# MAQ - Macquarie Telecom



## prawn_86 (13 December 2010)

Cant believe there isn't a thread/

Nothing to do with Macquarie bank. They are a business to business telecom provider and looking at moving into the hosting space in a big way.

Have gone from $1 to $8 in the last 3 years and $5 to $8 this year alone. 

Currently paying a div of 2.3% and sitting at a PE of 10. Failry tight registry with circa 30% being held by the Tudehopes (founders)

Anyone got any views?


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## Mister Mark (13 December 2010)

How is this so with no volume please tell us more..... must meet the minimium


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## prawn_86 (13 December 2010)

Mister Mark said:


> How is this so with no volume please tell us more..... must meet the minimium




Cant say i understand your question. Care to elaborate?

They have low volumes trading because a high % is held by the top 20 holders; if that's what you meant


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## Mister Mark (13 December 2010)

prawn_86 said:


> Cant say i understand your question. Care to elaborate?
> 
> They have low volumes trading because a high % is held by the top 20 holders; if that's what you meant




Sorry must meet the minium meant the minium post, with regards to the stock a great rise but very little volume traded, i have not seen a chart like this before


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## prawn_86 (15 December 2010)

Up another 5% today. Only 10k shares on offer from 3 sellers.

Extremely thin volume but still powers upwards


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## prawn_86 (31 January 2011)

MAQ issued an earnings upgrade today. I actually hold a parcel as my fiance works for them. Extremely thin volumes and my valuation placed their IV at $9.50 before this upgrade, so i will have to redo it tonight 

Strong interest in their data centres also so much so they are spending millions building a new one



> Macquarie Telecom maintains a strong balance sheet with cash and cash equivalents of $45.4 million and no debt as at 31 December 2010. This cash balance is after payment of a full year dividend of $8.3 million in October 2010 and the $10.8 million purchase of a 215,000 square feet site in North Ryde to accommodate Macquarie Telecom’s new data centre facility, Intellicentre 2.


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## nulla nulla (31 January 2011)

Share holders:

Claiward Pty Ltd	                          	60.36%
Cogent Nominees Pty Limited		  8.89%
National Nominees Limited		      6.51%
Hunter Hall Investment Management                  8.70%         

Total                                                            84.46%

Bit of an overhang. Only 15% of shares for retail investors.

Directors:

Mr Robert A Kaye	    Non-Executive Chairman	             19/06/2001
Mr Stephen Butler	    Non-Executive Director (other)	26/07/2004
Mr David Tudehope	    Chief Executive Officer	             01/01/1992
Mr Aidan Tudehope    Managing Director	             01/01/1992
Mr John Palfreyman    Non-Executive Director (other)	26/07/2004

Is there a link to MacQuarie Bank? Management fees?

(Not sure how accurate/current the above info is, copied from Comsec)


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## nulla nulla (1 February 2011)

Bit of a write up in todays Fairfax "Business Day". Here is a link to the online article:

http://www.smh.com.au/business/telco-shares-at-a-10year-high-20110131-1ab82.html


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## prawn_86 (10 February 2011)

Bought more of these today. My IV analysis places their IV @ $17 based on RR of 10%. Even still at $13 at RR of 12%.

Data centre being built also so when that is complete it will add more to the bottom line. My fiance says they are retaining all their major clients and adding new ones. The differentiation point (for mobiles) is that customers can access 3 different networks, and then only need to deal with MAQ staff instead of long hold/frustrations with Optus/Voda etc



nulla nulla said:


> Is there a link to MacQuarie Bank? Management fees?




No link at all to Mac Bank, just an unfortunate name i guess.


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## prawn_86 (24 February 2011)

Rusults out, in line with expectations released a couple weeks ago.

NPAT near 10m, EPS of 46cps. Interim div of 10cps. All roughly double pcp.

They pretty much said it all in their guidance a couple weeks ago, but no nasty shocks. Currently on a PE of 26, which is a bit high i think but my valuation still puts them between 13 - 17 dollars per share (currently trading at $12)


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## zac (16 April 2011)

Not sure if forecasts have changed as my IV has the company around the $12 mark with 10%RR.

One thing im interested to learn is the company has made a loss except for the last 2 years, whys that?
As in why of recent is it making good headway.
Anything to do with the government myschool contract?


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## kermit345 (8 August 2011)

Hi All,

I'm looking at making an entry into MAQ as a value investment. The last couple years have seen earnings and the share price both grow substantially, particularly due to the hosting side of the business. Some money has been further invested into the hosting area and I'm curious as to what other may value MAQ at and if they think its a good buy at the moment, where its heading etc etc.

