TeleCity profit lift and Irish deal fail to impress market

 
Steve Dinneen
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TELECITY shares slumped almost seven per cent yesterday despite results that were welcomed by analysts across the board.

The data-centre operator revealed a 45 per cent jump in adjusted pretax profit to £31m for the first half on 20 per cent higher revenue of £112.2m.

Chief executive Michael Tobin (pictured) also announced the closure of its acquisition of Irish rival Data Electronics Group for £87.6m. Its ambitious growth plans involve targetting similar deals to Data Electronics and doubling its capacity over the next four years. The group expanded its debt facility by £100m to £300m ahead of its purchase.

Simon Strong, of Evolution Securities, told City A.M. the share price fall could be down to its relatively tightly-held stock, which exacerbates the negative effect of even small share sales.

The firm has been boosted by the increasing trend towards cloud computing services, which mean companies must buy more storage space from its data centres.