MEDIA RELEASE http://www.mynetfone.com.au/ Contact Us Telephone: (02) 8008 8022 Fax: (02) 8008 8008 Email: pr@mynetfone.com.au Media Announcement My Net Fone Limited (ASX: MNF) 18 th February 2010 MyNetFone announces record half year net profit (NPAT) of $333,460 on gross revenue of $5.76M. 0.63c EPS for the half year Seven consecutive quarters of positive cash flow 3,760% increase of net profit from the same period last year My Net Fone Limited (ASX:MNF), Australia s leading VoIP & IP service provider, is pleased to announce it achieved a record profit (NPAT) of $333,460 and gross revenue of $5.76 million for the half year ended December 31 st 2009, representing increases of 3,760% and 27% respectively from the same period last year. These strong financial results were achieved as a result of a steadily increasing monthly profit and strong organic growth of the business across the entire VoIP and broadband product range. The growth in business enterprise customers with higher ARPU (average revenue per user) has accelerated further with Virtual PBX and SIP Trunk services now numbering over 600 while Naked ADSL subscribers are growing steadily. Another significant development is My Net Fone s customer profile continues to widen with many well known Australian enterprises now customers of My Net Fone, reaffirming My Net Fone as a trusted and credible brand in the market place. With record growth of sales revenue, My Net Fone maintained gross margins at 43% and contained operating expenses at a moderate 18% increase. My Net Fone has increased its cash reserve as a result of top-line revenue growth while maintaining margin and controlling expenses, and has now achieved 7 consecutive quarters of positive cash flow. In addition to offering attractive product bundles, My Net Fone s growth strategy includes the delivery of excellent customer service. A recent internal survey by the company shows over 96% of My Net Fone s customers are either satisfied or very satisfied with its service and would refer their friends, relatives and work colleagues to join the My Net Fone service. The company expects growth to continue, with households increasingly swapping from the traditional telephone line to Naked ADSL bundled broadband & VoIP services; while business customers are finding exceptional value with My Net Fone s Virtual PBX service without having to invest and maintain costly equipment. Other enhanced services including SMS s and multi-party audio conference products continue the trend of upward growth. For more information, visit www.mynetfone.com.au
MEDIA RELEASE http://www.mynetfone.com.au/ Contact Us Telephone: (02) 8008 8022 Fax: (02) 8008 8008 Email: pr@mynetfone.com.au About My Net Fone Limited My Net Fone, ASX (MNF) is Australia s leading provider of fully IP based VoIP, data and video services to residential and business enterprise customers. The company is renowned for providing cost effective, innovative solutions and services with high quality, true flexibility and convenience to its customers. Since its inception, the company has won numerous awards including Sydney City Business Awards, Deloitte Technology Fast 50 and Deloitte Technology Fast 500 Asia Pacific 2009, PC User, Money Magazine and many others. The company made its maiden profit in FY 08/09 and has been cash flow positive for seven consecutive quarters. As of February 2010, MyNetFone has 80,000 customers across all parts of Australia.
