Inabox buy hits MNF Group financials

Telecommunications software and services provider MNF Group (ASX:MNF) has flagged declines in revenue and profit for the year ending June, citing negative impacts stemming from its acquisition of Inabox Group’s (ASX:IAB) wholesale business, among other factors.

MNF Group’s after-tax net profit fell by roughly 3.9 percent, compared to the year prior, to $11.4 million, the company told shareholders in its annual financial results, released on 27 August. At the same time, revenue declined by about 2.4 percent, to nearly $215.6 million.

The company said its 2019 net profit after tax (NPAT) was negatively impacted by $1.2 million of acquisition costs, associated with the Inabox purchase, incurred during the year. It also flagged amortisation costs of $1.4 million during the year. 

MNF Group struck a deal to acquire the wholesale and enablement business of Inabox Group late last year, in a deal worth between $30.5 million-$35.5 million, ultimately fending off a rival offer for the business by SB&G Telecoms in December. 

The company has touted its successful acquisition as being highly complementary and synergistic with the wholesale business of its Symbio brand. 

“IAB performs a leading role in the Australian wholesale telecommunications market and brings considerable volume and scale to the MNF business. The company is also recognised as the leading provider of SaaS enablement services to the industry – strongly complementing the MNF business,” MNF Group CEO Rene Sugo said when the acquisition plans were announced.

In its latest financials, MNF Group told shareholders that the integration of the business is well underway, with most of the operational teams set to complete integration over the next few months and network integration expected to be finalised by the end of 2020. 

The company also indicated that, although full year revenue had declined, in part due to a decrease in lower margin transactional revenue, its gross profit margin had increased from $69 million in FY18 to $82.5 million this year. 

While MNF Group’s revenue and NPAT figures were slightly down, the company’s underlying NPAT – not including acquisition and amortisation expenses – in 2019 was up by 13 percent, year-on-year, to $15.9 million.

In the same period, the company’s earnings before interest, tax, depreciation and amortisation (EBITDA) grew by 11 percent, to $27.2 million, with FY20 guidance remaining unchanged at $33 million-$36 million. 

Telcos fined $88K for breaking NBN info rules

The Australian Communications and Media Authority (ACMA) has fined seven telcos a combined total of $88,200 for failing to comply with rules aimed at ensuring consumers receive adequate information about their National Broadband Network (NBN) services.

Telechoice, My Net Fone, Aussie Broadband, Activ8me, Flip TV, Mate Communicate and Hello Broadband have all received infringement notices from the ACMA for failing to comply with the Telecommunications (NBN Consumer Information) Industry Standard 2018.

The infringement notices are the first such notices to be issued under the new standard, which requires telcos to provide clear and meaningful information about their NBN plans in their advertising and in one-page key facts sheets, since it came into effect in September last year. 

The standard itself is part of a broader suite of rules drawn up by the ACMA in 2018 in an effort to improve Australian consumers’ experience migrating to the NBN. Among the rules introduced by the ACMA is a requirement of NBN resellers to give consumers the information they need to choose an NBN plan that works for them. 

Other rules introduced by the ACMA require telcos to test that their new NBN services are working, provide an interim service to consumers or reconnect an old service if there are delays in getting a new NBN service working and moving swiftly to resolve consumer complaints. 

The ACMA Authority Member Fiona Cameron said that telcos have had ample time to familiarise themselves and ensure they are in compliance with the ACMA’s NBN rules.

“Failure to comply in this late stage of the NBN rollout is not acceptable and warranted stronger action,” Cameron said.

‘Failing to give consumers clear and honest information about NBN plans is unacceptable and can lead to misleading conduct as recently highlighted by the recent Telecommunications Industry Ombudsman’s report.

“Telcos need to provide information that will assist consumers to choose an NBN plan that suits their needs and if they don’t they will be held to account,” she said. 

The fines come just days after a new report by the Telecommunications Industry Ombudsman (TIO) lifted the lid on the practice of a “small number” of telemarketers misleading and pressuring Australian consumers to sell them NBN services they may not want or need.

In the report, the office of the TIO said that between January and December last year, it received 1,729 complaints about misleading conduct involving services delivered over the NBN.