MNF’s MyNetFone appointed to the Victorian government’s voice services panel
Shares in MNF Group (ASX: MNF) surged more than 6% on Wednesday after the company announced that its subsidiary MyNetFone had been appointed to the voice services panel for the Victorian Government as part of its telecommunications purchasing and management strategy.
The appointment represents a substantial opportunity for the company given that the total fixed voice expenditure by the Victorian Government in 2013 was circa $30 million according to the Victorian Auditor General’s report dated September 2013.
As a consequence of the agreement Victorian government departments and agencies will be able to access innovative and cost-effective voice services from MNF Group’s smart new generation Australian voice network as of February 2017.
Importantly, this is the first time that Victorian government entities have had the opportunity to choose a supplier that specialises in new generation IP telephony through highly reliable and scalable SIP infrastructure.
However, this isn’t new territory for MNF as the company has established a strong reputation in servicing government agencies, forging long-term relationships with agencies in other states.
The appointment is strategically important in that all Victorian budget sector agencies must purchase their voice services from panel suppliers, effectively providing barriers to entry in that client space.
While this news is promising, MNF is trading on a PE multiple of more than 20 as it draws close to its all-time high of $5.03.
In the last 12 months alone its shares have gained 50%, and today’s high of $4.90 represents a premium of circa 10% to the 12 month consensus price target of $4.55.
It should be noted that broker projections and price targets are only estimates and may not be met. Also, historical data in terms of earnings performance and/or share trading patterns should not be used as the basis for an investment as they may or may not be replicated. Those considering this stock should seek independent financial advice.