Appendix 4D Half year report 31 December 2009 Appendix 4D Half-Year Ended 31 December 2009 CONTENTS Results For Announcement To The Market Half-Year Financial Report Independent Review Report 31/12/2009 Appendix 4D
Appendix 4D Half year report 31 December 2009 Appendix 4D Half-year report My Net Fone Limited Current Reporting Period Half Year Ended 31 December 2009 Previous Corresponding Period Half Year Ended 31 December 2008 Results for announcement to the market $ Revenue from ordinary activities Rendering of services UP 26.9% to 5,760,989 Profit from ordinary activities after tax attributable to members UP 3759.5% to 333,460 Profit from extraordinary items after tax attributable to members Nil Nil Net profit for the period attributable to members UP 3759.5% to 333,460 Dividends (distributions) Amount per security Franked amount per security Nil Nil The Directors do not propose to declare a dividend in respect of the financial year ending 31December 2009. 31 December 2009 31 December 2008 Net Tangible Assets per security $(0.0234) $(0.0329) 31/12/2009 Appendix 4D
My Net Fone Limited Half-Year Financial Report 31 December 2009
Contents to Half-Year Financial Report Corporate Information 1 Directors Report 2 Auditor s Independence Declaration 5 Consolidated Statement of Comprehensive Income 6 Consolidated Statement of Financial Position 7 Consolidated Statement of Changes in Equity 8 Consolidated Statement of Cash Flows 9 Notes to the Financial Statements 10 Directors Declaration 13 Independent Auditor s Review Report to the Members 14 I
Corporate Information This half-year report covers the Group comprising My Net Fone Limited and its subsidiaries. The Group s functional and presentation currency is AUD ($). DIRECTORS Mr. Terry Cuthbertson (Chairman) Mr. Andy Fung (Managing Director) Mr. Rene Sugo (Technical Director) Mr. Michael John Boorne (Non-Executive Director) COMPANY SECRETARY Ms. Catherine Ly (Chief Financial Officer) REGISTERED OFFICE & PRINCIPAL PLACE OF BUSINESS Level 2, 10-14 Waterloo Street Surry Hills - NSW 2010 Australia Phone 61 2 8008 8000 SHARE REGISTER Link Market Services Limited Level 12, 680 George Street Sydney NSW 2000 Australia Phone 61 2 8280 7100 SOLICITORS Collin Biggers & Paisley Level 42, 2 Park Street Sydney NSW 2000 BANKERS Commonwealth Bank of Australia Elizabeth & Foveaux Street Sydney NSW 2010 AUDITORS MNSA Level 2, 333 George Street Sydney NSW 2000 1
Directors Report Your directors submit the financial report of the consolidated group for the half-year ended 31 December 2009. DIRECTORS The names of directors who held office during or since the end of the half-year: Mr. Terry Cuthbertson (Chairman) Mr. Andy Fung (Managing Director) Mr. Rene Sugo (Technical Director) Mr. Michael John Boorne (Non-Executive Director) REVIEW AND RESULTS OF OPERATIONS Review of Operations My Net Fone Limited is pleased to announce today it achieved significant growth of its business for the half year ended December 2009. The following are highlights of the results: 1. Increase in gross revenue Half year ended Half year ended % increase 31 December 09 31 December 08 Gross revenue $5,760,989 $4,540,932 26.9% 2. Increase in EBITDA Half year ended Half year ended % increase 31 December 09 31 December 08 EBITDA $362,305 $39,973 806.4% 3. Increase in gross margin The gross margin continues to grow following the increase in subscriber numbers. Half year ended Half year ended % increase 31 December 09 31 December 08 Gross margin $2,450,829 $1,778,491 37.8% 4. Increase in net profit (NPAT) Half year ended Half year ended % increase 31 December 09 31 December 08 NPAT $333,460 $8,640 3 759.5% 2
5. Operating expenses The operating expenses only increased by 17.8% as a result of productivity and efficiency gains from continuing processes of automation and economies of scale. Operating expenses Half year ended Half year ended % increase 31 December 09 31 December 08 $2,169,983 1,841,265 17.8% 6. Increase in customer number The customer numbers subscribing to MyNetFone service reached 77,000 as of December 2009 December 09 December 08 % increase Customer number 77,000 65,000 18.5% Business results summary My Net Fone has consistently delivered superior value propositions and quality product offerings to its customers, resulting in an increase in customer sign-up and usage of VoIP, broadband and other enhanced services. In addition to the growth of VoIP sign-ups, My Net Fone now has 1000 naked ADSL customers for bundled VoIP and broadband data services and 500 Virtual PBX and SIP trunking business users. It is evident that customers increasingly prefer to sign up bundled broadband and VoIP services to deal with one provider with a single bill, rather than signing up with different providers for a multitude of services in order to