Telecity benefits from growing digital economy

Telecity Group, a data centre operator, has reported a period of 'robust' trading and has confirmed that earnings for the full year will be in line with market estimates.

Consensus estimates for the full year ending December 31st are for pre-tax profits of £81.66m on revenues of £284.35m. With estimated earnings per share of 30.76p, it is on a forward price earnings ratio of 29.7 for 2012, dropping to 23.6 in 2013.

Growth in the digital economy is driving demand for data centre capacity in Europe and Telecity's total announced capacity across Europe is now 135MW. This expansion will come on-line progressively over the next five years in response to customer demand, and, according to the company, it should provide "significant" medium-term revenue growth potential.

Telecity recently completed a number of key expansion projects, which are now on-line allowing for phased growth in 2013 in each location.

New capacity has been brought on-line in the key London Docklands market and the group has secured additional capacity in Milan.

In addition, it recently strengthened its position in Finland with the acquisition of Academica for €28m in cash. Academica operates data centres in Helsinki, anad has 1MW of operational capacity and a secured capacity pipeline of 3MW. The purchase is a strategic move to establish a leading position in this growing market, the firm said.

Michael Tobin, Chief Executive Officer of Telecity Group, commented: "I am pleased with Telecity Group's progress to date in 2012. Notwithstanding the continuing barriers to entry in all major locations, we have delivered major capacity expansion projects across Europe to underpin future growth.

"I am also particularly pleased with the acquisition of Academica, which together with the previous acquisition of Tenue, has established our leadership position in the exciting Helsinki market place and will allow us to focus on developing core colocation revenues."

Net debt remains at approximately two times expected full year earnings before interest, tax, depreciation and amortisation. The group recently extended its senior debt financing facility to £350m and refreshed the terms of the whole facility for five years.

CM