NEXTDC has reported all round growth with revenue up 51% to $42.1m. After two rounds of fund raising in 1H16 the group has a strong balance sheet with significant liquidity and is net cash positive. NEXTDC is well placed to execute its expansion and construction of new datacenters
NEXTDC has recorded its first net profit in 1H16 on strong revenue growth. The following table summarises key financial information for the group including 1H16 figures and FY16 guidance.
| $m | Guidance FY16 | 1H16 | 2H15 | 1H15 | 2H14 |
| Revenue | 85-90 | 42.1 | 32.0 | 28.0 | 18.5 |
| Interest expense | - | 4.0 | 3.2 | 3.1 | 0.9 |
| EBITDA | 25-28 | 11.4 | 5.0 | 3.0 | -7.4 |
| NPAT | - | 0.64 | -4.4 | -5.8 | -15.6 |
| Total assets | - | 515.2 | 293.3 | 289.3 | 297.3 |
| Total debt | - | 164.6 | 66.7 | 66.4 | 66.1 |
| Net debt | - | -60.6 | 13.86 | 4.13 | -4.76 |
| Equity | - | 331.3 | 214.9 | 218.1 | 223.6 |
| EBITDA/Interest | - | 3.0x | 1.5x | 0.9x | -7.9x |
| EBITDA-Capex/Interest | - | 0.5x | -2.4x | -2.2x | -41.8x |
| Total debt/total capital | - | 33.2% | 23.7% | 23.3% | 22.8% |
Source: FIIG Securities, Company report
1H16 highlights included:
- Total revenue was up 51% to $42.1m (1H15: $28.0m)
- EBITDA of $11.4m (1H15: $3.0m)
- Net profit of $0.6m (1H15: $5.8m net loss)
- Operating cash inflow of $5.9m (1H15: $2.2m)
- Net cash positive with debts of $164m against $225m of cash
- NEXTDC has confirmed it is on track to achieve towards the top end of its FY16 guidance of revenue of $85-90m and EBITDA of $25-28m. There will be a skew towards second half earnings performance in line with the delivery and billing commencement of the new Leading Corporation and Federal Government customer contracts announced in June and August 2015
- 1H15 saw the successful completion of a $120m equity raising together with a $100m Notes II offer, resulting in a 1H16 ending cash balance of $225m which it will use to fund the development of further data centres
- The company announced in November 2015 its intention to develop new data centres in Brisbane (B2) and Melbourne (M2), adding up to 31MW of IT load capacity to its national network. NEXTDC states it is currently in advanced discussions in relation to short-listed sites for B2 and M2
The following chart details utilisation rates:
Source: FIIG Securities, Company report
Items to note:
- New sales of 1.1 megwatts (MW) (1H15: 2.5MW)
- Contracted utilisation up 59% to 22.8MW from 14.3MW in 1H15
- Interconnection (cross connects) up 75% to 3,843 (1H15: 2,198)
- Annualised unweighted pipeline up 18% to $203m (1H15: $172m)
Conclusion
NEXTDC continues to experience strong growth and win major contracts, proving the viability of this relatively new group’s business model (established 2010). The group has a strong balance sheet with moderate gearing of 33.2% and is in a net cash positive position ($164m debt against $225m cash).