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Why the Macquarie Telecom (ASX:MAQ) share price is soaring

The Macquarie Telecom Group Ltd. (ASX:MAQ) share price is up more than 5% after the business gave an update about a new data centre.
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Jaz Harrison

Jaz is a Staff Writer for Rask. She is a keen investor who loves to thoroughly poke holes in an investment idea before it has a chance of making it into her portfolio. Jaz invests for the long-term and doesn't sweat the small stuff. She strongly believes that empowering people with knowledge is the best way for them to take charge of their finances, which is exactly the approach she takes with her own money and investments.
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The Macquarie Telecom Group Ltd. (ASX: MAQ) share price is up more than 5% after the business gave an update about a new data centre.

Macquarie Telecom’s new data centre

The telecommunications and technology business announced it has today lodged a state significant development application to build a new data centre at the Macquarie Park Data Centre Campus within the Sydney North zone.

Macquarie Telecom’s new data centre will be called the “IC3 Super West” and will be the largest data centre on the campus. It will add 32MW of IT load to bring the total campus IT load to 50MW over time. The company said this new data centre is designed to seamlessly interconnect with IC3 East.

When will this be finished?

Macquarie Data Centres is aiming to complete the constrution of phase 1 of IC3 Super West in the second half of the 2023 calendar year. IC3 Super West has been designed to meet the needs of the corporate, government and wholesale markets and will enhance the state’s cybersecurity infrastructure and capabilities.

It’s currently obtaining the necessary planning consents, which are expected to be received in early 2022. Construction and funding of IC3 Super West will then follow and remains subject to final board approvals.

Management comments

Macquarie Telecom CEO David Tudehope said:

“IC3 Super West will expand our Macquarie Park Data Centre Campus to 50 MW of IT Load. This global scale data centre campus will attract new investment into Australia from multinationals looking to expand in the Asia Pacific region. The Macquarie Park Data Centre will also be the home to our new Sovereign Cyber Security Centre of Excellence which is being launched today with the support of Investment NSW.”

Guidance

The company confirmed that its FY21 EBITDA (EBITDA explained) will be in the range of $72 million to $75 million.

Summary thoughts on the Macquarie Telecom share price

The company offers a number of useful services to businesses and organisations, particularly with its non-telecommunications operations.

I think it’s a good business, but the earnings valuation is very high, so I’m not sure I would want to buy it at this level. But I’d be happy as a long-term shareholder.

There are other ASX growth shares I’ve got my eyes on at cheaper prices.

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At the time of publishing, Jaz does not have a financial or commercial interest in any of the companies mentioned.

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