Macquarie Telecom Group (ASX:MAQ) is on the hunt for more government work, as it eyes an expansion of its operations in the nation’s capital and looks to cough up an additional $4.6 million in expenditure to help drive the expansion.
The publicly-listed telecommunications company, which released its annual financial report on 31 August, has told shareholders that, despite already “leveraging” 42 per cent of the Federal Government that have contracted with its Macquarie Government division, it is looking for further growth in the lucrative sector.
“We will further grow our government customer revenue in cyber security and secure cloud computing,” the company said in a statement. “Our cloud computing offering is certified by the Australian Signals Directorate.
“Strong and growing demand from our Federal Government agencies for secure cloud, including from Tier 1 agencies like ATO, gives great confidence for future growth in the government business.
“Accordingly, there will be further investment in expansion in Canberra and our cloud platform, with an increase in OPEX [operational expenditure] of around $3 million and CAPEX [capital expenditure] by $1.6 million across FY18,” the company said.
According to Macquarie Telecom CEO, David Tudehope, sustained growth in profitability over the past three years has allowed Macquarie to consider opportunities to invest for future growth.
“We are well positioned to benefit from the megatrends of cloud and cyber security,” he said.
Across the board, the company’s full year revenue was up by eight per cent to $219.7 million for FY2017, compared to $202.6 million for the previous corresponding period.
Meanwhile, earnings before interest, tax, depreciation, and amortisation (EBITDA) came in at $40.3 million for FY2017, an increase of $8 million, or 24.7 per cent on FY2016, and ahead of upgraded guidance.
Net profit after tax (NPAT) was up 170 per cent to $14.2 million, compared to a profit of $5.3million for the previous corresponding period.
Looking forward, expects its EBITDA to continue to grow in FY18, however the first half is likely to be flat compared to 2HFY17, due to the full impact of ongoing power price increases and investment in sales growth.
Further, based on demand, over the next six months the business will decide on whether to build or buy data centre capacity.
“The potential for investment in Intellicentre 3 will increase the requirement for capex that will primarily impact FY19,” Macquarie said in a statement.