Macquarie Telecom Group delivers 7 successive years of EBITDA growth

Peter James, Chairman, Macquarie Telecom Group Ltd

Macquarie Telecom Group Ltd has announced the company’s results for the financial year ended 30 June 2021, which is in line with the government’s guidance.

Chairman Peter James said, “The 2021 full year results delivered the seventh consecutive year of EBITDA growth underpinned by our strategy of investing in data centres, cloud & cyber security, including our new IC3 Super West development for customer growth in the future.”

Macquarie Telecom Group’s results and key points

  • Seven consecutive years of EBITDA growth.
  • Full year revenue of $285.1m, an increase of 7% compared to $266.2m for FY20.
  • Earnings before interest, tax, depreciation, and amortisation (EBITDA) of $73.8m.
  • Conversion of EBITDA to operating cash flows generated a total of $45.3m this year.

The Company has completed work on the Intellicentre 3 East data centre development (“IC3”), drawing down $84.0m of the debt facility this financial year. At 30 June 2021, there is a closing cash balance of $19.8m and undrawn debt facilities of $58.0m.

Net profit after tax of $12.5m, a decrease of 7.4% on FY20 ($13.5m) show the increase in depreciation & amortisation from the increased levels of capital expenditure in FY20 and FY21.

Capital expenditure for FY21 was $139.1m (FY20: $64.1m) driven by Growth Capex of $103.6m primarily relating to investment in IC3 East in Macquarie Park and IC5 South Bunker in Canberra. Customer related Capex was $21.8m. Maintenance Capex was $13.7m.

Chief Executive David Tudehope said, “IC3 East (Phase 1) was successfully delivered on budget in FY21, and we announced plans for IC3 Super West – a new data centre which takes the Macquarie Park Data Centre Campus to 50MW IT Load over time.”

“This global scale data centre campus will attract new investment into Australia from multinationals looking to expand in the Asia Pacific region.”

“We have increased our investments in cyber security, people and technology, to benefit from the increasing demand for business and government to uplift their security defences.”

“Our customer experience, measured by a Net Promotor Score of over 75 has been important to our customers as they rely to a greater extent on telecom and cloud services as their staff are predominantly working from home as a result of Covid-19,” said David Tudehope.

Macquarie Telecom Group’s outlook

The Company’s EBITDA will continue to grow in FY22. Due to investments being made in data centres and cloud services & government the EBITDA growth will be in 2H FY22.

Continue to develop public cloud capability to enhance the current hybrid cloud offering.

Strong demand for cyber security in government and cloud services businesses and thus the need to be making significant investments in FY22 to realise this opportunity.

Macquarie Data Centres is investing in new staffing and technology ahead of revenue from our leading corporation contract win. Billing is due to start after completion in FY22.

Telecom revenue and EBITDA will continue to be affected by COVID lockdowns, which reduce the office based higher margin voice usage and access lines.

This is offset by demand for new technologies including SD-WAN. We are focused on maintaining Net Promoter Score greater than 70 across all business segments.

Depreciation and amortisation for FY22 is expected to be $71m to $74m, driven by significant ramp up in IC3 expenditure in FY21.

Telecom depreciation will remain flat at $17m to $18m in FY22 and Hosting will increase from $31.2m in FY21 to $53m to $56m in FY22 (of which $34 to $36m is Data Centres).

The Company plans to make further investment in growth and customer growth capex during FY 2022. Total capex is expected to be between $121m to $133m consisting of,

  • Growth Capex – $80m to $86m (including $68m to $71m for IC3 East)
  • Customer Growth – $25m to $28m
  • Maintenance Capex – $16m to $19m

Telecom capex will remain flat at $16m to $17m in FY22 with Hosting capex at $97m to $108m. The data centre campus will provide 50MW in total load on completion.