I believe the expansion could grow earnings quite a bit further as almost every business moves towards having a web presence and also hosting their software etc offsite through Cloud.

I'm not at home at the moment so can't post my valuation (from memory it was around $13) and would be appreciative of any input. My one concern is the tight share registry and hence lack of liquidity which could prove an annoyance if it came time to sell in the future. However this could also mean any earnings upgrade/growth could really put a rocket under the share price.

All views appreciated.


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## prawn_86 (8 August 2011)

Hi Kermit,

As per my last post on this thread my valuation has them at around $14.

They do have good management, healthy balance sheet and good long term goals. Illiquidity is ok in my books if you are willing to hold for the longer term.


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## McLovin (9 August 2011)

kermit345 said:


> Hi All,
> 
> I'm looking at making an entry into MAQ as a value investment. The last couple years have seen earnings and the share price both grow substantially, particularly due to the hosting side of the business. Some money has been further invested into the hosting area and I'm curious as to what other may value MAQ at and if they think its a good buy at the moment, where its heading etc etc.
> 
> ...




Kermit

I had a look at MAQ a while back. It's hard to get too excited about a company who's revenue has barely moved over the last 10 years has OK margins and is about to try and get into very capital intensive business -- cloud computing. Their last half PP&E purchases were more than the entire last year's purchases, and outstripped OCF. Granted 6 months a trend does not make, but I decided for those reasons not to look too much further into the business. If you want to get an idea of the capex heavy nature of the business have a look at Rackspace in the US.


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## kermit345 (9 August 2011)

McLovin said:


> Kermit
> 
> I had a look at MAQ a while back. It's hard to get too excited about a company who's revenue has barely moved over the last 10 years has OK margins and is about to try and get into very capital intensive business -- cloud computing. Their last half PP&E purchases were more than the entire last year's purchases, and outstripped OCF. Granted 6 months a trend does not make, but I decided for those reasons not to look too much further into the business. If you want to get an idea of the capex heavy nature of the business have a look at Rackspace in the US.




Thanks McLovin, I do think MAQ is undervalued but the liquidity situation has pushed me down another path with so many opportunities in the market at the moment. I haven't made any entries yet while the market is in free fall but looking at HSN and MCE for starters.


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## prawn_86 (14 May 2012)

Not a lot happening here. Overing around the $9 mark for a month or so now.

Where will the next push come for growth in the business?? I know they are focusing on data centres, but can they be competitive in that arena?


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## prawn_86 (21 February 2013)

I'll keep talking to myself a couple times a year in this thread 

HY out today, they are definitely being squeezed on their voice and mobile divisions, and a lot of capex getting their data centres up and running.

Maintaining 12cent dividend.

Looks as though their big hopes are government contracts and NBN, but it isnt as rosy for them as it was a couple years ago imo.

Volumes traded are always extremely low due to Tudehop family owning majority of the stock


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## explod (21 February 2013)

http://bigcharts.marketwatch.com/ad...rsToggle=false&chartStyleToggle=false&state=9

On the 3 year monthly posted above we see a two year pennant yet to give us a clear indication of where from this consolidation.  If we rule it off on the main bodies of the candles it is breaking to the downside and on volume a few changed hands last month with no real rise in price.

The problem I see with NBN rollout is the speed at which new technology is coming onto the market.  Even us older duds are increasingly looking to our mobile phones for up to date temperature, weather and news headlines.  Hope wayneL does not mind, but he is currently chatting ASF on his phone (ipad same thing now in my view), just a little trouble he says with spelling but it will be mastered.

So for me, if I held, I would be scratching me head a bit on this.


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## So_Cynical (25 February 2013)

Had my first detailed look at MAQ today, i think i must of seen it before but probably dismissed it immediately because the price was in a substantial up-trend..an instant turn off for me.

Leaving aside the flat revenues and falling margins...i like data and cloud and telcos in general, still lots of growth to come for the sector, i like how MAQ is very conservatively run and tightly held, and i like the fact that they don't issue shares willy nilly and raise capital.

I looked back to 2006 and couldn't find any Capital Raisings, share issues or acquisitions, no debt but they do have plans to spend money and have a 50m credit facility...one issue coming will be the 20M+ NBN access fee? (im sure there's an annual fee for NBN wholesalers) hard to see them being able to pay for this so might have to get access via (pay more) a wholesaler.

Interesting to see what happens.