minimise multiple handling. In addition, My Net Fone offers voice solutions like 13/1800 numbers and number portability as well as enhances services like SMS s over VoIP account, multi-party audio conferencing facilities, VPN and hosting, which customers especially business users are finding convenient and easy to use. These voice solutions and enhanced services together with VoIP and broadband service provide stickiness to customers and reduce the potential of churn. Business Outlook My Net Fone expects the growth of its business in terms of new sign-ups and usage of service to continue. Customers increasingly have confidence to swap the traditional landline telephone with naked ADSL bundled VoIP and broadband services and do away with monthly line rentals all together which are perceived to offer little value. Business customers find the Virtual PBX service attractive as they do not need to invest in and operate costly PBX equipment. Another attraction of the Virtual PBX service is the ease and versatility of its operations. The company expects to continue signing up residential and business enterprise customers in the remaining half year by promoting a range of VoIP and data services in specific vertical market segments. Internally, the company has adopted a process of constant and incremental improvements across all parts of its business to achieve operational automation and efficiency. The company is on track to deliver profitable growth in the second half of the year and the Directors are comfortable with the cash position. DIVIDEND No dividends were declared or paid since the start of the financial year. No recommendation for payment of dividends has been made. 3
Directors Report (continued) AUDITOR'S INDEPENDENCE DECLARATION The lead auditor s independence declaration under section 307C of the Corporations Act 2001 is set out on page 5 for the half year 31 December 2009. This report is signed in accordance with a resolution of the Board of Directors. Terry Cuthbertson Chairman Sydney Andy Fung Managing Director 18 February 2010 4
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Consolidated Statement of Comprehensive Income HALF-YEAR ENDED 31 DECEMBER 2009 Note Consolidated Group Half Year ended 31 December 2009 Half Year ended 31 December 2008 $ $ Rendering of services 2 5,760,989 4,540,932 Cost of sales (3,310,160) (2,762,441) Gross profit 2,450,829 1,778,491 Finance revenue 2 16,014 22,463 Other Income 2 36,600 48,951 Distribution expenses (72,631) (78,897) Marketing expenses (211,953) (194,543) Occupancy expenses (108,461) (103,319) Employee benefit expenses (1,529,475) (1,292,740) Depreciation expenses (28,845) (31,333) Other Administrative expenses (218,618) (140,433) Profit/(loss) before income tax 333,460 8,640 Income tax expense - Net profit/(loss) after tax from continuing operations Other comprehensive income for the period 333,460-8,640 - Total comprehensive income/(loss) for the period attributable to the members 333,460 8,640 Earnings per share (cents) - basic earnings per share 0.634 0.016 - diluted earnings per share 0.634 0.016 The statement of comprehensive income should be read in conjunction with the notes to the financial statement. 6
Consolidated Statement of Financial Position AS AT 31 DECEMBER 2009 Consolidated Group 31 December 2009 30 June 2009 $ $ ASSETS Current Assets Cash and cash equivalents 1,272,140 1,149,145 Trade and other receivables 150,844 387,756 Other financial assets 62,128 62,128 Total Current Assets 1,485,112 1,599,029 Non-current Assets Other receivables - - Property, plant and equipment Formation cost 108,451 1,950 137,296 1,950 Total Non-current Assets 110,401 139,246 TOTAL ASSETS 1,595,513 1,738,275 LIABILITIES Current Liabilities Trade and other payables 1,612,232 2,204,159 Deferred revenue 978,729 893,172 Provisions 201,162 180,499 Total Current Liabilities 2,792,123 3,277,830 Non-current Liabilities Trade and other payables - - Provisions 35,757 26,272 Total Non-current Liabilities 35,757 26,272 TOTAL LIABILITIES 2,827,880 3,304,102 NET ASSETS (1,232,367) (1,565,827) EQUITY Issued capital 3,990,515 3,990,515 Share based payment reserve 1,048,333 1,048,333 Accumulated losses (6,271,215) (6,604,675) TOTAL EQUITY (1,232,367) (1,565,827) The statement of financial position should be read in conjunction with the notes to the financial statement. 7
