Beeks Fin Cloud Grp - Final Results for the year ended 30 June 2026
Beeks Financial Cloud Group plc
("Beeks" or the "Company")
Final Results for the year ended 30 June 2026
Record financial performance driven by momentum across all product offerings
Innovation expanding the Group's addressable market
19 October 2026: Beeks Financial Cloud Group plc (AIM: BKS), a cloud computing and connectivity provider for financial markets, is pleased to announce its final results for the year ended 30 June 2026.
Financial highlights
· Revenues¹ up 11% to £40.0m (2025: £35.9m), with Analytics revenue rising to £4.4m (2025: £0.6m), and Proximity/Exchange Cloud revenue of £9.3m (2025: £10.3m) which reflects the timing of contract go-lives
· Annualised Committed Monthly Recurring Revenue (ACMRR) up 15% to £34.0m on a constant currency basis (up 13% to £33.4m on actual basis) (2025: £29.5m).
· Gross profit up 10% to £16.2m (2025: £14.7m)
· Underlying2 EBITDA increased 18% to £16.1m (2025: £13.6m)
· Underlying profit before tax3 increased 15% to £6.3m (2025: £5.5m)
· Underlying diluted EPS4 7.62p (2025: 7.60p)
· Operating cash flow before working capital up 26% to £17.8m (2025: £14.1m), with £6.8m absorbed by the increase in contract assets on Q4 deployments billed over three to five years
· Gross cash at 30 June 2026 of £5.4m (30 June 2025: £7.4m) and net cash⁵ of £0.6m (30 June 2025: £7.0m). This reflects upfront hardware investment for a number of contracts deployed in Q4, which are billed over their terms, with £17.7m of contracted billings to be collected.
1
Revenue referenced throughout the accounts excludes grant income and rental income
2
Underlying EBITDA is defined as profit for the year before amortisation, depreciation, finance costs, taxation, acquisition costs, share based payments, exchange rate gains/losses on statement of financial position translation and exceptional non-recurring costs
3
Underlying profit before tax is defined as profit before tax excluding amortisation on acquired intangibles, acquisition costs, share based payments, exchange rate gains/losses on statement of financial position translation and exceptional non-recurring costs
4
Underlying diluted EPS is defined as profit for the year excluding amortisation on acquired intangibles, acquisition costs, share based payments, exchange rate gains/losses on statement of financial position translation and exceptional non-recurring costs divided by the number of shares including any dilutive share options
5
Net cash is defined as closing cash less closing asset financing loans and bank loans.
Statutory Equivalents
The above highlights are based on underlying results. Reconciliations between underlying and statutory results are contained within these financial statements. The statutory equivalents of the above results are as follows:
· Profit before tax increased 41% to £3.94m (2025: £2.79m)
· Basic EPS increased 10% to 4.88p (2025: 4.43p)
Operational highlights
Innovation driving revenue growth and expansion of the Group's addressable market
·
Successful launch and commercialisation of Market Edge Intelligence®, an AI-powered analytics offering, securing over $10m in total contract value to date
·
The speed of adoption provides strong validation of the power of the offering for Tier 1 financial institutions and creates opportunities for further expansion
·
Beeks Global Network will launch in FY27 with two new connectivity products, creating additional opportunities across existing customers and broadening our addressable market.
Momentum across all existing product offerings
·
New Exchange Cloud® wins with TMX in Canada, nuam, the first multi country integrated exchange in Latin America, and post period end, the Stock Exchange of Thailand
·
Existing Exchange Cloud® contracts with Kraken and Australian Securities Exchange ("ASX") both transitioned to monthly profitability, demonstrating the value of the revenue share model
·
Proximity Cloud® contracts secured included a five-year agreement with a major South African bank, an extension with a large FX broker and a new five-year contract with another large FX broker
·
Private Cloud delivered the strongest recurring revenue growth across the Group, with wins across several financial institutions and geographies, including a three-year contract with a major Canadian bank.
