MNF Group downgraded

MNF Group (ASX: MNF) have released their half year results. While most ratios are looking good (Profit, for example is up 25% on previous period) there has been a dramatic decline in Operation Cashflow. Some of this can be explained by a reversal of a dramatic increase in cashflow in 2016, but that does not fully explain the decline. Management have chosen no to comment on this cashflow situation, which in itself is puzzling.

We have downgraded MNF to our lowest value level (C3) and have sold a significant part of our holding. The only positive we see is that we realised significant capital gains from these sales. The market shareprice has declined since we sold, so we avoided the unrealised losses which would have resulted.

Unless Management care to clarify the situation, to get a clearer picture of the state of the company we will need to wait till the full-year results are released in six months time .