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Trading in the first few months of FY13 indicates that Telecity is on track to hit market estimates for the full year following its confident start - see Telecity’s confident start to FY13. Management says the company has experienced “solid order book growth” both in its UK and European operations.
The big challenge for data centre firms such as Telecity is managing the amount of capacity they have available to sell to customers. There is no doubt that demand for data centre space and related services remains strong, but suppliers can’t just focus on winning the business. Generating cash for investment in new capacity and bringing that new capacity online are critical success factors. Telecity is managing this very well, resulting in controlled and sustained growth. The medium term also looks promising with more capacity set to come online progressively over the next three years.
As well as ‘organic’ growth of capacity, acquisitions play an important role in ensuring future revenue growth. To that end, Telecity has today announced the acquisition of Sadece for £25m in cash, with a provision for the payment of up to another £4m, based on achievement of certain financial objectives. Sadece is a key player in the data centre and hosted services markets in Turkey. Of course, what makes Turkey such an interesting location is its geographical position between Europe and Asia and the possibility of it to become a connecting hub. Furthermore, adding the purchase of Sadece to existing capabilities takes total customer available power to 90MW.