FY27 Outlook
·
The Group's growing recurring revenue base, expanding customer relationships and healthy pipeline give the Board confidence in the Group's prospects
·
Entered FY27 with ACMRR of approximately £34.0m, providing substantial revenue visibility
·
Exchange Cloud® revenue share deployments are expected to make an increasing revenue and profit contribution from FY27 onwards
·
The Board anticipates FY27 revenue will be in the range of £43m - £48m, representing growth of between 7.5% and 20%; with an underlying EBITDA margin of between 38% and 42%
·
In Q1 FY27 we have secured a multi-year Exchange Cloud® win with the Stock Exchange of Thailand, in addition to c.$4m of Exchange Cloud® contract extensions
·
The size of the addressable opportunity across the Group's offerings remains significant and competition is limited.
Gordon McArthur, CEO of Beeks, commented:
"FY26 has been a year defined by another record financial performance alongside two significant strategic milestones. We successfully launched and commercialised Market Edge Intelligence®, securing three new contract wins within months of launch and validating the scale of the opportunity for AI-powered analytics in financial markets. At the same time, we demonstrated the value of our Exchange Cloud® revenue-share model, with both Kraken and ASX achieving monthly profitability during the year.
"Across the Group, we secured significant wins with leading exchanges, banks and financial institutions, increased ACMRR and further strengthened the visibility of our recurring revenue base. These achievements reflect the growing quality of our customer relationships, the strength of our technology and our ability to translate innovation into commercial success."
"Our focus for FY27 remains on commercial execution: converting the pipeline, increasing participation across live Exchange Cloud® deployments, expanding within our existing customer base, and building on the early success of Market Edge Intelligence® and further product innovation through the forthcoming launch of the Beeks Global Network. With a broader proposition, increasing revenue visibility and a significant market opportunity ahead of us, we remain confident in delivering continued growth."
For further information please contact:
Beeks Financial Cloud Group plc
Gordon McArthur, CEO
Fraser McDonald, CFO
via Alma
Canaccord Genuity (Nominated Adviser and Broker)
Adam James / George Grainger
+44 (0)20 7523 8000
Alma Strategic Communications
Caroline Forde / Joe Pederzolli / Emma Thompson
+44 (0)20 3405 0205
About Beeks
Cloud computing is crucial to Capital Markets and finance.
Beeks Group is a leading managed cloud provider exclusively within this fast-moving sector. Our Infrastructure-as-a-Service model is optimised for low-latency private cloud compute, connectivity and analytics, providing the flexibility to deploy and connect to exchanges, trading venues and public cloud for a true hybrid cloud experience.
ISO 27001 certified, we provide world-class security aligned to global security requirements. Founded in 2011, Beeks Group is listed on the London Stock Exchange (LSE: BKS) and has enjoyed continued growth each year. Beeks Group now employs over 100 team members across the globe with the majority based at our Renfrew HQ.
Find out more at beeksgroup.com
Chairman's Statement
FY26 demonstrated the continued development of Beeks as a larger, more profitable business with an increasingly recurring revenue base. Revenue increased by 11% to £40.0m (FY25: £35.9m). Underlying EBITDA increased by 18% to approximately £16.1m (FY25: £13.6m), lifting the underlying EBITDA margin to approximately 40% (FY25: 38%). Diluted earnings per share was up 9% to 4.51p (FY25: 4.12p).
Of particular significance was the development and rapid commercialisation of Market Edge Intelligence®, our proprietary AI-based offering. Its adoption by several world renowned financial institutions, securing over £7.5m in contract wins, provides strong validation of both the sophistication of the technology and the scale of the market opportunity. This achievement further demonstrates Beeks' ability to innovate successfully and rapidly translate that innovation into commercial returns, a capability that sits at the heart of its strategy. Market Edge Intelligence® has established a differentiated, revenue-generating position for Beeks in financial markets AI and represents a significant new driver of recurring growth.
Our wider offerings also continued to perform strongly, with Exchange Cloud® securing new deployments and increasing contributions from revenue share arrangements, Proximity Cloud® winning new contracts and expanding existing customer relationships, as well as Private Cloud delivering strong recurring revenue growth.
This progress was supported by continued investment in the infrastructure required to deliver new contracts and expand capacity across the Group's offerings, alongside development of the Beeks Global Network ahead of its FY27 launch. While this investment was reflected in the year-end cash position, it supports a growing contracted revenue base and is expected to generate increasing returns as customer adoption builds. Beeks therefore enters FY27 with strong revenue visibility and encouraging momentum across its four offerings.
