Monday, 2 November 2009

Telecity – building for the future

(By Philip Carnelley, 2 Nov 2009, 08:30) Data centre/hosting services provider Telecity has issued an upbeat trading statement for the last 4 months, saying that trading is strong across all markets. Revenue growth across the business is yielding ‘strong’ operating profit growth, as the cost base is largely fixed, pricing is robust and pipelines are healthy, continuing the trends we have previously reported on (Telecity shows how ‘boring’ can be profitable).

“Telehouses” suffered greatly in the early 1990s when the dotcom boom turned to bust and the industry suffered from massive overcapacity. But now, the continued move into the ‘Cloud’ that we comment on so often is continuing apace, and is of course exactly what Telecity is set up to provide. Consequently, the company is continuing to expand capacity: having already upgraded London, Frankfurt, Milan and others, it will deliver a new centre in Paris in December. The upgrade programme stretches out to 2011 - when capacity will be up 25% on today - as the company anticipates demand growing as far as the eye can see. Telecity says it can fund the expansion programme without further borrowing facilities.

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