NextDC reaches record half-year numbers

NextDC's share price has hit an all-time high as it maintains strong revenue and profit growth in the first half of the 2018 financial year.

The data centre operator's share price was up by a $1 at the opening of tradiing to $7.10 at the time of writing, it's highest price since listing on the ASX in late 2010.

Revenue is at $77.5 million for the six months leading up to 31 December 2017, up 32 percent from $58.7 million in the same period last year. EBITDA is up 41 percent to $33.6 million for the period, compared to $23.9 million.

Profit after income tax didn't fair as well, dropping more than 50 percent to $8.4 million, which included an income tax benefit of $11.3 million associated with deferred tax assets.

“We are very pleased to report another period of record performance. These results clearly demonstrate the company’s inherent operating leverage and further showcase continued strong growth with significant increases in contracted utilisation,” NextDC chief executive Craig Scroggie said.

“The first half’s performance also included a record period for project revenues and a record period for new interconnections.”

The growth is attributed to increases in contracted utilisation, number of customers and interconnections.

Contracted utilisation for the period is up 31 percent to 39.2 megawatts (MW), up from 30 the previous year, while customers grew to 875 from 699. Interconnections are up 36 percent to 7456, compared to 5472.

“The first half of this year was the largest sales half in the company’s history. 1H18 also represented a watershed period in the development of NEXTDC’s ecosystem, with the company adding a new record number of more than 1,100 interconnections,” Scroggie said.

“Growth across the national portfolio continues to accelerate, noting we are in advanced negotiations in relation to several large customer opportunities, that have the potential to result in a significant increase in the company’s contracted utilisation base.”

During that period, NextDC opened its B2 and M2 facilities in Brisbane and Melbourne respectively, while expansions at its S1 facility in Sydney have completed.

Meanwhile, P1 in Perth opened its third data hall while work is ongoing for its fourth and final hall. The S2 facility in Sydney has commenced construction work and is expected to open in the first quarter of the 2019 financial year.

Given the better than expected results, NextDC also updated its guidance for the full 2018 financial year.

“As a result of tracking ahead of expectations, the company will upgrade its FY18 Guidance and also accelerate new project investments in the second half of FY18,” Scroggie said.

“With liquidity greater than $500 million, combined with record operating cash flow, NEXTDC is in an outstanding position to take advantage of current and future customer opportunities.”

The company now expects revenue between $152 million to $158 million, compared to the previous guidance of $146 million to $154 million. EBITDA is expected to be in the range of $58 million to $62 million, up from $56 million to $61 million.

NextDC has been engaged in a bidding war to buy back the properties it leases from Asia Pacific Data Centres. 

The data centre operator has mulled buying APDC out since July last year, after investment group 360 Capital became its largest shareholder and proposed a shakeup to APDC’s board.

APDC recently proposed that NextDC should acquire it for $280 million, or have its properties sold to a third-party. NextDC issued a statement shortly after, saying that it wouldn't be prepared to buy the properties at the current asking price based on limited information.