Consolidated Statement of Changes in Equity HALF-YEAR ENDED 31 DECEMBER 2009 Issued capital Consolidated Group Retained earnings Share based payment Reserves Total Equity $ $ $ $ At 1 July 2008 3,990,515 (6,775,060) 1,048,333 (1,736,212) Share Placement for the period - - - - Profit for the period - 8,640-8,640 At 31 December 2008 3,990,515 (6,766,420) 1,048,333 (1,727,572) At 1 January 2009 3,990,515 (6,766,420) 1,048,333 (1,727,572) Share Placement for the period - - - - Profit for the period - 161,745-161,745 At 30 June 2009 3,990,515 (6,604,675) 1,048,333 (1,565,827) At 1 July 2009 3,990,515 (6,604,675) 1,048,333 (1,5,65,827) Share Placement for the period - - - - Profit for the period - 333,460-333,460 At 31 December 2009 3,990,515 (6,271,215) 1,048,333 (1,232,367) The statement of changes in equity should be read in conjunction with the notes to the financial statement. 8
Consolidated Statement of Cash Flows HALF-YEAR ENDED 31 DECEMBER 2009 Consolidated Group Half Year ended Half Year ended 31 December 2009 31 December 2008 $ $ Cash flows from operating activities Receipts from customers 6,696,158 5,188,473 Payments to suppliers and employees (6,589,177) (4,968,749) Interest received 16,014 22,463 Income tax paid - - Net cash flows from/(used in) operating activities 122,995 242,187 Cash flows from investing activities Purchase of property, plant and equipment - - Purchase of other financial assets - - Net cash flows (used in)/from investing activities - - Cash flows from financing activities Proceeds from issue of shares - - Transaction costs of issue of shares - - Net cash flows (used in)/from financing activities - - Net increase (decrease) in cash and cash equivalents 122,995 242,187 Cash and cash equivalents at beginning of period 1,149,145 794,341 Cash and cash equivalents at end of period 1,272,140 1,036,528 The statement of cash flows should be read in conjunction with the notes to the financial statement. 9
` Notes to the Financial Statements FOR THE HALF-YEAR ENDED 31 DECEMBER 2009 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of Preparation These general-purpose financial statements for the interim half year reporting period ended 31 December 2009 have been prepared in accordance with the requirements of the Corporations Act 2001and Accounting Standard AASB 134: Interim Financial Reporting. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. This interim financial report is intended to provide users with an update on the latest annual financial statements of My Net Fone Limited and its controlled entities (the Group). As such it does not contain information that represents relatively insignificant changes occurring during the half year within the Group. It is therefore recommended that this financial report be read in conjunction with the annual financial statements of the Group for the year ended 30 June 2009, together with any public announcements made during the half-year. The same accounting policies and methods of computation have been followed in this financial report as were applied in the most recent annual financial statements except for the adoption of the following new and Revised Accounting Standards. Adoption of New and Revised Accounting Standards The Company has adopted the following amendments issued by Australian Accounting Standards Board, which are effective for annual reporting periods beginning on or after 1 January 2009. (i) AASB 8: Operating Segments and AASB 2007-3: Amendments to Australian Accounting Standards arising from AASB 8. AASB 8 and AASB 2007-3 are effective for annual reporting periods beginning on or after 1 January 2009. Application of these standards has not affected any of the amounts recognised in the financial statements, but has affected the segment disclosures provided in Note 5. (ii) Revised AASB 101: Presentation of Financial Statements and AASB 2007-8: Amendments to Australian Accounting Standards arising from AASB 101 (effective from 1 January 2009). The September 2007 revised AASB 101 required the presentation of a statement of comprehensive income and makes changes to the statement of changes in equity, but will not affect any of the amounts recognised in the financial statements. If an entity has made a prior period adjustment or has reclassified items in the financial statements, it will need to disclose a third balance sheet (statement of financial position), this one being at the beginning of the comparative period. (b) Reporting Basis and Conventions The half-year financial report has been prepared on an accruals basis and is based on historical cost. For the purpose of preparing the half-year financial report, the half-year has been treated as a discrete reporting period. The half-year consolidated financial statements comprise the financial statements of My Net Fone Limited and its subsidiaries as at 31 December 2009 (the Group). (c) Going concern The financial report has been prepared on the basis of a going concern. The basis presumes that funds will be available to finance future operations and that realisation of assets and settlement of liabilities will occur in the normal course of business. The Directors believe that the company and the consolidated entity will be able to fund future operations through share issues, the exercising of options, control of costs and the continued growth in its customer base. Notwithstanding the above, the directors acknowledge there are a number of risk factors that materially affect the consolidated entity s future profitability and cash flows. These risk factors were fully disclosed in the 30 June 2009 annual financial statements. The group operates in a very competitive environment where the generation of sufficient profitable business is essential to the continuing operation of the group. 10
