The tussle for Telecity (TCY) between Dutch peer Interxion (INXN) and US rival Equinix (US:EQIX) didn't faze the data centre giant. Not only did management agree a sale to Equinix, but a combination of cost discipline and surging demand for data storage fuelled a 7 per cent rise in adjusted cash profits for the six months to 30 June.
Although Telecity boosted its capacity by 5 per cent to 117 megawatts, the proportion of power sold swelled to over 75 per cent. The group's efforts to retain customers helped to lower churn by 5.1 percentage points to 6.3 per cent. Coupled with a steady stream of orders, that drove a 5 per cent rise in underlying sales in the UK.
Like-for-like revenue rose 12 per cent at Telecity's operations outside the UK, which comprise data centres in 10 European cities. A strong showing in Amsterdam and the restructuring of the Helsinki business served to widen the division's adjusted cash profit margin by 2.2 points to 48.5 per cent.
Management hopes to complete the first phases of new centres in Amsterdam and Dublin later this year. They expect the Equinix deal to close by next summer, but expect total dealmaking costs of up to £70m, including a £15m break fee owed to the rebuffed Interxion.
Analysts at Bank of America Merrill Lynch expect 2015 EPS of 39.5p (from 34.8p in FY2014).
| TELECITY (TCY) | ||||
|---|---|---|---|---|
| ORD PRICE: | 1,086p | MARKET VALUE: | £2.2bn | |
| TOUCH: | 1,085-1,087p | 12-MONTH HIGH: | 1,130p | LOW: 653p |
| DIVIDEND YIELD: | 1.3% | PE RATIO: | 86 | |
| NET ASSET VALUE: | 191p* | NET DEBT: | 79% | |
| Half-year to 30 Jun | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2014 | 174 | 50.0 | 18.8 | 4.50 |
| 2015 | 173 | 14.8 | 1.9 | 5.00 |
| % change | - | -70 | -90 | +11 |
Ex-div: 6 Aug Payment: 18 Sep *Includes intangible assets of £146m, or 72p a share | ||||
