Mnet expects $1m ebitda for FY11

Mobile applications and services company Mnet Group (ASX:MNZ) expects a 53% increase in gross profit for FY11, on gains from the sale of its caller tones business.

The company advised in a market update that it estimates it earned a gross profit for the year of $8 million, and ebitda of $1 million.

Revenue grew around 34% to approximately $12.7 million, with mobile solutions revenues growing 41% to $2.7 million.

Mnet flagged plans to open an office in the US, after its revenue from international markets - and predominately North America – grew to nearly $2 million.

Earnings were also aided from gains on the sale of Mnet's Ring Back Tones subsidiary to RealNetworks.

The initial purchase price was $1.6 million, and Mnet will be eligible for up to $2 million more by the end of calendar 2012 if certain milestones are achieved.

Mnet ended FY11 with a cash balance of $1.8 million, and advised it had a “healthy” sales pipeline for its services going into FY12.

MNZ shares stayed flat on Friday at $0.031.