Ripple Systems and also
provided leadership for complex road and rail
monitoring and control systems projects within
Australia and internationally.
Mark Waller
Rob McCready
Brett Gresele
Darren
Christophersen
Chief Financial
Officer/Company Secretary
Chief Operating Officer
General Manager,
General Manager,
Operations, Applications &
Consulting
Page 20
Empired Ltd (EPD)

Co-founder of technology and consulting firm,
Conducive. Previously run both large programs of
work and held senior management roles within the
mining,
telecommunications,
publishing
and
banking sectors.

Has a strong background in Project and Program
management and has worked in a number of
countries within a wide range of world class firms.
General Manager, Business 
& Productivity Solutions
More than 25 years’ experience in the technology
sector. Previously CEO of Intergen prior to it being
acquired by Empired, and Executive General
Manager of consulting technology firm, Oakton for
seven years.

Has held numerous leadership roles within the
technology sector in Australia, New Zealand,
Europe and the US.

Holds a Masters in
(Macquarie University).

Over 20 years’ experience in the IT industry notably
in strategy development, business leadership,
business consulting and a special technical skill set
in the Enterprise Resource Management space.

Has held senior positions in major New Zealand
companies with a background in finance and
accounting. Partner with Ernst & Young, and
director of CGNZ Middle Market Solutions prior to it
being acquired by Hewlett Packard.
Stuart Strickland General Manager, PMO,
Applications & Consulting
Mike Morgan
Simon Bright
Chief Executive Officer,
New Zealand
Business
Administration
FIG.34: SUBSTANTIAL SHAREHOLDERS
NAME
Australian Ethical Investment POSITION
%
13.65
11.9%
Russell Baskerville 8.25
7.2%
Thorney Investment Group 8.02
7.0%
Contango Asset Management Ltd 5.86
5.1%
Source: Iress
Page 21
Empired Ltd (EPD)
Appendix B
TH
FIG.35: CRM MAGAZINES 15
ANNUAL CRM AWARDS (JUDGED BY INDUSTRY ANALYSTS)
Source: CRM Magazine sourced online
Page 22
Empired Ltd (EPD)
FIG.36: EMPIRED AWARDS
2015 Microsoft Country Partner of the Year Award - New Zealand
2015 Microsoft Customer Relationship Management (CRM) Partner of the Year - New Zealand
2015 Microsoft Enterprise Resource Planning (ERP) Partner of the Year - New Zealand
2015 Microsoft APAC Platinum Club
2014 iAwards (South Australia): Health category
2014 MAPA Finalist: Customer Relationship Management and Collaboration and Content
2014 Microsoft Inner Circle status for Microsoft Dynamics
2014 Microsoft Preferred Supplier Program (MPSP) Excellence Awards - Brand Value
2013 MAPA Microsoft Partner of the Year Award for Dynamics CRM
2013 Microsoft Dynamics Inner Circle
2013 Microsoft Dynamics President’s Club
2013 Microsoft Dynamics Cloud Partner of the Year Worldwide
2013 Microsoft Asia Pacific Public Sector Partner of the Year - New Zealand
2012 MAPA Microsoft Dynamics CRM Partner of the Year
2012 BRW Best Places to Work Australia
2012 Microsoft APAC Platinum Club - Solution Partner Category - New Zealand
2012 Microsoft APAC Platinum Club - Subsidiary Partner of the Year - New Zealand
2011 Microsoft Windows Azure Platform Solution of the Year
2011 Microsoft Presidents Club status for Microsoft Dynamics
2010 Microsoft Australian Education Partner of the Year
2010 EPiServer International (outside Europe) Partner of the Year
2010 Microsoft Citizenship Solution of the Year
2010 Microsoft Portals and Collaboration Solution of the Year
2009 JRA/Unlimited Best Places to Work - Top 5
2009 Microsoft Business Productivity Enterprise Content Management Solution of the Year
2008 Microsoft Partner of the Year
2008 Microsoft Software Plus Services Product of the Year
2008 JRA/Unlimited Best Places to Work – Top 5 (also in top 10 in 2001, 2002, 2003, 2007)
2008 EPiServer International Partner of the Year
2007 Microsoft Partnering Award
Source: Company website
Page 23
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Participant of ASX Group
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Page 24

Empired (EPD)

Transcription

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