Canberra Data Centres expects to grow its operating profit run-rate by more than 50 percent this year after increasing it by 35 percent in the March year just gone.

Chief executive Greg Boorer told Infratil’s investor day that his company will bring 24 megawatts of additional capacity on stream this year as well as expanding and seeking new contracted income for its recent Eastern Creek acquisition in Sydney.

Boorer says the amount of data needing to be stored securely is increasing at incredible rates

“The world has shifted towards our business model, today more than ever,“ he said.

Security and reliability is becoming increasingly important to clients – if government payments such as benefits aren’t paid on time, GDP falls, Boorer said. “We’re only three square meals away from anarchy.”

While many of CDC’s customers are government clients, the company has barely scratched the demand from private sector companies for data storage and the introduction of 5G telecommunications will only increase demand.

Until now, CDC had had a “build it and cross all our fingers and toes and hope they come” approach. “Thankfully they did,” Boorer said.

But now the company is “contracting ahead of the curve” and trying to build fast enough to keep up with demand.

CDC’s geographical concentration in Canberra had been becoming an increasing concern, which was part of the impetus to looking for a Sydney site, where international data cables connect Australia to the world.

The 145,000 square-metre Eastern Creek site has a small 7 MW data centre on it already which CDC is upgrading and extending by 13 MW and which should be fully operational by July.

It plans to build another 25 MW building on the property to be income generating by early 2021 and sees potential to build a further three 25 MW buildings on the site which would make it the largest in Australasia.

Earlier this week, Infratil said the value of its 48 percent stake in CDC had risen from $487.8 million to $841-942 million. Australia’s Commonwealth Superannuation Corp owns another 48 percent and the rest is owned by CDC’s management.

Infratil said that since it bought the stake in September 2016, CDC’s run-rate earnings before interest, tax, depreciation, amortisation and financial instruments has risen from A$50 million to A$90 million at March 31 and CDC is currently forecasting run-rate ebitdaf of A$135 million by March 31 next year, much of which is already contracted.

CDC plans to invest about A$350 million expanding its capacity this year.

Last year, it raised A$85 million in fresh capital and extended its debt facilities by A$300 million to A$915 million – it has drawn about A$535 million to date.

Boorer said that the Canberra centre had been writing three- to five-year contracts with clients but that the contracts it is writing for the Sydney facility are more like 15 years.

The company’s weighted average lease expiry has increased from 4.2 years with 10.9 years of options, to nine years with 16.7 years with options.

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