News Column

Telecity Hikes Dividend 29% Amid Strong European Data Centre Demand

August 4, 2014

Sam Unsted

LONDON (Alliance News) - Data-centres provider Telecity Group PLC Monday posted rises in revenue and pretax profit in its first half on the back of strong demand in the European data-centre market.

The firm said revenue rose 9.3% to GBP174.1 million, from GBP159.3 million a year earlier, with adjusted earnings before interest, taxation, depreciation and amortisation up 11% to GBP81.6 million against GBP73.8m in 2013.

On the back of the results, the company lifted its dividend by 29% to 4.5 pence from 3.5 pence a year ago.

The group said it saw a 3% rise in revenue from its UK arm. It said customer churn levels - meaning cancellations and new sales - were elevated in the first half, but said it expected this will drop in the second half of 2014. Telecity said the first half churn is likely to hit earnings in the second half, but it expects its order book to improve in the medium term.

Results in its Rest of Europe arm proved a big boost to Telecity's first half results, with strong performance continuing in its Amsterdam, Stockholm and Dublin arms and with significant improvement coming in its Frankfurt business. Those four are the biggest revenue drivers in the Rest of Europe unit.

Revenue from the Rest of Europe rose 14% to GBP100.6 million over the period.

Telecity said its acquisitions made over the year in Poland and Bulgaria have been integrated into the wider business, and said its plans to further develop the co-location capabilities of its Turkish unit have moved on, with additional capacity in that business over the year.

The company also said it was making good progress with its Cloud-IX platform, which integrates physical platforms with cloud providers.

"Demand across the European data centre market is strong, and our order wins continue to be encouraging. Our Rest of Europe division is delivering very pleasing growth and whilst our growth levels in the UK have been held back by the anticipated churn during the period, the order intake of that business has improved," said Telecity Group Chief Executive Michael Tobin.

Shares in the FTSE 250 constituent were up 1.3% at 801.00 at the open Monday.

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Source: Alliance News

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