UPDATE 2-Telecity boosts data-centre capacity with Irish deal

Mon Aug 8, 2011 4:26am EDT

* Becomes market leader in Ireland with 87.6 mln stg deal

* H1 revenue up 20 pct to 112.2 mln stg

* H1 adj profit before tax up 45 pct to 31.0 mln stg

* Shares up 3.6 pct (Adds CEO comments, analyst reaction, shares)

By Paul Sandle

LONDON, Aug 8 (Reuters) - British data-centre operator Telecity on Monday said it had bought Dublin-based Data Electronics Group for 87.6 million pounds ($143.5 million) making it the market leader in Ireland.

Chief Executive Michael Tobin said the company, which owns and operates data centres in European business hubs like London and Amsterdam, was looking for similar deals to Data Electronics which added 4MW of customer power.

It plans to almost double available capacity to 116MW, most of which would be achieved in the next four years.

"We are talking to number of people and they may or may not come to fruition," Tobin said in an interview.

Its carrier-neutral data centres have connections to all the major telecoms networks and offer a premium service to customers.

"We are always on the lookout for the right deal for shareholders," he said.

The group expanded its debt facility by 100 million pounds to 300 million pounds ahead of buying Data Electronics.

Telecity announced the Irish deal as it revealed a 45 percent jump in adjusted pretax profit to 31.0 million pounds for the first half on 20 percent higher revenue of 112.2 million pounds.

"Our biggest growth areas are still the content and connectivity relationships, where you see the drivers from the Internet in social media, content distribution through video downloads and mobile applications," he said.

Tobin said the company was also starting to see some pick-up in cloud services, data applications located on remote servers and accessed over the Web. "We don't provide the cloud services ourselves but we are the location of choice for cloud enablers," he said.

Shares in Telecity, which competes with Equinix and Interxion , were 2.5 percent higher at 499.3 pence by 0822 GMT, outperforming a 0.3 percent lower index of mid-sized companies .

Analysts at Barclays Capital said the first-half results were in line with its expectations and showed positive momentum in the business.

"This is a stock and a sector that appears to defy the apparent wider economic slowdown," they said in a note.

"During the financial crisis of 2008/09, Telecity delivered record growth. This momentum has continued in 2010/11, further evidenced by the 1H11 results, and we see no reason not to be optimistic for the next three years." ($1 = 0.610 British Pounds)

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