Shares in online voice communications and software business MNF Group Ltd (ASX: MNF) climbed 5% to $5.05 in trade today after the group reported its financial results for the full year ending June 30, 2017. Below is a summary of the results with comparison to prior corresponding periods.
- Net profit of $12.1 million, up 34%
- EBITDA (operating income) of $23.9 million, up 34%
- Revenue of $191.8 million, up 19%
- Earnings per share of 17.32 cents
- Final fully franked dividend of 4.5 cents per share, total dividend 8.25 cents per share, up 18%
This is another strong result from a founder-led digital communications and software business that boasts an impressive track record of double-digit revenue, profit, and dividend growth.
The integration of its big new acquisition in TNZI online voice services also appears to be tracking well, with plenty of growth ahead.
MNF Group operates in three segments providing online voice and software services to retail and enterprise customers across Australia and internationally.
The group is also growing its software offerings (often built in-house) to cross or upsell to clients and has also grown by acquisition over many years. In the past it has bought and integrated junior software businesses to good effect and recently bought a conference call hosting business named CCI.
In the provision of online voice services it could be considered similar to Skype for example and it is now becoming a credible player in a large and evolving digital communications market with a top-tier chief executive and management team plotting its growth.
In terms of risks, MNF Group faces fierce competition from powerful international rivals, while the fast-changing digital technology environment offers both risk and opportunity.
The group did not provide any specific profit guidance other than to emphasise that it's well positioned to deliver strong and sustainable growth over the short and long term.
Given its management team and track record I'm not betting against it and continue to believe the stock is a buy at $5.03 per share, with an exciting future ahead of it.
Others to consider in the software space include Class Limited (ASX: CL1) or Technology One Limited (ASX: TNE), with Class today also reporting some impressive growth.
