At NextDC’s results today, fund manager Alleron expects the company to provide more details on new customers at its second generation data centres as well as potential anchor customers at its third generation premises.
Trigger: Alleron initially purchased NextDC at $3.16, the largest ASX listed data centre operator, in late 2016 after it had raised $270m in equity capital to build its second generation of data centres. The growth reported by Australian cloud companies Atlassian and Xero and the Silicon Valley giants supports the ongoing growth of data centre capacity.
The 2016 capital raising enabled the company to triple potential capacity for its customers to 120 MW (a measure of electricity usage) and potentially generate revenues up to $500 million at 50% margins which was attractive at a market capitalisation of $1 billion at the time.
Outlook: In April this year, NextDC commenced the next stage of its capacity expansion by raising nearly $600m in equity capital and $300m in debt capital to fund its third generation of data centres which would again potentially triple planned capacity.
Alan Kwan CFA
Senior Portfolio Manager
Alleron Investment Management
Mob: 0421 412 333
alan.kwan@alleron.com.au
www.alleron.com.au