EM – FY21 Report: Macquarie Telecom (ASX: MAQ) share price unchanged

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Macquarie Telecom Group Ltd (ASX: MAQ) today announced its results for FY21 with a 7% increase in sales, but the market has reacted indifferently to the update.

Macquarie Telecom, not to be confused with Macquarie Group Ltd (ASX: MQG), is an Australian cloud, telecommunications and data center company serving business and government customers.

Similar to Aussie Broadband Ltd (ASX: ABB), the company has a clear focus on excellent customer service. This can be seen from its 75 net promoter score.

The company has a reputation for trust, thanks in part to the fact that Macquarie Telecom hosts 42% of Australian government agencies as customers.

Recently, the Company accelerated growth ambitions by building data centers in Canberra and Sydney. The total completed and planned data center capacity is 54 MW.

The Cloud Services division & was the outstanding performer in FY21 and increased by 21.3% over the course of the year.

Sales in the core telecommunications business decreased by 3% over the course of the year , 2% down, influenced by lower call volume because employees work from home.

Going forward, management expects cloud and data center revenue growth to outperform telecommunications and make a greater contribution to total revenue and the will make subsequent profits.

The decline in net income is mainly due to increased depreciation on investments in the past two years.

Intellicentre (IC) 1 and 2 are in operation in Sydney CBD and Macquarie Park, respectively.

The first phase (IC3 East) of IC3 was completed in FY21 within budget. Plans for the second part (IC3 Super West) have been announced.

IC4 and IC5, both based in Canberra, have received Certified Strategic accreditation from the Australian government.

Much of the news announced today was has been featured in previous announcements. In addition, the company’s results were in line with previous projections.

Management is shifting business from competition in the low-margin telecommunications space to higher-growth cloud and data center activities.

The company is reinvesting much of its cash flow in building new ones Locations, dampening profitability in the short term.

Given that Macquarie Telecom is providing the amount of MW from its data centers, doing a business assessment should be relatively easy.

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Macquarie Telecom Group Ltd (ASX: MAQ) today released its FY21 results with a 7% increase in sales that has market but reacted indifferently to the update.

Fast fashion jeweler Lovisa Holdings Ltd (ASX: LOV) posted a 43% increase in profits in FY21. However, it was the 56% increase in sales in the first eight weeks of FY22 that excited the market.

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