Stock in Focus: Next DC (NXT.ASX)Data Centre operator Next DC...

Stock in Focus: Next DC (NXT.ASX)

Data Centre operator Next DC shares are in a trading halt as it announces it wants to raise $618m in capital from shareholders. The funds will be used to build two new data centres in Malaysia and New Zealand and accelerate fit-out at its S3 Sydney centre.

Commenting on the new developments that could offer the NextDC share price some tailwinds in the year ahead, CEO Craig Scroggie said, “Building upon the success we have achieved in Australia over the past decade, we aim to replicate our proven business model in these new markets.” Hinting at further growth plans, Scroggie added, “New Zealand and Malaysia are just the first greenfield geographic expansion opportunities outside of Australia.”

$618m fully underwritten 1 for 8 pro-rata accelerated non-renounceable entitlement offer new shares offered at $10.80 each represents a discount of just over 8% from the current NextDC share price.

Next DC also upgraded their revenue, earnings (EBITDA) and capital expenditure guidance for the 2023 financial year. Data centre services revenue in the range of $350m to $360m (previously the upper end of the $340m to $355m range).

We welcome the growth expansion and would encourage shareholders to participate in the capital raise. We maintain our BUY rating as a medium to long-term investment.