The Board of Australian communications software specialist MNF Group (ASX:MNF) is pleased to report strong growth for the six months ended 31 December 2017. Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 19% to $11.9m, with net profit after tax (NPAT) increasing by 25% to $6.1m, when compared with the same period a year earlier. Gross Margin for the half increased by 27% to $34.1m, as a result of strong organic growth within the business.

The strong increase in gross profit for the period versus the prior corresponding period is attributable to solid growth in all three operating segments of the business: Domestic Retail, Domestic Wholesale and Global Wholesale:

- The Domestic Retail segment grew 39% and benefited well from the addition of the CCI business for the full first half. Additionally, Small Business margins continued to grow offsetting the slight structural decline in legacy Residential products. The company is seeing encouraging increases in government business. A recent example of this is CCI's New Zealand Government deal, which we expect will deliver new margin streams well into the future.

- MNF has relaunched Pennytel as a national brand to take advantage of a segment we expect will deliver significant future growth, based around our mobile first (MVNO) software platform (see link below).

- The Domestic Wholesale segment grew 17% organically due to the ongoing increase in its recurring revenue streams. Additionally, this segment saw strong growth of 47% in iBoss hosted services, with even larger growth expected in H2.

- The Global Wholesale segment performed very well with 27% organic gross margin growth over the prior corresponding period, it's encouraging to see a changing revenue mix from usage based business to recurring revenue business.

Business Outlook and Guidance:

Leveraging on our existing software platforms which have been enabling mobile services for some time now, MNF will invest up to $3.5m in FY18 to launch Pennytel as a new suite of mobile products under a national brand, operating in the retail segment. "The relaunch of the Pennytel brand represents a unique opportunity for MNF Group to benefit from the mainstream telco market", said CEO Mr Rene Sugo. "Our strategy is to lead with a mobile first product offering based on our Telstra Wholesale MVNO agreement and taking advantage of our vast mobile enablement platform. We will later look to introduce an NBN based product line once the brand is established, and the NBN roll-out has matured to make customer acquisition easier," he added.

MNF sees the Pennytel launch as an enormous opportunity only made possible by MNF's extensive software ecosystem. We are seeking to acquire 250,000 subscribers by June 2020, anticipating an EBITDA contribution of circa $7.9m in that year.

The company has updated its FY18 forecast based on this once-off strategic investment as follows: (see link below).

The MNF Group board remains confident that the company will achieve strong organic growth in the remainder of the year and into the future.

Investor Teleconference:

There will be a teleconference and results presentation held on Tuesday 13 February at 3:00 pm AEDT. For details please check http://www.abnnewswire.net/lnk/BGMUVZ16

A recorded version of this presentation will be made available for later viewing at the same web address.

To view tables and figures, please visit:
http://abnnewswire.net/lnk/VN7VDV41

To view Half Year Investor Presentation, please visit:
http://abnnewswire.net/lnk/1QJ2Y714


About Symbio Holdings Limited

Symbio Holdings Limited (ASX:SYM) is a software company changing the way the world communicates.

Symbio's technology replaces old-fashioned telecom networks with software, making it faster and easier to deliver modern cloud-based communication services, unlocking endless new applications for calling, messaging and phone numbers.

Symbio is the backbone for the global cloud communication industry. Over 500 service providers - from telecom start-ups to the world's biggest software companies - rely on Symbio for the connectivity, quality and expertise they need to solve complex communication challenges.

Headquartered in Sydney, Symbio powers billions of calls and messages each year, owns networks in three countries and employs over 450 staff worldwide.

For more information about Symbio visit www.symbio.global

  

Contact

Miki Kando
Executive Assistant to CEO / CTO
T: +61 2 8008 8231
E: miki.kando@mnfgroup.limited



Link: MNF H1 NPAT up 25%


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