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## Dona Ferentes (5 February 2020)

all that excitement (well, a couple of posters banging on) as MAQ rose from its post-GFC sleep 2009 to 2011 from a couple of bucks to $10, then a gradual decline to $5 in 2015. Which was a bad year, earnings declined a couple of years in a row, RoE went sub-zero, cashflow dropped but was still solid.

And what did they do; reduce debt, clean up balance sheet. Five years of (modest) revenue and EBITDA growth. As a company that is "engaged in the provision of telecommunication and hosting services to corporate and government customers within Australia. MAQ currently operates in two primary business divisions; Hosting (business and government) and Telco mobiles."

The big shift has been into higher margin hosting services, and into data centres, the cloud and cyber security. Now $27. Insto's on-board. Little Customer churn.


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## Dona Ferentes (8 June 2020)

Not one Announcement, since the half-yearly on 26/02

Underpinned by strong sales growth, full year FY20 EBITDA is expected to be approximately $63 to $66 million ($55 to $58 million pre AASB16) 







> ●Telecom continue to win customers from legacy data and IP carriers with our nbn and SD WAN solutions
> ●Cloud Services continue to grow successfully leveraging the Hybrid IT megatrend
> ●Continued demand from our Federal Government Agencies for cybersecurity and secure cloud, including from Tier 1 Agencies like ATO, gives great confidence for future growth in the Government Business
> ●IC3 Datacentre spend underway



Any Covid-induced sell-off was just a blip, it would seem


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## Dona Ferentes (16 June 2020)

Another datacenter. To be built in Canberra, as a response to increased demand for Govt cloud and cyber security services. Funded through an ANZ led syndicated banking facility.

So, pretty easy work, really. Volume and margins assured. ... Next.


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## galumay (17 June 2020)

I don't get the attraction, basically a low margin real estate business. Profit margins are sad, but its the free cash flow over the years that tells the real story.


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## Dona Ferentes (27 August 2020)

FY .... >>> Outlook
● The Company’s EBITDA will continue to grow in FY21. However, 2H FY21 will be relatively flat compared to 1H FY21 driven by investment in sales and operational resources to support continued growth 
● There are ongoing opportunities in the Telecom business as customers look to strengthen online footprints and their customer facing options through demand for new technologies, including SDWAN and business nbnTM 
● We will continue to develop public cloud capability to enhance the current hybrid cloud offering 
● Continued demand from Federal Government Agencies gives great confidence for future growth in the Government Business. The further investments to expand capacity in IC5 Bunker in Canberra will provide capability and scope to meet this demand
● Depreciation and amortisation (post AASB16) for FY21 is expected to be $45 to $48 million. Telecom depreciation will increase from $15.3 million in FY20 to $17 to $18 million in FY21 and Hosting from $26.0 million in FY20 to $28 to $30 million in FY21
● The Company plans to make a significant investment in growth and customer growth capex during FY21. Total capex is expected to be between $140 to $148 million consisting of:
– Growth Capex - $100 to $104 million (including $82 to $85 million for IC3) 
– Customer Growth - $22 to $24 million – Maintenance Capex - $18 to $20 million
● Telecom capex will decrease from $22.8m in FY20 to $15 to $16m in FY21 as the core network roll out is completed (growth capex) 
● The Macquarie Park Data Centre Campus will provide 43MW in total load on completion. Development of Macquarie Intellicentre 3 (IC3) East, expands the Group’s data centre capacity from a total load of 10MW to 28MW and is progressing to plan. The campus is designed to meet the growing needs of global hyperscalers and cloud, enterprise and government customers 
● As announced in June, to improve investor visibility of the value being created, Macquarie Data Centres will be reported as a separate segment from 1 July 2020  (_....and what are the chances of this being spun off, down the track, then?_)


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## Dona Ferentes (22 September 2020)

Announced today: NBN Co will slash wholesale enterprise broadband prices and invest $700 million over the next three years, as it ramps up its bid to challenge Telstra as the dominant wholesale business broadband provider. The  announcement, ahead of the latest corporate  plan to be released on Wednesday, will make its CBD prices available to 700,000 suburban and regional businesses.....

Under this plan, NBN Co will build fibre optic cable out to a business premises free of charge, and then provide its _*enterprise ethernet *_plan. All this must be done through a retailer, meaning NBN Co will rely on major providers such as Telstra, Optus and TPG getting on  board. One industry source said most providers apart from Telstra were likely to welcome the move, as it would break the TLS stranglehold on  the sector.