` Notes to the Financial Statements FOR THE HALF-YEAR ENDED 31 DECEMBER 2009 The group will operate as a going concern dependent on revenue growth from its customers and the continued support of its shareholders. The financial statements take no account of the consequences, if any, of the effects of either insufficient revenue growth, or, of the inability of the Company to obtain adequate additional funding from its shareholders if required. 2. REVENUE Revenue from continuing operations Consolidated 2009 2008 $ $ (a) Sales Revenue Rendering of services 5,760,989 4,540,932 Total sales revenue 5,760,989 4,540,932 (b) Other Revenue Bank interest 16,014 22,463 Other income 36,600 48,951 Total other revenue 52,614 71,414 Total revenues from continuing operations 5,813,603 4,612,346 3. EARNINGS PER SHARE Earnings used in calculating basic and diluted earnings per share 333,460 8,640 Weighted number of shares outstanding used to calculate basic and diluted earnings per share No. of Shares No. of Shares 52,555,555 52,555,555 Cents per share Cents per share Basic earnings per share 0.634 0.016 Diluted earnings per share 0.634 0.016 4. CONTINGENCIES The Group has provided bank guarantees amounting to $62,128 (2008: $62,128) in respect of leasehold agreements. The guarantees are secured by a Blanket Indemnity given by My Net Fone Limited to St George Bank Limited against any claims, proceedings, losses or liabilities which may arise from these instruments. 5. SEGMENT INFORMATION The Company operates in predominately one segment and one geographical region being the provision of broadband VoIP and other enhanced services and products. 11
` Notes to the Financial Statements FOR THE HALF-YEAR ENDED 31 DECEMBER 2009 6. RELATED PARTY DISCLOSURE The following table provides the total amount of transactions that were entered into with related parties for the relevant financial half year: Related party Half year ended 31 December Sales to related party Purchases from related party Amounts owed by related party Amounts owed to related party Symbio Networks Pty Limited (i) Symbio Wholesale Pty Limited (ii) Symbio Networks Pty Limited Symbio Wholesale Pty Limited 2009 $12,572 $523,756 $4,953 $155,708 2009 Nil $2,946,488 Nil $1,250,243 2008 $44,796 $3,101,893 $3,592 $2,173,166 2008 Nil Nil Nil Nil (i) The Group entered into a technology services agreement which includes provision of platform services, technical support, traffic minutes and customer devices with Symbio Networks Pty Ltd (a director related entity) for a term of 5 years commencing on 1 April 2006. The agreement is at both normal market prices and on normal commercial terms with an agreed pricing structure which gives the Group the ability to benefit from higher volume commitments in order to reduce its cost base. Due to administrative changes, the bulk of the Agreement has now been re-assigned to Symbio Wholesale Pty Ltd starting on 1 May 2009 while the part of the Agreement relating to customer devices remains with Symbio Networks Pty Ltd. (ii) The Group has re-assigned parts of the Symbio Networks Agreement to Symbio Wholesale Pty Ltd starting from 1 May 2009. The Agreement with Symbio Wholesale includes platform resource, technical support and traffic minutes. 7. EVENTS AFTER BALANCE SHEET DATE There were no other significant events after the balance date which may affect the Company s operations or results of those operations or the Company s state of affairs. 12
` Directors Declaration For the half year ended 31 December 2009 The directors of the company declare that: (1) The financial statements and notes as set out on pages 6 to 12 are in accordance with the Corporations Act 2001, including: (a) complying with Accounting Standard AASB 134 Interim Financial Reporting ; and (b) giving a true and fair view of the consolidated entity s financial position as at 31 December 2009 and of its performance for the half-year ended on that date. (2) In the directors opinion there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. This declaration is made in accordance with a resolution of the Board of Directors. Terry Cuthbertson Chairman Sydney Andy Fung Managing Director 18 February 2010 13
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