Shares in MNF Group Ltd (ASX: MNF) spiked higher yesterday after the global provider of voice-based internet communications posted earnings of $8.2 million on revenues of $84 million for the six-months ending December 31 2015.

The result is distorted by the acquisition of the TNZI global wholesale voice business that provides a range of online voice services to enterprise customers worldwide.

As a result of the TNZI acquisition the group carries debt of $15 million, with $10.9 million cash in hand meaning net debt of $4.1 million is negligible at less than half the forecast for a full year net profit of $8.4 million.

The group also retains considerable bank debt facilities to help fund any new potential acquisitions.

The MNF Group earned its wings building Australia’s largest online carriage-grade voice network and then developing software products, voice, and cloud services to cross sell to network users as the global shift to online voice communications accelerated across Australian enterprises.

Entrepreneurial and founder led this tech startup has consistently delivered strong organic growth due to the surging demand for online communications and its software services, while acquisitions have been the other big growth driver.

In Australia and New Zealand MNF Group is now a dominant player on VoIP via its MyNetFone and PennyTel brands among others, with a history of organic growth and proven track record of successful acquisitions such as the iBoss cloud-based billing software deal.

Going global

The most transformative acquisition to date has been the NZ$22.4 million deal to acquire the TNZI business. This means the MNF Group now reportedly delivers around 7 billion voice minutes per year, with an estimated 3% share of international voice traffic.

Wholesale online voice services is a competitive area internationally with big-hitting providers like Verizon, Tata, and Deutsche Telekom, although the fact that ASX small-cap MNF Group is now on the map points to a potentially big future ahead.

The TNZI acquisition also offers the opportunity to lift margins via cost savings and by cross selling high-margin software like iBoss to customers on the TNZI network.

This looks a significant opportunity and organic growth is also possible via capital expenditures on growing the TNZI network’s capacity and geographic reach via point of presence (POP) expansions in the UK and US. This involves the physical connection of equipment such as routers, servers, switchers and digital communication lines that allow wholesale voice over internet communications.

Outlook

The group is forecasting earnings per share of 12.6 cents for the full year, which means it trades on 26x forecast earnings when selling for $3.31 per share. Not cheap, but the stock has consistently traded on a high multiple of forward earnings and has lifted more than 1,000% over the past four years.

While anything like that kind of performance is not going to be repeated, this junior tech stock enjoys the tailwinds of the digital future and shares remain an attractive investment opportunity.

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Motley Fool contributor Tom Richardson owns shares of MNF Group Limited.

You can find Tom on Twitter @tommyr345

Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.