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Interim Management Statement
Telecity Group plc, Europe’s industry-leading provider of premium carrier-neutral data centres, today issues the following Interim Management Statement.
- Trading remains strong and management confirm their positive outlook
- The pan-European capacity expansion programme to meet customer demand is making good progress with available customer power now up to 68MW
- A further 6MW of planned customer capacity in Dublin is announced today, taking total available and announced customer capacity across Europe to 124MW
- The strength of TelecityGroup’s cash flows allows for the commencement of a progressive dividend policy in 2012
Current trading and outlook
Demand for premium highly-connected data centre capacity in Europe is strong and TelecityGroup confirms its positive outlook.
Due to a combination of the recurring revenue growth achieved to date, an encouraging order book opportunity pipeline and increasing operating margins, management remain confident that the Group will deliver a strong full year performance in 2011.
TelecityGroup’s financial position is very robust as its operations are highly cash generative. Net debt remains modest in relation to EBITDA at approximately 1.5x full year 2011 expectations. This includes a £15m receipt relating to the renewal of a lease in London and payments for the acquisitions of Data Electronics and UK Grid.
The Group has a £300m debt facility to support its capacity expansion programme and to fund acquisitions in Europe to broaden its growth platform.
Secured capacity expansion programme
TelecityGroup aims to achieve controlled, sustainable and profitable growth by increasing its capacity across Europe, in response to customer demand.
The Group’s previously announced capacity expansions across its European markets are being implemented and today the Group announces that it will add an additional 6MW of customer power to its Dublin 3 site, which was acquired in August 2011.
Together with previously announced projects, this takes the total planned capacity across Europe up to 124MW, almost doubling the Group’s current capacity. Most of this expansion will be delivered in the next four years.
TelecityGroup generates substantial operating free cash flows due to its high operating margins and relatively low maintenance capital expenditure requirements, given the long-life nature of its assets.
The Group plans to continue to invest the majority of these discretionary cash flows in its announced capacity expansion programme and to support value enhancing inorganic expansion, with growth in demand for data centre capacity remaining strong.
In addition to this, the growth in the Group’s cash flows allows for the introduction of a progressive dividend policy in 2012, with an inaugural payment to be made following the first half results.
Further details of TelecityGroup’s dividend policy will be announced with the 2011 full year results in February 2012.
Michael Tobin, CEO of TelecityGroup, commented:
“TelecityGroup’s performance in 2011 has been excellent and I am excited about the outlook for the business. I am pleased with the progress that is being made with our secured capacity expansion programme and with the integration of our recent acquisitions in Dublin and Manchester.”
John Hughes, Chairman of TelecityGroup, commented:
“I am delighted to be able to announce our intention to initiate a progressive dividend policy next year. It is testament to the strength of TelecityGroup’s business model that it is able both to fund strong organic and inorganic growth, while commencing dividend payments.
TelecityGroup has made excellent progress as a public company since its IPO in 2007, more than doubling its revenues, quadrupling its EBITDA and achieving very strong EPS growth in this short period, thus delivering substantial growth for its shareholders. This announcement underlines our confidence in the future and our commitment to delivering further value to our shareholders.”
For further information please contact:
Matthew Springett +44 (0)20 7005 6337
James Tyler +44 (0)20 7001 0076
Brunswick: Sarah West / James Olley +44 (0)20 7404 5959
Notes to Editors
TelecityGroup is the leading provider of carrier-neutral data centres in Europe, operating highly connected facilities in key cities.
These data centres are the places in which separate networks that make up the internet meet and where bandwidth-intensive applications, content and information is hosted. As such, they are the key network hubs, or enabling environments, of the European digital economy. TelecityGroup’s customers take advantage of the highly connected facilities to run, store, share, distribute and access digital media, IT applications and information effectively and efficiently.
TelecityGroup has an unrivalled multi-year announced capacity expansion programme in Europe. Capacity expansion is on-going in all of the Group’s key markets. This provides its growing customer base with visibility as to how their needs for capacity can be met into the future. This is important to many of the Group’s customers as their needs for scalable capacity are expected to grow due to macro trends, such as the emergence of cloud computing, whereby an increasing amount of IT infrastructure is being migrated towards centralised, highly connected data centres.
In addition to organic investments, TelecityGroup aims to make acquisitions within Europe, either for the purpose of entering new markets, or to provide growth capacity in existing markets where its data centres are fully occupied.
Telecity Group plc is listed on the London Stock Exchange (LSE: TCY).
The content of the Telecity Group plc web site should not be considered to form a part of or be incorporated into this announcement.
Cautionary note regarding forward-looking statements
This announcement includes statements that are forward-looking in nature. The actual results, performance or achievements of the Group may be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements due to known and unknown risks, uncertainties and other factors. Except as required by the Listing Rules and applicable law, Telecity Group plc undertakes no obligation to update or change any forward-looking statements to reflect events occurring after the date such statements are published.