Hi All,
As predicted by my post on the 25th Jan based on build out we have landed a 6MW deal in M2 which has a 7MW option to expand. I think NXT was ready for some time and we had to wait for Equinix to finish their new Melbourne datacentre. Remember hyperscalers needs multiple datacentres to build an availability zone.
https://itbrief.com.au/story/equinix-launches-data-centre-in-melbourne-up-and-coming-smart-city
I am expecting the Sydney S2 6MW deal to be announced in the next 3-4 months.
I was on the analysts call last Friday and below are the takeaways on why i bought more shares and advise not to sell.
- Craig said the M2 deal was imminent on Fridays call (announced today)
- He said this will be our best sales year yet meaning we have to sell about 10MW this half (i.e. in the next 4 months). Thus why i am expecting the S2 6MW contract to be announced soon
- Their capex spend for the year was ahead of schedule meaning the P2 and remaining S2 expansion build outs are ahead of schedule. He even said that will mean revenue is pulled forward earlier than expected.
- There are some large sovereign wealth funds looking to fund NXT debt pile of $1.5bil. He said "NXT is the prettiest girl at the dance" and everyone wants a piece of them. I am expecting their to be a significant reduction in the interest we pay from June when the current debt expires. Meaning this is going to translate to increased profits for reduced interest payments.
- He also said there will be a significant increase in revenue and EBITA in FY21. This is the initial 15MW contracts in S2 filtering through to revenue and EBITA.
All these things are what has been driving the share price up. I took everything away from the analyst call cause the reporting documents released didn't go into detail.
(20min delay)