It has been another record year of growth for the MNF Group Ltd (ASX:MNF) (FRA:M2S), with our total numbers on the network growing 18% to 3.8 million phone numbers. We attribute this increase to consumers and businesses moving their voice communications requirements into the cloud. Additionally, many of our established customers are themselves experiencing booming growth which is in turn compounding ours. We expect this trend to continue well into the future based on analyst predictions for the UCaaS, CPaaS and CCaaS markets in Australia and globally.

Strong bottom line growth

This year saw MNF reach new record levels of profitability with EBITDA reaching $27.2m up 11% on prior year (FY18: $24.5m). The year also saw several once-off expenses to do with the large and complex acquisition of Telcoinabox, however underlying NPAT-A grew to $15.9m up 13% on prior year comparable figures (FY18: $14.1m). This led to an underlying EPS-A rise of 12% to 21.7 cents per share (FY18: 19 cps). Cash conversion in H2 was 77% of EBITDA leading the company to finish with $15.5m cash in bank at June 30.

Reaffirmation of FY20 EBITDA guidance

With the acquisition in Telcoinabox behind us and the integration well progressed, this has allowed the company to re-affirm its prior FY20 EBITDA guidance of $33.0m to $36.0m, a forecast growth of 27% at the guidance mid-point.

Strong business performance indicators

Our recurring revenue streams grew 89% to $74m (FY18: $40m), which makes up 34% of our overall revenue mix. These recurring revenue streams are long term, sticky and high margin.

Similarly, our gross margin grew 20% to $82.5m (FY18: $69.0m), with recurring margin streams growing 60% to $49m (FY18: $31m). Our average gross margin generation is now sitting at 38% of revenue, up from 31% from the prior year.

Given recurring margins are generated from very sticky products, this leads to long term stability of gross margin generation and a monotonically increasing margin profile.

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About MNF Group Ltd

MNF Group Limited (ASX:MNF) is one of Asia-Pacific's fastest growing technology companies. Listed on the ASX since 2006, it is now capitalised at around $350M, and twice winner of the Forbes Asia-Pacific "Best under a Billion" award. Headquartered in Sydney, Australia, the company has over 500 people located across Asia-Pacific, Europe and North America. MNF develops and operates a global communications network and software suite enabling some of the world's leading innovators to deliver new-generation communications solutions.

As the world moves to IP, MNF Group is building the brands, services, network and technology to lead the way.

For further information about MNF Group Limited please visit:



Miki Kando
Executive Assistant to CEO / CTO
T: +61 2 8008 8231

Link: Annual Report 2019

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