Shares in voice over internet, broadband and cloud services business MNF Group Ltd (ASX: MNF) edged higher in morning trade after the group revealed a net profit of $9 million on revenues of $161.2 million for the full year ending June 30 2016.

The business formerly known as My Net Fone Group also delivered a final dividend of 3.5 cents per share to take the full year dividend to 7 cents per share, which is up 22% over the prior year. Earnings per shares lifted 17% to 13.45 cents per share with EBITDA up 46% to $17.8 million.

Management also took the opportunity to aggressively pay down the debt taken on to fund its TNZI acquisition with debt outstanding reduced from $25.3 million to $13.7 million as at June 30 2016. Net debt is now above zero with plenty of cash on the balance sheet.

International horizons

This is the first full financial year that investors are able to see the impact of the group’s TNZI wholesale voice minutes acquisition that is largely responsible for the almost doubling of group revenues.

MNF Group has been investing in building out the physical infrastructure required to support its global voice network and the chief executive suggested the TNZI acquisition is “showing excellent prospects going into FY17”.

Management aims to expand TNZI’s margins through efficiencies and by cross selling other products in its portfolio (such as Symbio) to the network’s users. Notably, MNF Group has successfully looked across The Tasman to New Zealand for growth in a similar way to another tech infrastructure rival named Vocus Communications Limited (ASX: VOC).

ANZ

The only lowlight was the shrinking retail voice over internet business as customers switch from the MNF offering to the National Broadband Network.

The domestic wholesale voice over internet business continues to deliver strong growth with its gross profit contribution up 50% over the last year thanks to organic growth and improving margins. MNF Group has some big ambitions to grow into a global player as a wholesale voice minutes provider and if successful should be able to deliver consistent earnings growth long into the future.

Outlook

The company ticks the boxes as a founder-led technology business that appears able to consistently position itself to deliver double-digit earnings growth without stretching its balance sheet or raising equity. The financials are in good shape and the management team as substantial shareholders have a focus on long-term growth options across a fast-evolving teleco sector.

Thanks to these qualities the stock consistently trades on a high valuation and sells for 30x FY16’s earnings per share at $4.05. This is not cheap, although on any price weakness I am a buyer of the stock as a I believe the company has the potential to grow far larger than its current valuation around $272 million.

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

You can find Tom on Twitter @tommyr345

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.