Half Yearly Report and Accounts
The Group is in the process of integrating the recent acquisition of Telco-In-A-Box (TIAB). The Company acquired the business assets of TIAB in December 2018 for $33.8m (7.5 x EBITDA) for the purpose of consolidating its large whole customer base into the Domestic Wholesale segment. The corporate restructure of TIAB was completed in H1 FY20 at a once-off cost of $1.3m which has not been included in EBITDA. Consolidation of network and software platforms is ongoing. During the half, the Company also divested two small legacy businesses from TIAB at a margin impact of circa $500K to the Direct Segment. Additionally, TIAB legacy product obsolescence and end-user churn has contributed a margin impact of $2.1m in the half to the Domestic Wholesale segment. Despite these margin impacts and restructure costs, the TIAB business is performing well and is still delivering expectations at the EBITDA level. The TIAB business has delivered considerable benefits to the Group, including addition of new staff to the team, a broad range of quality customers, as well as significant scale and new products to our portfolio.
Overall the board is pleased with the outcome of the acquisition.
Despite the movements due to the integration, the underlying key performance indicators of the business remain strong. Our primary indicator for recurring revenue growth is the numbers on network, which increased 16% on prior comparative period (PCP) to 4,102,284 as of December 2019. Additionally, the business has considerable order volumes for number portability leading into the second half.
The Group remains positive for the medium term as it continues to see very strong demand for its core products - phone numbers with number portability. It is seeing significant organic recurring margin growth from its existing domestic (22% on PCP) and global customers (13% on PCP) as they tackle the opportunities presented to them by the impending completion of the NBN roll-out and ISDN shut-down.
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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: http://mnfgroup.limited/
MNF Group Ltd