IXEurope’s First Half Revenues Grow By 47%

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IXEurope, EuropeÂ?s fastest growing specialist datacentre services group with eight datacentres in the UK, France, Germany and Switzerland, publishes today its unaudited trading performance for the six months to 30 June 2005.

IXEurope, Europe’s fastest growing specialist datacentre services group with eight datacentres in the UK, France, Germany and Switzerland, publishes today its unaudited trading performance for the six months to 30 June 2005.

•    Revenues up 47% to €15.3 million (2004 H1: €10.4m)

•    Compound annual revenue growth over the last three years - 39%

•    Monthly recurring revenues in June €2.3 million, up 35% compared to June 2004

•    Quarter-on-quarter continuous underlying EBITDA growth

•    Over 80% of revenue was from recurring service contracts

•    Significant new contracts include GLTrade, Global Equities and one of the largest US banks

•    Acquisition of leading German business continuity company GIC with blue chip clients including Merrill Lynch and AlpInvest

•    Significant upgrades undertaken in Internet Exchanges and power infrastructure

•    Initial tranche of €5 million loan facility raised with Bank of Scotland

Guy Willner, IXEurope Co-Founder and Chief Executive Officer, commented:

“IXEurope continues to grow at a faster rate than all other significant competitors in the European market and we are now larger than the only remaining quoted datacentre services company in Europe.

“We continue to experience strong organic growth in both of our key sectors of large enterprise and major web business. These require high levels of quality in operational support, which we are well positioned to deliver. We are particularly pleased to report that a recent customer survey shows 96% satisfaction across our portfolio of centres.

“Since inception in 1999 we have successfully acquired and integrated four additional datacentres and business continuity operations across the UK, France, Germany and Switzerland. Our reputation and strengthening market position provides us with an excellent platform to seek expansion opportunities by acquisition in a fragmented market.

“Following the acquisition of the German business continuity company GIC, we have already signed our first new contract outside Germany with Global Equities in Paris. Our strong relationship with most of the world’s leading outsourcers gives us the potential to leverage these new services.”

Enquiries:

IXEurope (http://www.ixeurope.com)    

020 7533 6618

Guy Willner, Chief Executive    

Karen Bach, Finance Director    

College Hill    

Adrian Duffield/Clare Warren    

020 7457 2815/2055

Results

The Group increased revenues for the six months to 30 June 2005 by 47% to €15.3 million (June 2003: €10.4 million). Compound annual revenue growth over the last three years to end June 2005 is 39%.

Monthly recurring revenue in June 2005 was €2.3 million, up 35% on June 2004.

The Group remained on a trend of continuously positive underlying EBITDA growth during the first half, growing in excess of 10% each quarter.

During the year the Group secured a €5 million loan facility from Bank of Scotland to assist in the funding of its growth and expansion projects.

Operations

Significant contracts were signed in France and Germany during the first half. Both the outsourcing and business continuity markets in these countries are considerably smaller than that of the UK but we expect these markets to now begin growing at a faster pace than in the past three years.

IXEurope’s upgrades have included extending datacentre support for the most recent blade server technologies which are becoming widespread particularly amongst financial services clients and the larger web players. Blade server technology concentrates computer processors in high density clusters, improving performance for the end-user but also creating a significantly higher datacentre load in terms of power and cooling.

The Group’s TiX Swiss Internet Exchange (whose members include Google, Akamai and Swisscom) was also upgraded to a dual protected platform as demand continued to grow. Network and web based companies use Internet Exchange to route Internet traffic more efficiently by connecting to many other networks in one place – the exchange. As broadband reaches more homes across Europe, the major providers need more interconnectivity at these exchanges in order to deliver broadband web content.

A new Internet exchange (NDIX) was launched in Düsseldorf to act as a local hub for network, educational and media companies, sharing content across Germany and the Netherlands.

In May the Group acquired the German business continuity provider Gesellschaft für Informationstechnologie und Consulting mbH (GIC). With offices and datacentres in Frankfurt-am-Main and Munich, GIC provides business continuity services to financial and enterprise clients in the region. Clients include Merrill Lynch and AlpInvest, a €20 billion European private equity fund.

Following the German acquisition, the Board expects to expand its business continuity services across the four key European markets; UK, Germany, France and Switzerland, and the Group has already signed its first new contract outside Germany with Global Equities in Paris. As business continuity is typically an enterprise sale, the Group will look to work closely with its major outsourcing partners to leverage their access to this market.

IXEurope’s commitment to quality continued in 2005. In February the Group passed an independent ISO9001:2000 Quality Management System audit for the 11th time in the five years since being awarded the certificate in 1999. IXEurope's management team remains firmly committed to the standard as a route to operational and commercial success, particularly with its growing number of high-end clients.

New clients during the first half included Global Equity, Merrill Lynch and Juniper Networks.

Strategy

The Group continues to focus on the three key concepts of quality, flexibility and customer service. The addition of a new business continuity service to the core datacentre and connectivity service lines provides the potential for additional revenue growth and leverages the Group’s class-leading datacentre assets. Having further consolidated its position in its four geographic markets, the Group continues to actively pursue growth and acquisition opportunities as well as building on its long-term relationships with clients across Europe.

Outlook

The new business pipeline remains strong in both of our key sectors of large enterprise and major web business. The Group remains on-track for continuous strong growth in 2005.

With the majority of revenues based on recurring contracts the Board also expects the Company to remain on a positive EBITDA growth trend.

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Kerry Jago
IXEUROPE
07817 916654
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