DigiCo Infrastructure REIT (ASX: DGT) beats FY26 EBITDA guidance with $127 million, appoints Simon Mitchell and Ralph Goninan as Co-Heads, and accelerates its SYD1 data centre expansion amid strong Australian market demand.
- FY26 Underlying EBITDA of $127m surpasses guidance
- Simon Mitchell and Ralph Goninan appointed Co-Heads of DGT
- SYD1 88MW expansion accelerated with 52MW LOIs signed
- US asset sales to fund Australian growth strategy
- FY27 EBITDA guidance set at $120-125m with 15c DPS forecast
Leadership Continuity Amid Growth Surge
DigiCo Infrastructure REIT (ASX:DGT) has formalised a leadership structure designed to steer the company through a critical growth phase, appointing Simon Mitchell and Ralph Goninan as Co-Heads effective 21 August 2026. Mitchell, retaining his CFO role, and Goninan, continuing as Chief Development Officer, will jointly lead the REIT, succeeding Interim CEO Chris Maher who steps down on the same date. This dual appointment underscores DigiCo's commitment to continuity as it accelerates its strategic priorities, particularly the expansion of its flagship SYD1 data centre campus.
The move also coincides with HMC Capital's appointment of Damian Secen as Managing Director, Infrastructure, overseeing DigiCo and other infrastructure verticals, bringing over 25 years of sector experience. The leadership refresh aims to leverage deep financial and development expertise to capitalise on the buoyant Australian data centre market.
FY26 Results Beat Expectations as Australian Focus Sharpens
DigiCo delivered a robust FY26 performance with an Underlying EBITDA of $127 million, exceeding the $125 million guidance. Underlying revenue reached $239 million, buoyed by strong second-half growth from Australian assets. Adjusted Funds From Operations (FFO) stood at $71 million, supporting a distribution per security (DPS) of 12.0 cents, in line with guidance.
Operationally, the company marked significant milestones: the first 20MW tranche of the SYD1 88MW project was completed on time and on budget, while Letters of Intent (LOIs) have been executed for the remaining 52MW capacity, underpinning the accelerated expansion plan. The 52MW expansion is set to be delivered in phases over FY27 and FY28, with the first 10MW tranche expected to be operational by late Q4 FY27.
Alongside SYD1, DigiCo is advancing a 15MW brownfield expansion at ADL1, supported by advanced customer discussions. These initiatives are part of a broader strategy to prioritise supply-constrained Australian markets, recycling capital from lower-yielding US assets, including the pending sales of Chicago (CHI1) and Los Angeles (LAX1 and LAX2) sites. Proceeds from these sales, expected to total around $470 million, significantly strengthen DigiCo's balance sheet, reducing net debt from $1.6 billion to approximately $0.5 billion and lowering gearing from 39% to 18% on a pro-forma basis.
Guidance and Growth Outlook
For FY27, DigiCo projects Underlying EBITDA between $120 million and $125 million, inclusive of two months of CHI1 EBITDA. Excluding CHI1, this represents a 15-21% growth on a like-for-like basis. Capital expenditure is forecast between $300 million and $500 million, predominantly allocated to the SYD1 expansion and weighted towards the second half of the year. This capex will be funded through existing cash reserves and undrawn debt facilities, with no new equity required.
Distributions are expected to rise to 15.0 cents per security in FY27, a 25% increase over FY26, reflecting the company's commitment to paying out 90-100% of FFO over the medium term. DigiCo’s Australian platform is on track to reach a stabilised EBITDA of approximately $250 million once SYD1 and ADL1 expansions are fully operational, marking a significant step in its growth trajectory.
Strategic Shift to Australian Market
DigiCo's strategic focus has decisively shifted towards the Australian market, responding to record customer demand and supply constraints. The acceleration of the SYD1 expansion and the brownfield-led growth approach reflect this pivot. The company is also evaluating greenfield opportunities with potential incremental IT capacity exceeding 1GW, aligned with the Federal Government’s proposed data centre framework.
This Australian emphasis is supported by a resilient portfolio valuation, with the Australian assets independently valued at $2.5 billion, a 7% increase year-on-year, contributing to a total portfolio valuation of $4.1 billion. The balance sheet remains robust, with pro-forma liquidity of around $1.2 billion post US asset sales and fully hedged interest rate exposure at an effective cost of 6.0% per annum.
Sustainability and Climate Risk Management
DigiCo has released its inaugural climate-related financial disclosures in line with Australian Sustainability Reporting Standards (AASB S2), highlighting governance structures, risk management, and sustainability initiatives. The company identifies regulatory mandates and water scarcity as key climate risks, with ongoing investments in energy efficiency and water management technologies, particularly at the SYD1 facility.
Scope 1 and Scope 2 greenhouse gas emissions were reported at 621 tCO2-e and 69,183 tCO2-e respectively, measured under the National Greenhouse and Energy Reporting framework. DigiCo is progressing its sustainability strategy and climate adaptation planning, with further disclosures and targets expected in future reporting periods.
What to Watch Next
DigiCo’s ability to convert signed LOIs into operational revenue at SYD1 and ADL1 will be a critical near-term catalyst, alongside the completion of US asset sales and the effective deployment of capital into Australian expansions. The newly appointed Co-Heads Mitchell and Goninan face the challenge of maintaining execution momentum amid a dynamic regulatory and market environment. Investors will be keen to see how DigiCo navigates the evolving climate risk landscape while delivering on its growth and distribution targets.
With a strengthened balance sheet and clear strategic focus, DigiCo is positioned to capitalise on Australia's growing data centre demand, but the pace and profitability of expansion remain key questions as the company moves into FY27.
Bottom Line?
DigiCo’s leadership refresh and balance sheet strengthening set the stage for accelerated Australian growth, but execution on SYD1 expansion and US asset divestments will define its near-term trajectory.
Questions in the middle?
- How quickly will the SYD1 52MW expansion convert LOIs into revenue-generating capacity?
- What impact will evolving regulatory and climate policies have on DigiCo’s development costs and timelines?
- Can DigiCo sustain distribution growth while funding aggressive capex without new equity?