NEXTDC shares slump despite record result

NEXTDC shares slump despite record result

Shares in data centre company NEXTDC (ASX: NXT) fell by more than 5 per cent this morning even though it announced record revenue and profit in FY19 along with projected EBITDA growth of at least 17.5 per cent for the current financial year.

The Brisbane-based company highlights $500 million of senior unsecured debt was raised during the year, giving the group capital to expand following upgrades in Brisbane, Melbourne, Sydney and Perth.

NextDC also made land and building acquisitions in these cities, leading to annual rental savings of around $15 million.

Revenue was up 15 per cent at $179.3 million, and in FY20 this figure is forecast to rise to between $200-206 million.

Meanwhile, underlying EBITDA was up 13 per cent at $85.1 million and is expected to jump to  between $100-105 million in the current financial year.

The group's losses worsened however, going down to $9.8 million from the FY18 loss of $6.6 million.

"We are pleased to report another year of record revenue and EBITDA, demonstrating the inherent operating leverage of the business," says NEXTDC chief executive officer Craig Scroggie.

"These results were achieved during a period of record investment in our next generation of world-class Tier IV data centres. With more than $700 million in liquidity, the Company is well positioned to take advantage of customer driven expansion opportunities."

Market reviews were undertaken in Singapore and Japan in FY19 for potential future opportunities, with NEXTDC setting up offices in both countries during the year.

Work in Singapore is however on hold while the Singapore Government undertakes a review of the data centre industry, and the company continues to evaluate opportunities in Japan.

Capital expenditure of $280-300 million has been planned for the current financial year, compared to $378 million in FY18.

NXT is one of the most shorted stocks on the ASX along with companies such as Domino's Pizza (ASX: DMP), JB Hi-Fi (ASX: JBH), Bellamy's (ASX: BAL) and Nufarm (ASX: NUF).

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