Melbourne IT consolidates data centres after heavy acquisitions

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Melbourne IT consolidates data centres after heavy acquisitions
Martin Mercer

Melbourne IT will consolidate three data centres into one off the back of its acquisitions of Netregistry in 2014 and Uber Global in 2015, which were followed by transactions for Outware Systems in 2015 and InfoReady in 2016.

The publicly listed IT provider revealed it will be out of three data centres by the end of 2016, consolidating to a single cPanel hosting platform.  

More than 40,000 customers were migrated in the first half of the year, bringing the total to 60,000 customers and 130,000 services. Melbourne IT aim to have moved a total of 200,000 customers by the end of 2016.

Meanwhile, app developer Outware and business intelligence specialist InfoReady – both former CRN Fast50 companies – have relocated into the same Melbourne office, sharing sales and service functions.

The news came as Melbourne IT revealed a 23 percent rise in revenue to $85 million for the first half of 2016.

EBITDA more than doubled from $5.2 million in 2015 to $11.2 million in 2016. Net profit after tax (NPAT) was up 83 percent to $2.2 million.

Melbourne IT's acquisition spree has helped the company build its enterprise service (ES) capabilities and secure services contracts with the likes of Jetstar, Officeworks and Crown.

Martin Mercer, chief executive of Melbourne IT, said: "ES delivered very strong growth on the back of the contribution from the rapidly growing businesses in data analytics and mobile apps. This is expected to accelerate further in H2 and underpin an even stronger full year performance."

Total revenue at the ES division was $32.9 million, a 110 percent growth compared with the previous year, and EBITDA was up by 183 percent to $5.1 million.

"Melbourne IT has a clear strategy to transition to a solutions business with higher-quality earnings. Possibly the most important aspect of these results is the growth in our solutions revenues in both enterprise services (ES) and small to medium business (SMB)," said Mercer.

Strong growth in sales of managed marketing solutions helped results in the small and medium business division. Solutions market grew 90 percent alone.

"Our SMB division has turned the corner, returning to top line growth (on a pcp basis) after a protracted period of decline. We anticipate that this top line growth will flow through to the bottom line late this financial year or early the following year," said Mercer.

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