Self-defined carrier-neutral data centre provider Telecity has seen revenue growth accelerate since the end of last year, without any deterioration in margins, thanks to strong growth in the Rest of Europe region and a material improvement in trading conditions at its German operations.
In an interim management statement (IMS) issued on Tuesday, the company said that during the first quarter it witnessed an acceleration in its year-on-year rate of 'FX-neutral' revenue growth to reach 9.4%.
Operating margins remained at the levels seen at the end of the full-year 2013.
"The robust trading conditions seen in Amsterdam, Stockholm and Dublin during 2013 continued into the first quarter, while trading in Frankfurt has materially improved", the company said in a statement.
Likewise, the level of gross order wins in the UK division was one of its strongest ever, which the firm described as "encouraging".
Those wins, together with price rises, offset the previously forecast order book 'churn' which, as expected, is weighted to the first half.
The total capacity pipeline remains at 153.1 megawatt (MW) and build-out of this will be driven by customer demand, Telecity further added.
The London-listed group maintained its full-year 204 target for organic 'currency-neutral' revenue growth of 10%. In absolute terms however, revenue guidance remains within the £355m to £362m range, "resulting from a combination of on-target trading and moderate additional currency translation headwinds."
Medium-term capital expenditure guidance of £110m to £130m was also reiterated.
TelecityGroup indicated that it continues to be committed to its progressive dividend policy.
It will provide an update around its wider capital allocation strategy when its first half 2014 results are announced on August 4th.
Management further expects to provide information on the appointment of a permanent CFO in due course.
Analysts at Investec said that: "The first quarter IMS contains a number of positive messages, the key one being a re-acceleration in organic growth compared with FY13 as Europe recovers from churn issues.
"[...] The hints over accelerated cash return are now obvious and this, together with the re-acceleration in growth, should confirm Telecity as a double-digit TSR stock for the mid-term. We stay at 'buy' on an unchanged multiple-based target price [of 925p]."
As of 16:10 shares
of Telecity were jumping 15.3% to the 731p mark.