AI drives billion-dollar ‘transformational’ growth for QLD company
A Brisbane company deploying data centres around the nation will tap shareholders for a massive cash injection to meet “unprecedented” demand for its services.
ASX-listed NEXTDC is poised to launch a capital raising bid for $1.5 billion to turbocharge its growing national data centre business, as contracted demand for its services grows by 60 per cent in just three months.
Based in Brisbane, NEXTDC operates data centres for commercial clients in all Australian states and territories except Tasmania, as well as in New Zealand, Japan and Malaysia.
Over the past three months, the company has signed hundreds of millions of dollars worth of contracts with clients, boosting its contracted demand by 60 per cent to 667MW.
This is “unprecedented” levels of demand according to the company’s CEO Craig Scroggie.
As such, NEXTDC is tapping shareholders for $1.5 billion in capital to meet the challenge and to accelerate the opening of its fourth data centre in Sydney’s western suburbs. This adds to a $1.7 billion ‘hybrid securities offer’ announced on April 7, bringing the total being raised by the company to $2.2 billion.
“The scale of this increase in contracted utilisation and the resulting uplift in the company’s pro forma forward order book are unprecedented, underscoring the record levels of demand we continue to experience,” Scroggie told shareholders today.
“I am particularly pleased to see our Western Sydney expansion strategy coming to fruition, with contracted capacity at S4 representing the culmination of years of planning and investment by NEXTDC.
“The capacity announced today will necessitate the accelerated development of S4.”
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He said that while “raising equity is not a step we take lightly”, the cash would help the business to meet the moment.
The company now expects to generate $1 billion in earnings as a result of the new contracts signed with clients – four times the amount the company previously expected in its mid-financial year update to shareholders.
NEXTDC said its booming growth was being driven by strong demand from artificial intelligence customers.
“This structural step-change in demand is driving a customer-led requirement for accelerated development of capacity,” a statement from the company reads.
The fourth Sydney data centre is now the “immediate priority” for the ASX-listed business, which has a market capitalisation of $9.05 billion.
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