Executive Director, Blake Burton was on Small Caps podcast recently and talked up plans for expansion of the DC and cloud business. 

The recently reported increase in recurring revenue is apositive as are the plans for commercialisation of its data centre in Victoria Joule Energy has signed an order for 500k where DC2 2ill provide a modular unit for Joule renewable energy.

The idea to align to renewables to power the centres is a positive. ESG for data centres is only going to increase. Hitching to crypto is likely also a good strategy, although they offer DC, not compute so I feel this is somewhat marketeering. Happy to be otherwise set straight. 

As @bradburt has stated they are going for Tier III design accreditation. This is an importantly step and follows on from the ISO27001 certification. Important as these are both elements almost every potential customer will seek as a minimum.

Burton referenced “over east” on several occasions. This is a very Western Australian expression, and it makes me wonder if they are ready, or if they will adequately plan for such an expansion. As Western Australians know, businesses that attempt to long-line it from the east coast to service WA customers, are rarely successful. 

Burton also mentioned NextDC and MaqTel – these are formidable competitors, and neither should be underestimated especially.

Shares are trading at about half the listing price with the business about at the listing anniversary. Managing Director, Justin Thomas holds around 21% of the float. Thomas has made several on market purchases, including around $50k worth in October. Other director holdings are negligible. 

While this is a significant and growing market, it is one that has large and continual capex requirements, and its a space that is fiercely competitive. Will be watching from the sidelines for now.