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Macquarie Telecom report 42 per cent profit slide

Macquarie Telecom report 42 per cent profit slide

Profit drop put down to a 'year of investment'

Macquarie Telecom has recorded net profit of $11.3 million for 2013 at its annual general meeting - a 42 per cent drop on its record 2012 performance.

The drop in profit was put down “a year of investment” where the company expanded its data centre capacity at Intellicentre 2 and completed the construction of Intellicentre 4.

It has also invested in further developing its Cloud computing capabilities.

Other drivers of the profit downturn were the realisation of delays from some of their larger corporate and federal government customers.

Also, a flat revenue performance in its managed hosting business, caused by price reductions and the incremental costs associated with investments in automation and service assurance.

The company paid an ordinary dividend of 24 cents per share, fully franked, while capital expenditure for the year was $51.5 million, of which $29 million was spent on the expansion of hosting capacity in Sydney and Canberra.

A $50 million working capital facility to support strategic growth was also set up, of which $9 million was drawn as at June 30, 2013.

The company expects EBITDA of $12-14 million for the first half of 2014 and strong growth in the second half of the year.

In 2014 the company plans to fit out the second data hall and install the third megawatt of IT load at Intellicentre 2.

This is expected to finished in the first half of fiscal 2015, at a cost of $11 million.

Chief executive David Tudehope said he believed there were a number important IT developments that would continue to drive growth, namely Cloud computing and the NBN.

“The emergence of Cloud computing, which is a natural extension of managed hosting, is providing new market opportunities which Macquarie Telecom is well positioned to capitalise on with the opening of Intellicentre 2, Intellicentre 4, our deep hosting product set and 12 years of hosting experience,” he said.

“During the year, we developed and released our new “Launch” Cloud product set, allowing our customers to transform their IT environment into an on-demand platform.

Tudehope said while uncertainty surrounded the NBN, he believed increasing bandwidth speeds would elevate the importance of mission critical web applications in business and fuel growth in hosting.

“The NBN open access model means Telco competition is focused around customer service and innovation rather than infrastructure.”


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Tags macquarie telecomannual general meetingIntellicentre 2Chief executive David Tudehopecloud computingNBN

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