WHY NEXTDC'S STOCK IS SOARING

WHY NEXTDC'S STOCK IS SOARING

AFTER posting its interim result, NEXTDC (ASX: NXT) gained more than 12 per cent on the stock market before noon.

The Brisbane data centre company reported a revenue rise of 39 per cent to a company record of $58.7 million.

NEXTDC took in earnings before interest, taxes, depreciation and amortisation (EBITDA) of $23.9 million for the half year. This was a 110 per cent increase from the prior corresponding period.

Profit before tax was $8 million, up from $600,000.

NEXTDC CEO Craig Scroggie says the 'outstanding performance' reflects the company's 'inherent operating leverage'.

"Combined with a robust balance sheet, [this] puts the business in a strong position to continue to accelerate growth," says Scroggie.

NEXTDC currently has 130 more customers than it did in December 2015. At the end of last year, the total number of businesses taking space in NEXTDC's data centres was 699.

Next item on the agenda for NEXTDC is upgrading the capacity at its Sydney centre. More data hall space is also being fitted out in Sydney and Melbourne to support a growing customer base.

NEXTDC's second Brisbane and Melbourne centres are also on track for completion towards the end of this half year, and a second Sydney centre is waiting development approval.

"FY17 is the biggest year in NEXTDC's history, with planned capital investments of more than $250 million," says Scroggie.

"We are developing three new world class hyperscale data centres to take advantage of the unprecedented demand for cloud and enterprise colocation."

NEXTDC has advised full year revenue in the range of $115 to $122 million, and EBITDA between $46 and $50 million.

NEXTDC was trading at $3.56 on the ASX at midday.

Business News Australia

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