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Press Release -- July 29th, 2015
Source: Telecity Group

Telecity Group plc results for the six months ended 30 June 2015

Performance in-line with management expectations and full year guidance reiterated

Telecity Group plc (‘TelecityGroup’, ‘the Group’ or ‘the Company’), a European provider of carrier-neutral data centres, today announces its results for the six-month period ended 30 June 2015.

Financial highlights

  • H1 2015 revenue broadly flat at £173.5m due to foreign exchange rate movements, up 6.6% on an organic currency neutral(1) (‘OCN’) basis. Underlying(2) revenue growth 9.3%
  • Adjusted(3) EBITDA(1) margin stable at 46.9% (H1 2014: 46.9%)
  • H1 2015 adjusted(3) diluted earnings per share up 2.8% on an OCN basis to 18.6p
  • Adjusted(3) free cash flow(1) of £30.8m (H1 2014: £13.3m)

Operational highlights

  • H1 2015 churn(1) down substantially year-on-year to 6.3% (H1 2014: 11.4%), led by the UK, and at the lower end of guidance for the full year
  • H1 2015 net order wins increased notably year-on-year
  • Like-for-like revenue per sold kW(1) stable
  • Group sold power percentage(1) increased 270bps to 75.1% (H1 2014: 72.4%)
  • H1 2015 available customer power(1) of 117.1MW, up 5.4MW from 31 December 2014 versus 6.0MW net power sold in the same period

Shareholder returns

  • Interim dividend up 11.1% to 5.0p per share (H1 2014: 4.5p)
  • Previously announced £400m 3-year share buy-back programme suspended in order to comply with the specific rules of the City Code on Takeovers and Mergers


  • The Directors confirm that the 2015 full year guidance remains valid on the basis of the profit forecast assumptions stated*
    • 8% – 10% revenue growth on an OCN basis
    • Stable EBITDA margin with slight downside pressure from investment

Recommended cash and share offer for TelecityGroup by Equinix

  • Proposed transaction to be reviewed by the European Commission
  • TelecityGroup and Equinix, Inc. (‘Equinix’) continue to progress the recommended transaction announced on 29 May 2015 with completion expected in H1 2016

Statutory equivalents

Certain of the above highlights are based on the Group’s adjusted results. A full reconciliation between the adjusted and statutory results is contained in note 5. Statutory equivalents of the above results are shown below. The current period has been impacted by exceptional items including M&A transaction-related expenses of £31.7m and foreign exchange movements.

  • Operating profit of £21.1m (H1 2014: £54.8m)
  • Diluted earnings per share of 1.9p (H1 2014: 18.7p)

John Hughes, Executive Chairman, said:

“I am pleased with the results achieved in the first half of 2015 and to see the progress that the Group continues to make towards achieving the full year guidance outlined in February 2015. This last year has been transformational for TelecityGroup as we set out to deliver on our renewed path for further shareholder value creation. As promised, we have delivered a refreshed long-term strategy encompassing developments in operational effectiveness, commercial execution and capital discipline combined with a desire to optimise the Group’s financial structure. The Group continues to prioritise profitable growth, driving operational excellence and efficiency across the portfolio combined with heightened discipline around capital allocation. As the investments in the UK begin to yield results and we see sustained underlying profitable growth in the Rest of Europe, I am positive about the trajectory of the Group going forward.

We are working to progress the recommended transaction with Equinix which we expect to complete in the first half of 2016. We continue to believe this is a compelling offer and an excellent outcome for customers, employees and shareholders.”

Download full results announcement (pdf)

(1) A glossary of terms is included in note 19
(2) Adjusted to exclude, where relevant, acquisitions, currency movements and non-recurring items
(3) Adjusted to exclude, where relevant, intangible asset amortisation, other financing items and exceptional items (note 5)

For further information, please contact:

Investors: Rosie Wilkins +44 (0)20 3229 1138

Media: Sarah West/Aideen Lee +44 (0)20 7404 5959

Profit Forecast Assumptions

* The Directors confirm that the full year guidance for 2015 has been properly compiled on the basis of the assumptions set out below and that the basis of accounting used is consistent with TelecityGroup’s accounting policies.

Assumptions within TelecityGroup’s control

  • There is no material change in the operational strategy of TelecityGroup from the date of this announcement
  • There will be no acquisitions or disposals which will have a material impact on the results
  • There are no material strategic investments over and above those currently planned
  • There will be no major changes in the share capital of TelecityGroup other than those currently planned

Assumptions which are not within TelecityGroup’s control

  • There will be no material macroeconomic change in the principal markets and regions in which TelecityGroup operates
  • There will be no material adverse events which will have a significant impact on TelecityGroup’s financial results
  • There will be no changes in interest rates, bases of taxation or legislation that have a material impact on TelecityGroup
  • There will be no material changes in customer demand or the competitive environment in which TelecityGroup operates
  • There will be no business disruptions that materially affect TelecityGroup or its key customers or suppliers
  • There will be no significant and sustained weakening of the pound sterling against the currencies of the major territories in which the TelecityGroup operates

Notes to Editors

Telecity Group plc

TelecityGroup is a provider of carrier-neutral data centres in Europe, operating highly-connected facilities in key cities.

These data centres are the places in which the separate networks that make up the internet meet and where bandwidth-intensive applications, content, cloud providers and information are hosted. As such, they are the key network hubs, or enabling environments, of the European digital economy. TelecityGroup’s customers take advantage of the highly-connected facilities to operate, store, share, distribute and access digital media, IT applications and information effectively and efficiently.

Telecity Group plc is listed on the London Stock Exchange (LSE: TCY).

Neither the content of the website referred to in this announcement nor the content of any other websites accessible from hyperlinks on that website is incorporated into, or forms part of, this announcement.

Directors’ responsibility statement

The Directors of TelecityGroup accept responsibility for the information contained in this document. To the best of the knowledge and belief of the Directors (who have taken all reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information.

Cautionary note regarding forward-looking statements

This announcement contains statements which constitute “forward-looking statements”. Forward-looking statements include any statements related to the proposed transaction and the expected benefits or estimated synergies resulting from a transaction with Equinix and are generally identified by words such as ‘believe’, ‘expect’, ‘anticipate’, ‘intend’, ‘estimate’, ‘will’, ‘may’, ‘continue’, ‘should’, and other similar expressions. Forward-looking statements are subject to various risks and uncertainties, many of which are difficult to predict and generally beyond the control of TelecityGroup, that could cause actual results and developments to differ materially from those expressed in, or implied or projected by, the forward-looking statements.

In addition, there can be no assurance that the proposed transaction with Equinix will be completed in a timely manner, or at all. TelecityGroup does not undertake to update any of the forward-looking statements after this date to conform such statements to actual results, to reflect the occurrence of anticipated results or otherwise, except to the extent legally required.

Other than where expressly indicated, no statement in this announcement is intended as a profit forecast or profit estimate and no statement in this announcement should be interpreted to mean that earnings per TelecityGroup or Equinix ordinary share for any period would necessarily match or exceed the historical published earnings per TelecityGroup or Equinix shares.

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