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Big data pays at Manx Telecom

Manx Telecom's investments in data centres and high-speed broadband paid dividends in 2014
April 14, 2015

Manx Telecom (MANX) tapped into soaring demand for high-speed internet and data by launching a superfast '4G' wireless network, expanding its data centres and rolling out faster broadband last year. But the predominant telco on the Isle of Man stomached listing costs that sent underlying operating profits down 2.8 per cent to £17.6m.

IC TIP: Buy at 186p

Healthy uptake of high-speed broadband largely offset falling landline usage, pushing revenues up 1 per cent in the core fixed-line, broadband and data unit. Sales soared 23 per cent at Manx's global solutions division - which caters to 'off-island' clients - due to strong demand for wholesale voice and text, 'smart' SIM cards and machine-to-machine communication.

Regulatory pricing pressure pushed mobile sales down 4.4 per cent. Nonetheless, strong 4G adoption and package upgrades meant average revenue rose 5 per cent among pay-monthly consumers.

Manx inked a five-year contract with the Isle of Man government, which became the 'anchor tenant' for its Greenhill data centre. It has since signed another large tenant as it looks to expand the facility.

The reported figures were skewed by £8m in listing-related costs. Broker Liberum expects EPS of 12.8p - up from 12.2p in 2014 - and a dividend payout of 10.4p a share in 2015.

MANX TELECOM (MANX)
ORD PRICE:186pMARKET VALUE:£210m
TOUCH:185-187p12-MONTH HIGH:191pLOW: 161p
DIVIDEND YIELD:5.3%PE RATIO:34
NET ASSET VALUE:78p*NET DEBT:61%

Year to 31 DecTurnover (£m)Pre-tax profit (£m)Earnings per share (p)Dividend per share (p)
201033.7-5.3nana
201169.1-0.7nana
201272.43.2nana
201376.00.40.7na
201479.35.75.49.9
% change+4+1470+640-

Ex-div: 28 May

Payment: 25 Jun

*Includes intangible assets of £84.8m, or 75p a share