March 21, 2010 10:52 pm

CSF to debut on Aim

CSF Group, the Malaysian data centre company, is set to become Aim’s largest technology listing in more than a year on Monday after raising more than £28m ($42m) in a new share issue.

The group will be valued at £88m when it debuts at 55p per share. The funds, equivalent to a third of its equity, will allow it to start building the largest high-end data centre in south-east Asia and expand into neighbouring countries.

It was founded 19 years ago as a designer and developer of data centres, and has built two of its own in the past 10 years. It is forecast to make pre-tax profits of £8.2m on revenue of £17.8m in the year to March 31, and is expected to start paying a dividend at the end of 2010-11. CSF was advised by Cenkos Securities.

The debut underlines the thaw in the Aim initial public offering market. February saw £14.4m of new money raised on London’s junior market, taking the total so far this year to £33.4m, 11 times the figure at the same stage last year.

The group aims to double its data centre capacity from 201,000 sq ft from three centres in Cyberjaya, Malaysia’s Silicon valley. It aims to triple profits in the coming two years and will list on a 2001 prospective price/earnings ratio of 7.5 times. The nearest listed competitor, Telecity, a far larger and more mature business, is on a rating of about 19 times.

Ian Spence, an analyst at IS Research, said foreign businesses had had a mixed reception on Aim, but CSF could be the exception to the rule. “London actually looks like a sensible place for CSF to list given the relative size of the business and the fact that investors here have a good understanding of hosting businesses.”

Teliti International, another Malaysian IT services company, will also commence its roadshow for its planned flotation on Monday that is expected to value it at £35m to £40m. It is looking to raise £12m through Zimmerman Adams. The funds will be used to build a data centre in Malaysia and to expand the company’s presence in Asia and the Middle East.

Teliti International had gross profits of M$7.7m ($2.3m) on revenues of M$37.8m in the year to September 2009, and is expected to expand 25 per cent this year.

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