Looking ahead, the Board remains highly confident in the Group's prospects. Beeks has a broader proposition, an expanding base of recurring revenue and established relationships with many of the world's leading financial institutions. Together with a significant market opportunity and healthy pipeline, these strengths provide a strong foundation for continued growth.
Finally, on behalf of the Board, I would like to thank our colleagues for their commitment and contribution throughout the year. I would also like to thank our customers for the trust they place in Beeks, and our shareholders for their continued support.
Will Meldrum
Chairman
19 October 2026
Strategic Report
Market Overview
The capital markets industry continues to undergo rapid transformation, driven by technological innovation and regulatory change. Increasingly, firms are recognising the strategic importance of cloud infrastructure to support trading, risk management and analytics in an environment where speed, scale and resilience are paramount.
Cloud adoption within capital markets has accelerated over the past decade. Although institutions have been seeking to outsource functions that do not provide a competitive advantage for some time, historically they have been cautious to outsource cloud due to security and latency concerns. Now, however, organizations are embracing private and hybrid cloud models that provide the control, performance and compliance assurances required in a highly regulated sector. Exchanges, brokers, banks and trading firms are leveraging cloud-based solutions to access on-demand compute power, streamline operations and reduce the costs of maintaining legacy infrastructure.
Key market drivers include:
·
Latency-sensitive trading: The demand for low latency continues to shape infrastructure investment, with cloud platforms tailored for proximity hosting and direct market access gaining traction.
·
Data growth and analytics: The exponential rise of market and transaction data has increased reliance on scalable cloud environments for real-time analytics and regulatory reporting.
·
Resilience and business continuity: Regulators and market participants alike prioritise operational resilience, making cloud-based redundancy and disaster recovery critical considerations.
·
Cost efficiency and agility: Flexible consumption models allow firms to optimise resources, respond quickly to market opportunities and innovate without heavy upfront investment.
Looking ahead, the shift towards cloud-native trading and post-trade environments is expected to deepen. As digital assets, machine learning and AI-driven strategies evolve, firms will require infrastructure capable of supporting increasingly complex workloads. Strategic partnerships between cloud providers, exchanges and fintech specialists are likely to define the next phase of industry development.
Beeks is well positioned within this landscape, offering cloud infrastructure specifically designed for the performance, security and compliance needs of capital markets.
Strategy
Our mission is to lead the way in creating flexible, future-ready infrastructure for capital markets, delivering innovation without compromising on reliability.
Our business is driven by three key strategies:
-
Expand market presence across geographies and the capital market space. We will continue to grow the number of customers across exchanges, brokers, bank and other capital markets organisations.
-
Continuously improve the strength of customer relationships. Beeks aims to strengthen long-term partnerships with existing clients by delivering additional value through our expanding portfolio of services. By focusing on upselling and cross-selling opportunities, from infrastructure to analytics, private cloud and managed services, we will enhance customer engagement, increase retention and grow revenue within our established client base. Central to this goal is building trust through consistent service excellence, demonstrating measurable outcomes and positioning Beeks as a strategic partner rather than a utility provider.
-
Drive innovation. The launch of Market Edge Intelligence enhances Beeks' offering by combining our trusted, high-performance infrastructure with intelligence-led tools that address the growing demand for transparency, resilience and efficiency. It sets the path for driving innovation across Beeks as a whole. It signals our commitment to evolving from a provider of infrastructure to a strategic partner for insight and growth. This launch strengthens our role in helping clients navigate an increasingly complex market landscape, while laying the foundation for the next generation of solutions that will define our industry.
Sales and Marketing
Over the past year, Beeks has continued to evolve its sales and marketing approach with a clear focus on building trust, deepening relationships, and reshaping market perception. Beeks' heritage is rooted in infrastructure; our ambition is to be recognised as an innovative partner for capital markets, one that helps clients navigate complexity, unlock performance, and grow with confidence.
Central to this shift has been a deliberate expansion of our thought leadership programme. By investing in high-quality content, expert commentary, and active participation in the conversations that matter most to our audience, we have strengthened our position as a capital markets expert, not simply an infrastructure provider. This has been complemented by the introduction of paid advertising, allowing us to extend our reach and continue to build brand awareness. Together, these activities are reshaping market perception at scale, reinforcing the message that Beeks brings strategic depth as well as technical excellence.
