Thursday, 27 February 2020 11:30

Macquarie Telecom delivers ‘eleven halves’ of growth Featured

By
David Tudehope, Macquarie Telecom David Tudehope, Macquarie Telecom

Telecommunications and data centre provider Macquarie Telecom has boosted revenue by 9% to $131.9 million for the half year to the end of December 2019, delivering what the company says is eleven halves of growth as it continues to invest in data centres cloud and security.

With revenue for the six months up from $121.0 million, the company reported EBITDA of $31.6 million - an increase of 24% on 1H FY19 of $25.5 million, but a $0.9 million decrease in net profit after tax.                                  

“Consistent execution of our strategy has delivered eleven halves of profitable growth. We will continue to invest in the megatrends of data centres, cloud and cyber security to drive further shareholder value and ongoing returns,”said Macquarie Group Chairman Peter James.

Chief Executive David Tudehope said, “In January we commenced construction of IC3 East at the Macquarie Park Data Centre Campus to meet the strong demand from corporate and government customers, as well as wholesale customers seeking access to the much sought after Sydney North availability zone”.

“Our continued investment in data centres, cloud and cyber security has increased Hosting’s share of Group revenue contribution over the last three years from 33% to 46% and EBITDA profit from 51% to 69%.”

Macquarie Telecom also reported:

  • Conversion of EBITDA to operating cash flows generated total operating cash flows of $13.9 million during the half-year, including the payment of Income Tax ($3.6 million).
  • The Company has commenced work on the Intellicentre 3 East data centre development, drawing down $7.0 million of the debt facility, a closing cash balance of $6.9 million and undrawn debt facilities of $93.0 million as at 31 December 2019.
  • Net profit after tax (NPAT) of $6.7 million post AASB16, a decrease of 24% on 1H FY19 ($8.3 million).
  • Capital expenditure for 1H FY20 was $23.1 million (1H FY19: $25.0 million) excluding Intellicentre 3 East.
  • Customer Growth Capex was $11.6 million, an increase of 33% on 1H FY19 $8.7 million, reflective of our continued Hosting sales success and product mix.
  • The impact of AASB16 (new lease accounting standard) was to: 

          - Increase EBITDA by $4.0 million from $27.6 million to $31.6 million (excluding AASB16 EBITDA grew 9%)

          - Decrease net profit after tax by $0.9 million from $7.6 million to $6.7 million (excluding AASB16 NPAT declined 7%).

On the outlook for the full year Macquarie Telecom notes:

  • Underpinned by strong sales growth, full year FY20 EBITDA is expected to be approximately $63 to $66 million. ($55 to $58 million pre AASB 16).
  • Telecom continues to win customers from legacy data and IP carriers with our nbn and SD-WAN solution.
  • Cloud Services continue to grow successfully leveraging the hybrid IT megatrend.
  • Continued demand from our Federal Government Agencies for cybersecurity and secure cloud, including from Tier 1 Agencies like ATO, gives great confidence for future growth in the Government business.
  • FY20 Total Capex excluding IC3 is expected to be between $61 to $64 million consisting of:

          - Growth Capex - $14 to $15 million.
          - Customer Growth - $31 to $32 million.
          - Maintenance Capex - $16 to $17 million.

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Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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