Reporting Season: Macquarie Telecom poised to exceed earnings guidance
Name: Macquarie Telecom Group (ASX:MAQ)
Market Capitalisation: $444 million
Opening Price: $21.52
Ahead of releasing its full-year result towards the end of August, Macquarie Telecom Group (ASX:MAQ) has flagged the expansion of its existing Macquarie Park Intellicentre to a 43 megawatt Campus.
While this growth initiative is likely to be well received, investors will also be buoyed by upgraded earnings guidance provided by the group.
From an operational perspective, the expansion will be undertaken in phases.
Phase 1, Macquarie Intellicentre 3 (IC3) East, will enable the company to expand its data centre capacity from a total load of 10 megawatts to 26 megawatts.
Subsequent phases will add a further 17 megawatts through the build-out of Macquarie IC3 West.
The campus is designed to meet the growing needs of global hyperscalers and cloud, enterprise and government customers.
Management expects that the initial capital expenditure on the Intellicentre 3 East Data Centre will be in a range between $75 million and $80 million, the bulk of which will be incurred across calendar year 2019.
The first data hall in the new Intellicentre Campus should achieve practical completion in late calendar 2019.
Upgrade in fiscal 2018 underlying earnings
Management advised that the unaudited fiscal 2018 EBITDA is expected to be in a range between $47 million and $48 million.
This exceeds previous mid-range guidance of $45 million announced in February 2018.
Management intends to declare a final fully franked dividend of 25 cents per share for the financial year-end 2018.
However, it is important to note during the upcoming expansion, capital constraints will result in the company ceasing dividends, commencing in the first half of fiscal 2019.
MAQ’s full year results will be released on 29 August 2018.
Those considering this stock shouldn’t make assumptions regarding future earnings, nor should they base investment decisions on performances to date. Those considering this stock should seek independent financial advice.
When the experts at Next Investors have a stock pick, it may pay to listen.
The Next Investors have been investing in ASX small cap stocks for years, with their best small cap picks yielding returns of 1,200%, 1,120%, 900% and 678%.
They have just revealed their hand-picked, FY2021 stock portfolio of high conviction long-term investments.
Click the link below to see what they are currently investing in.
S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.
Conflict of Interest Notice
S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.
The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.