Macquarie Telecom sinks into the red

Communications and data centre provider Macquarie Telecom has sunk into the red after a year of investment in facilities and services.

The company suffered a net loss after tax of $776,000, a contrast to last year's profit of $11.3 million. Revenue was also down, taking a $9.4 million hit to post $196.8 million for the year ending 30 June.

Chairman Peter James attributed the results to four factors – expansion of data centre capacity, customer migration from dedicated infrastructure to virtual, mobile clients moving to lower margin offerings, and longer-than-expected wait for revenue from the federal government internet gateway program.

[Related: Macquarie Telecom keeps it local]

The spending led to $14.5 million of debt to accumulate over the year. Macquarie Telecom has now eaten up $23.5 million out of a $50 million "working capital" credit facility.

The balance of business coming from the "new" hosting unit and the "old" telco unit continued to shift in 2014. Revenue for the hosting division was up one percent, now contributing 31 percent of the total. The telco division – which encompasses mobile, voice and data – saw a $4.7 million dip in revenue.

"With the substantial completion of the company's investment program, the board and management are focused on increased business performance, in an environment of rigorous cost management," said James.

Chief executive and co-founder David Tudehope said in a statement to the ASX that the 2015 financial year would see Macquarie seek to "reignite growth in earnings".

Priorities in the coming year would include commencing billing for the government internet gateway contracts, increasing co-location sales into its northern Sydney data centre from the current 33 percent take-up, "leveraging" the trend to virtual private cloud, taking advantage of the NBN and developing its cloud computing portfolio.

Macquarie Telecom started in Sydney in 1992 upon the deregulation of the telecommunications industry. The firm announced its entry into the managed hosting business in 2010 and now has three data centres – Pitt St in the Sydney CBD; Macquarie Park in northern Sydney; and "The Bunker" in Canberra.

Last month Macquarie launched a complaint against Telstra, alleging misuse of market power in the wholesale market. Macquarie Telecom is also known as the technology industry's most generous political donor, giving six figure sums to both major parties.