January 9, 2007
IXEurope 2006 Trading Update
IX Europe plc (“IXEurope”, AIM: IXE), Europe's specialist datacentre services company with 14 IXDatacentres across four countries, is providing a trading update for the year ended 31 December 2006.
IX Europe plc ('IXEurope', AIM: IXE), Europe's specialist datacentre services company with 14 IXDatacentres across four countries, is providing a trading update for the year ended 31 December 2006.
Trading has been strong since the interim results in September 2006, with EBITDA in line with market expectations and revenues significantly ahead. The Contracted MRR (Monthly Recurring Revenue) has increased to �3.5m (including power revenue of �0.9m) as at 30 November 2006 from �2.7m (including power revenue of �0.5m) as at 30 June 2006. This compares with Contracted MRR of �2.0m (including power revenue of �0.3m) as at 31 December 2005.
Revenue is ahead due principally to increases in power revenues (pricing and volume increases) and installation revenues, both of which have typically low gross margins. The increase in installation revenues reflects stronger sales of net space and the high specification requirements of customers.
A number of contracts have been signed with blue-chip customers since the interim results, including one of Europe's top five banks, a multi-national fast food chain and one of the top European outsourcers. In addition, up to 20 financial customers are being transferred to IXEurope's business continuity facilities at its 13-acre IXDatacentre campus in Frankfurt under an agreement with Sungard Germany.
Customer demand for the new London4 IXDatacentre, currently under construction, is significantly ahead of expectations in terms of volume and pricing. A significant proportion of this demand is coming from the financial services sector, traditionally highly demanding in terms of location and specification. The London4 design has been well received by customers. The first contract has already been signed with an initial value of �20m over 10 years excluding power provision and represents over 15% of phase 1 datacentre capacity (contract not included in the November Contracted MRR above).
To capture the market demand, the Board has decided to increase the planned specification and accelerate the fit-out of phase 1 (5,000m2 net space). This will result in substantially higher EBITDA and revenue from H2 2007 onwards, thus raising the return on investment. Total capital expenditure for phase 1 of London4 is now expected to increase to �20.4m (�19.4m in 2007 and �1m in 2008). In addition, due to the strong demand, the Board has decided to prepare for phase 2 of London4 by building the mezzanine floor at a cost of �1.1m in preparation for future datacentre build-out. Phase 2 would provide up to an additional 5,000m2 net space at London4.
In the second half of the year, the build-out of net space within the Group has progressed well. In particular, Paris1 expansion (1,500m2) generated first revenues in September 2006 and Paris2 (1,700m2) will generate first revenues in January 2007. Munich (4,600m2) has continued to attract customers and London4 (5,000m2) is on line to be open to customers end H1 2007. All these build-out projects are part of the current plan to bring on line a total of 35,400m2 net space within the current portfolio of sites.
The Board remains confident that the trading environment will continue to be healthy during 2007.
IXEurope IXEIXEintends to release its full year results for the year to 31 December 2006 in March 2007.
For further details
IX Europe plc
Guy Willner, Chief Executive
Karen Bach, Chief Financial Officer
020 7689 1400
Adrian Duffield/Corinna Dorward
020 7457 2020
IXEurope is one of Europe's fastest growing providers of datacentre services. Its principal activities include primary datacentre services, connectivity services and business continuity solutions.
IXEurope works with enterprise and internet customers to provide resilient datacentre infrastructure to house their IT systems far more cost-effectively than through in-house provision. The benefits include optimised IT performance, improved systems availability and reduced corporate risk through improved regulatory compliance. By continually focusing on quality, IXEurope also gives clients exceptional service levels and on-site access to a high level of technical expertise.
With award winning datacentre facilities in key European cities, broad technology expertise and a proven track record, IXEurope provides solutions that give customers the confidence that their operations are protected. The Company is ISO 9001:2000 certified has over 450 customers in the enterprise, internet and networking markets including Merrill Lynch, Network Rail and France Telecom.
IXEurope was listed on the London Stock Exchange in April 2006.
For more information please visit the website at www.ixeurope.com
Forward Looking Statements
This press release contains forward-looking statements that involve risks and uncertainties. Actual results may differ materially from expectations discussed in such forward-looking statements. Factors that might cause such differences include, but are not limited to, the challenges of acquiring, operating and constructing IBX centers and developing, deploying and delivering Equinix services; unanticipated costs or difficulties relating to the integration of IXEurope into Equinix; a failure to receive significant revenue from customers in recently built out data centers; failure to complete any financing arrangements contemplated from time to time; competition from existing and new competitors; the ability to generate sufficient cash flow or otherwise obtain funds to repay new or outstanding indebtedness; the loss or decline in business from our key customers; the results of any litigation relating to past stock option grants and practices; and other risks described from time to time in Equinix's filings with the Securities and Exchange Commission. In particular, see Equinix's recent quarterly and annual reports filed with the Securities and Exchange Commission, copies of which are available upon request from Equinix. Equinix does not assume any obligation to update the forward-looking information contained in this press release.
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