thoughts on the half year report, page-11

Hi ,
MNF has a very low asset base and considering this when you look at the ROCE it is absolutely phenomenal. (EBIT/Receivables+inventory+other current assets+PPE) -payables.
One may add cash to the denominator if required along with subtracting current liabilities in addition to payables. Whichever way you look at it , this is a stunning ROCE.
Assuming an annualised EBITDA of around 6 million , this is still on a EV/EBITDA of around 20 ( with a ROCE of around 100 (that's being conservative). Note that operating cash flow for the half year is 2.9 mill which is higher than net profit so its not just an accounting profit but real cash coming in.
Also MNF has an operating leverage so by adding more customers on the same asset base ( not needing much capital exp) earnings increase. Acquisitions may add to the goodwill ( which will result in an accounting reduction of ROE)but cash flow should remain robust.