Macquarie Telecom (ASX:MAQ) share price on watch with more growth in HY21

The Macquarie Telecom Group Ltd. (ASX:MAQ) share price will be on watch after reporting its FY21 result to investors.

| More on:
ASX tech shares

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Macquarie Telecom Group Ltd. (ASX: MAQ) share price will be on watch tomorrow after the telecommunications business released its FY21 half-year result.

This is a diversified technology business. It generates earnings from data centres, cloud, cybersecurity and telecommunications. The clients are mid to large business and government customers.

How did Macquarie Telecom do in the FY21 half-year result?

Looking at the top line, revenue increased by 9% to $143.6 million.

All business units grew revenue. Macquarie Telecom said that it achieved particularly strong growth in cloud services and government. It also revealed that the data centres business has sold 10MW of IT load to a leading corporation. The company boasted that hosting revenue has grown revenue at a compound annual growth rate of 22.3% over the last three years.

Earnings before interest, tax, depreciation and amortisation (EBITDA) increased by 15% to $36.4 million. Cloud services and government EBITDA grew the most, rising by 33.3% to $18 million, whilst the telecommunications EBITDA fell 3.2% to $9.1 million. Data centres EBITDA grew almost 7% to $9.3 million.

Macquarie Telecom highlighted that the EBITDA margin for the overall business has improved from 19.6% in the first half of FY18 to 25.3% in the first half of FY21.

Net profit after tax (NPAT) went up 5% to $7 million. The company generated total operating cash flows of $13.6 million during the half-year.

The telecom business continues to migrate services to the NBN in line with its plan and expects to complete this by late 2021.

Investing for growth

The company said that its data centre in Canberra (Intellicentre 5 – IC5) was completed on time and on budget. The Intellicentre 3 East (IC3 East) is on budget and will achieve practical completion in March 2021.

Capital expenditure for the first half of FY21 was $32.9 million, excluding IC3. Customer growth capex was $13.9 million, up 20%, reflective of its continued data centre sales success and product mix, according to the company.

The company said it has drawn down $93.5 million of debt to support its data centre developments in IC3 East and Intellicentre 5 South Bunker in Canberra.

Commentary from the CEO

Macquarie Telecom CEO David Tudehope said:

Macquarie's 20-year strategy of investing in world-class data centres is based on strong demand for data centre capacity as customers migrate to cloud and co-location services. The win, of the 10MW of IT load sold to a leading corporation, recognises the world class investment we have made in the Macquarie Park Data Centres Campus in Sydney's North Zone.

Macquarie Telecom share price recent performance

Over the last year the Macquarie Telecom share price has risen by 77% over the last year. However, since the start of 2021, the Macquarie Telecom share price has been largely flat so far. 

Macquarie Telecom Outlook

The company said that FY21 EBITDA is expected to be approximately $72 million to $75 million.

It also revealed that the telecom division continues to win customers from legacy data and IP carriers with its NBN and SD WAN solution.

Total capex is expected to be between $57 million to $66 million, excluding IC3. The IC3 expenditure is expected to be between $123 million to $126 million.

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for over ten years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the 'five best ASX stocks' for investors to buy right now. We believe these stocks are trading at attractive prices and Scott thinks they could be great buys right now...

See The 5 Stocks *Returns as of 30 April 2025

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Smiling young woman eating chocolate outdoors.
Share Market News

The See's Candies playbook for ASX investors

Two ASX businesses that remind me of Buffett’s sweetest investment.

Read more »

Man smiling at a laptop because of a rising share price.
Opinions

My 2 favourite ASX sectors to invest in

Finding your groove can help your investing success.

Read more »

Legendary share market investing expert and owner of Berkshire Hathaway Warren Buffett
Opinions

3 things I learned from Warren Buffett being the CEO of Berkshire Hathaway

The Oracle from Omaha is in his last year as CEO.

Read more »

A male ASX 200 broker wearing a blue shirt and black tie holds one hand to his chin with the other arm crossed across his body as he watches stock prices on a digital screen while deep in thought
Share Market News

5 things to watch on the ASX 200 on Tuesday

Here's what to expect on the local market today.

Read more »

A neon sign says 'Top Ten'.
Share Gainers

Here are the top 10 ASX 200 shares today

It was a rough trading day for ASX stocks this Monday.

Read more »

A bland looking man in a brown suit opens his jacket to reveal a red and gold superhero dollar symbol on his chest.
Broker Notes

Bell Potter names more of the best ASX 200 stocks to buy in May

These stocks could be best buys this month according to the broker.

Read more »

A financial expert or broker looks worried as he checks out a graph showing market volatility.
Broker Notes

Leading brokers name 3 ASX shares to buy today

Here's why brokers believe that now could be the time to snap up these shares.

Read more »

Oil worker using a smartphone in front of an oil rig.
Energy Shares

ASX 200 energy shares plunge on shock OPEC move

ASX 200 energy shares like Woodside and Santos are tumbling on Monday. Let’s find out why.

Read more »