A Good AGM & Update

Attended the AGM last Friday - was very impressed with the calibre of Craig Scroggie and his C management team (had chance to briefly chat with couple of them after the meeting). Very knowledgeable on their products/services and committed to realising the vision they are well advanced in creating.

My key observations / takeaways from meeting & guidance update:

* Contracted Revenue already up another 1.2MW from 1st July. Pro-Rata remainder of year and could be on track for just shy of 3.2MW for FY15 (beyond upper end of 2.4 - 3MW guidance given). I suspect they are being conservative (prudent in current environment which severely punishes companies falling short of guidance) and leaving room to further upgrade guidance at the first half results in February next year.

* FY15 Revenue guidance of $51-55M for year (this is up substantially on $32.8M FY14 revenue excluding DC development revenue) . Again given contracted revenue to date up to $48.2M, looks potentially on the conservative side. We are now reaching the point of covering all the fixed costs (DC base costs, corporate overheads, etc) - with only incremental costs on further revenue some extra power use etc - so will now start to see the beauty of the substantial leverage available in this business model & the inherent value that has been overlooked/discounted to date. As move down the risk curve with proven business model and soon profitability, also likely to see increasing institutional interest.


* Finally very pleasing to see NXT achieved $5.4M per MW on latest $1.2MW contracted - this is up from FY14 $5.1M per MW achieved. Starting to achieve higher rates for their capacity & increasing number of cross connects & other higher value sales as customers start to take advantage of cross connects & other higher value service offerings.

* Remaining Cap-ex $30-35M (already flagged last FY) to complete their data centre fitout to 19.65MW goal well within their financial capability ($70M cash in bank + $20M undrawn facility). Combined with realisation of positive EBITDA cashflow this half, should comfortably avoid need for equity raising (common fear of some investors last FY).

All in all looking very positive & feel the company is in good hands!

Whoever the remaining short-sellers are - we are hitting the pincer point now. Ouch!