> Business telco provider Macquarie Telecom welcomed the announcement,  calling it a _"complete turnaround from the detrimental journey tier one telcos had us on before the NBN was introduced and executed. Crucially,  the availability of point to point fibre on demand to 85 regional zones will bring greater competition to regional Australia and be the final nail in the coffin for tier ones underserving and overcharging regional  businesses that have not had choice of provider"_, group executive Luke  Clifton said.


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## over9k (22 September 2020)

Until you see how much enterprise ethernet plans actually cost. I'll post the numbers on this in a moment.


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## over9k (22 September 2020)

The full 1000/400 is available on all fibre connections and 7% of coaxial connections. The 250/100 is available on all fibre connections and 70% of coaxial connections. Unless you are on fibre to the node, you do not need enterprise ethernet. 

If you do, I was quoted $1500 for it to be installed vs $4k for a fibre connection to be installed. So the more expensive fibre connection would pay for itself in just a few months. 

This is a total nothingburger.


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## Dona Ferentes (18 October 2020)

they play the 'local angle' .....
MTU is now well into the $40 to $50 per share range since July, and has had a pivot away from pure telecoms towards data, the cloud and specifically data centres, as well as attendant cyber security, as the sector rides a wave of increased demand for information storage, spurred on during the pandemic disruption.

MAQ's three data centres at Macquarie Park will have a total capacity of 43 megawatts and, when the campus is completed, the data centres business of Macquarie Telecom Group will have invested close to $500 million. Another data centre is nearing completion at Macquarie's Canberra campus, which will hold two facilities.


> David Hirst, Macquarie Data Centres group executive, said the pandemic disruption had both accelerated existing demand and created new demand, such as rapid take up of video conferencing for both work and with friends. _"There are more people on more video than there has ever been before"_, he told _The Australian Financial Review._



Such uptake added to broader trends already driving demand for data storage, including the *journey to the cloud*, as more companies shifted their  operations online, the internet of things, as well as e-commerce and the  automation of supply chains. _



			COVID  has obviously put us in an environment where those things have been   accelerated. Those trends are here to stay for many years to come. All that data has to be stored, analysed, computed. It lives in clouds. Clouds live in data centres.
		
Click to expand...


_


> _The new IC3 facility is designed to meet the needs of global companies, particularly hyperscalers and Software as a Service providers. Consumer expectations for high-quality digital experiences are on the rise and have been accelerated by COVID. Global SaaS companies, like the Netflix and Zooms of the world, need local   data centres in region to help deliver on these expectations and ensure quality customer service_, he said.


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## Dona Ferentes (13 July 2021)

There's been sustained buying of MAQ in the last 6 trading days, lifting to an all-time high of $56.60

(_one big dump on 05/07 around $52, and the indigestion seems to have cleared_)


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## Dona Ferentes (14 July 2021)

Planning for a new Data Centre, at the Macquarie Park Data Centre Campus, within the Sydney North Zone. It will be called* IC3 Super West* and will be the _largest data centre on the campus, adding 32MW of IT Load to bring the total campus IT Load to 50MW over time.  IC3 Super West is designed to seamlessly interconnect with IC3 East.   _

... this will be the 5th Centre, with 3 in Sydney and 2 in Canberra
.... Numbers have been confirmed: FY21 EBITDA will be within the previously announced guidance of $72 to $75 million.


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## Dona Ferentes (26 August 2022)

*Key Points*.
• Eight consecutive years of EBITDA growth.
• Full year revenue of $309.3 million, an increase of 8.5% compared to $285.1 million for FY21.
• Earnings before interest, tax, depreciation, and amortisation (EBITDA) of $88.4 million, an increase of 19.8% from prior year, at the top end of June’s guidance. 
• Conversion of EBITDA to operating cash flows generated total operating cash flows of $98.0 million during the year. There is a closing cash balance of $3.0 million and undrawn debt facilities of $64.0 million having drawn down $126.0 million.
• The Company has completed work on the fit-out of _Intellicentre 3 East _data centre development and has commenced billing of its hyperscale customer.
• Net profit after taxof $8.5 million, reflecting the increase in depreciation & amortisation flowing from the significantly higher levels of capital expenditure since FY20.
• Capital expenditure for FY22 was $98.5 million (FY21: $139.1 million) driven by Growth Capex of $64.5 million primarily relating to fit out of IC3 East in Macquarie Park. Customer related Capex was $24.5 million. Maintenance Capex was $9.5 million. 

_...... down 11% to under $64; priced to perfection_? _Also, no dividends, Interim nor Final!_


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