TelecityGroup

Data centre operator TelecityGroup (TCY) has unveiled a 44.6% increase in pre-tax profits for the six months to June, also reporting the acquisition of a key rival.

The fully-listed group declared pre-tax profits of £31m on turnover of £112.2m (2010: £93.7m) with EPS rising from 8.8p to 11.2p. There was also a note that Telecity had increased its debt facility from £100m to £300m while net debt rose from £45.6m to £56.1m.

Telecity also announced that it had acquired Irish data centre operator and rival Data Electronics Group in a deal worth £87.6m. Chief executive officer Michael Tobin enthused that the group's 'strong performance has continued throughout the first half of 2011' adding that customer demand 'remains strong and broad-based.' Concerning the acquisition of Data Electronics he remarked that it establishes the company 'as the market leader in Ireland'.

Analysts at Collins Stewart are forecasting EPS of 22.7p and sales of £229.6m in 2011. In 2012 it is pencilling in EPS of 27.3p on turnover of £263.9m.

Shares in TelecityGroup have more than doubled since 2009 from 200p to the current price of 435p. Shares have come under considerable pressure of late amidst the Eurozone crisis and the fall-out from the downgrading of the US' credit rating however the company operates a sector which has experienced burgeoning demand of late, particularly as interest in cloud services increases. Buy.