Hosting boosts Macquarie Telecom full year results

Hosting revenue up 20.7 per cent year-on-year

Growth in hosting revenue has helped Macquarie Telecom (ASX:MAQ) record a 70 per cent year-on-year increase in net profits after tax to $17.7 million for the year to 30 June 2011.

Revenues for the year were $236 million, up 3.6 per cent, earnings before interest tax depreciation and amortisation (EBITDA) was $37.2 million up 28 per cent year-on-year, while earnings per share (EPS) were $0.85 up 69 per cent.

In February the company said hosting had also helped it post an increase of 102 per cent on net profits after tax of $9.7 million for the half year to 31 December 2010.

Detailing the performance of its hosting business, the company said revenue had increased 20.7 per cent year-on-year. The business unit's prospects had also been boosted by the inclusion of its Intellicentre on the Federal Government’s Data Centre Facilities Panel.

Investment in automation to increase efficiency and lower operating costs, as well as the January launching of an enterprise-managed and self-managed Infrastructure as a Service (IaaS) Cloud offering has also helped.

In July, the company’s general manager hosting operations, James Mystakidis, told CIO Australia that it had upgraded a significant portion of its legacy IT, including its storage infrastructure and IT operations management systems, amid significant growth in demand for its hosting and Cloud services.

Previously, Macquarie’s old storage technologies were unreliable, rife with service failures and did not have the capacity to scale when required.

In its telco (voice, data and mobile) business, revenues were down 9.3 per cent due to price competition and fixed to mobile and data substitution. During the year, the company had invested in management tool development, automation, systems and processes aimed at improving efficiency and lower costs.

The company also invested $60 million to expand its hosting capacity through its new Intellicentre 2 data centre in North Ryde, Sydney.

Looking at the year ahead, Macquarie Telecom said it would remain focused on managed hosting and becoming an integrated telco provider to business and government.

The results follow just a day after Macquarie became the latest telco to sign a trial agreement with the NBN Co, beginning a program to take advantage of the network once it becomes operational.

Follow Tim Lohman on Twitter: @Tlohman

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