Shareholders in computer data centre provider Telecity have seen the value of their investment double in the past year in what is clearly a high-growth business benefiting from the increasing amounts of movies, music and live television heading onto the internet. It's highly profitable, too, as highlighted by a 26 per cent surge in adjusted cash profits in the first half. And, underpinned by free operating cash flow of £42m, the board is paying a maiden 2.5p a share dividend, which is expected to rise to 7.5p for the full year.
Chief executive Michael Tobin said the recent acquisition of Tenue in Finland will help increase capacity in the data centres to 80 megawatts (MW), rising to 130MW when all expansion projects complete. This growth is all demand led, meaning cash profit margins improved 1.5 percentage points to 45.6 per cent, with occupancy up from 80.3 per cent to 81.3 per cent.
Telecity finished the first half with fitted-out operating capacity up 7 per cent to 76,100 square metres, equating to 76MW, and a further 2,100 square metres of capacity opened after the period end. Revenue per square metre has increased by 4.8 per cent to £4,497.
Analysts at UBS forecast full-year adjusted EPS of 30.9p (24.9p in 2011), rising to 37.5p in 2013 and 46.8p in 2014.
TELECITY (TCY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 850p | MARKET VALUE: | £1.7bn | |
| TOUCH: | 850-853p | 12-MONTH HIGH: | 871p | LOW: 424p |
| DIVIDEND YIELD: | 0.3% | PE RATIO: | 35 | |
| NET ASSET VALUE: | 161p* | NET DEBT: | 63% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2011 | 112 | 33.9 | 12.9 | nil |
| 2012 | 137 | 40.1 | 15.4 | 2.50 |
| % change | +22 | +18 | +19 | - |
Ex-div: 15 Aug Payment: 21 Sep *Includes intangible assets of £131m, or 65p a share | ||||
