Telecity hikes dividend as profits jump
Telecity chief executive Mike Tobin said he hopes to deliver similar growth in its divi for the next two to three years
Wednesday 12 February 2014
Data centre provider Telecity hiked its dividend by 40 per cent today as it revealed double-digit growth in both revenues and profit.
Telecity, whose data centres provide the backbone for internet traffic and the telecoms industry, announced a 15.6 per cent jump in operating profit last year to £97.4m.
Revenue also rose 15.1 per cent to £325.6m, although the figure missed market expectations.
The company proposed a final dividend of 7p with chief executive Mike Tobin saying the business was focused on “driving real shareholder value creation now”.
“We’ll grow our dividend at least in line with earnings, but I’d like to think we can continue along the lines of this year's increase for the next two to three years.”
Telecity bought businesses in Istanbul, Sofia and Warsaw in 2013 and Tobin said these acquisitions put it in a good position for growth.
“We’re looking for these tollbooths on the highways of internet traffic. If you look at where traffic flows from the Middle East into Western Europe, that all goes through Istanbul - Warsaw is a very similar situation.”
Tobin said the FTSE 250 firm was also beginning to reap rewards from investment in technology, saying: “The data centres we’ve currently built have a much higher density of power than the original ones so we’re driving more revenue through a largely fixed cost base.”
Telecity said it had drawn up a short list for a new finance chief, but Tobin said the firm was “not in a hurry to fill a gap”.
The company also gave forward guidance on revenue for the first time, predicting a turnover between £355m and £362m in 2014.
Reacting to the results Morgan Stanley said in a note: "We don't think expectations were high going in and the market should welcome the improved disclosure and commentary on capital (with an improved dividend). However, there will still be concerns on churn and pricing."
Telecity shares fell 10 per cent on the news.
- 1 If these extraordinarily powerful images of a dead Syrian child washed up on a beach don't change Europe's attitude to refugees, what will?
- 2 Senior British politicians tell David Cameron: When dead children are being washed up on beaches – it's time to act
- 3 Make your voice heard: Sign The Independent's petition to welcome refugees
- 4 Refugee crisis: Aylan's life was full of fear - in death, he is part of 'humanity washed ashore'
- 5 German police forced to ask public to stop bringing donations for refugees arriving by train
Senior British politicians tell David Cameron: When dead children are being washed up on beaches – it's time to act
Jeremy Corbyn calls Osama bin Laden's killing a 'tragedy' - but was it taken out of context?
If these extraordinarily powerful images of a dead Syrian child washed up on a beach don't change Europe's attitude to refugees, what will?
Britain to take more refugees as Cameron bows to pressure after more than 100,000 back our campaign
If you're not already angry about the refugee crisis, here's a history lesson to remind you why you really should be
Theresa May says migrants should be banned from entering the UK unless they have jobs lined up
iJobs Money & Business
£20000 - £40000 per annum + OTE + Incentives + Benefits: SThree: Established f...
£20000 - £25000 per annum + OTE 40/45k + INCENTIVES + BENEFITS: SThree: The su...
£14000 - £16000 per annum: Recruitment Genius: This company was established in...
£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...