Publicly listed telco services provider MNF Group has entered into a binding agreement to sell its SIM-only mobile provider PennyTel over to wholesale customer Macarthur Telecom.
According to the Australian listed, trans-Tasman communications specialist, the decision to divest the business and brand targeting those over 55 came following a strategic review of its direct businesses.
However, the agreement will allow MNF to still benefit from PennyTel through an ongoing agreement with Macarthur Telecom to continue to grow the customer base on the specialist’s wholesale enablement service, according to financial documents submitted to the Australian Securities Exchange (ASX).
The divesting of PennyTel came amid the specialist’s half year results for the six months ending 31 December 2020, which saw profit after tax reach a new record of 79.3 per cent, to A$6.6 million, when compared to the same period a year ago.
This builds on momentum seen in its FY20 results, which also saw a record profit.
Revenue remained unchanged for the half year at A$112 million, which was largely attributed to the reduction in international travel affecting the specialist’s global roaming business and domestic small business expenditure.
However, MNF Group CEO René Sugo was hopeful that the flattening would only be temporary and would pick up again when international travel resumed and the small business sector’s confidence improves.
The flattening revenue offset the gains seen in its recurring revenue, which was up 15 per cent, year-on-year, to A$55.7 million, with Sugo claiming the specialist’s growth strategy is underpinned by the revenue type.
He also said he was “particularly pleased” with MNF’s global wholesale business, which recorded recurring revenue growth of 55 per cent.
Sugo also provided an update on the specialist’s plans to expand into the Asia Pacific region, with it commencing technology trials with three large global customers in Singapore.
“These trials are the final step before going live in the Singaporean market which we expect to occur later this financial year,” he said. “We have taken a measured approach to ensure we are meeting the highest standard of customer service, consistent with our service levels in the Australian and New Zealand markets.”
MNF is also looking at its options for further APAC expansion, with six potential target countries currently shortlisted.
Sugo was also optimistic for MNF’s future, claiming that the specialist was on track to deliver earnings before interest, tax, depreciation and amortisation (EBITDA) of $40 million to $43 million for FY21.