Our investment in the sales team reflects the same ambition. We have increased headcount across our sales and pre-sales teams to ensure coverage across EMEA, APAC, and the Americas. Our teams have maintained an active presence at key industry events and conferences, building brand recognition, generating qualified pipeline, and opening new conversations across all of our offerings.
Chief Executive's Review
FY26 was an important year for Beeks, marked by two significant strategic milestones. Firstly, we successfully launched and commercialised Market Edge Intelligence®, securing three new contracts within months of launch. The speed of adoption has exceeded our initial expectations and provides strong validation of the scale of the offering's commercial opportunity. Secondly, we made significant progress in the transition of Exchange Cloud® to a revenue share model, demonstrating the flexibility of our offering and enabling us to establish new types of commercial relationships with exchanges. During the year, both Kraken, one of the longest-standing, most liquid and secure cryptocurrency exchanges, and Australian Securities Exchange ('ASX') continued to make strong progress in scaling its use of the platform, with Kraken selling out its first phase and moving into phase two deployment. Together, this progress has broadened our proposition and strengthened the visibility of our recurring revenue base.
In parallel, we delivered another year of record financial performance, with strong growth across revenue, underlying EBITDA and underlying profit before tax. Following a first half shaped by contract timing and the transition to revenue-share arrangements, the Group delivered the strongest second half in its history and achieved a full-year performance in line with the Board's expectations. The growing quality of our revenue base was reflected in a further increase in ACMRR, supported by strong recurring revenue growth in Private Cloud and an increasing contribution from Exchange Cloud® revenue-share contracts.
Commercially, we made progress across all four offerings. We announced two further Exchange Cloud® deployments with TMX in Canada and nuam in South America, and secured significant Proximity Cloud® and Private Cloud wins with leading financial institutions across multiple regions. Combined with the early adoption of Market Edge Intelligence®, this means we enter FY27 with a broader proposition, encouraging momentum across all four product lines and a healthy pipeline of commercial opportunities.
Financial performance
Revenue for the year ended 30 June 2026 increased by 11% to £40.0m (FY25: £35.9m), or by 12% on a constant currency basis to £40.7m. Underlying EBITDA grew by 18% to £16.1m (FY25: £13.6m) and underlying profit before tax grew by 15% to £6.3m (FY25: £5.5m), or by 18% to £6.5m on a constant currency basis.
The shape of performance across the year reflected the timing of contract wins and the increasing prevalence of Exchange Cloud® revenue share contracts. These contracts typically generate lower upfront deployment revenue while still requiring Beeks to incur set-up costs, but are expected to deliver greater revenue versus the prior model over the medium term as customer engagement scales. H2 Revenue increased 73% sequentially compared with H1, benefitting from the recognition of revenue from contracts secured towards the end of H1, a growing contribution from revenue-share arrangements and the significant new wins announced during the second half.
Beeks continues to benefit from a strong recurring revenue profile and high customer retention. ACMRR grew by approximately 15% on a constant currency basis to £34.0m, £33.4m on an actual basis) (30 June 2025: £29.5m). This contracted base provides substantial visibility entering FY27. The year also saw strong momentum across Beeks' newer growth initiatives, with Analytics gaining traction and Market Edge Intelligence® securing several customers within months of launch. The pace of adoption of Market Edge Intelligence® has exceeded our initial expectations, providing strong validation of the commercial opportunity.
Gross cash at 30 June 2026 was £5.4m (30 June 2025: £7.4m). After the £1.5m bank loan (30 June 2025: £nil) and asset finance of £3.2m (30 June 2025: £0.4m), net cash was £0.6m (30 June 2025: £7.0m). The movement principally reflects significant upfront infrastructure investment, weighted towards the final months of the year, to support new Exchange Cloud® revenue share deployments and continued capacity expansion across Proximity Cloud® and Private Cloud. Several revenue share deployments are now operational, demonstrating strong progress in the rollout of the model, and we expect the returns from this investment to build as customer adoption and associated recurring revenue increase. After the year end, we agreed a £5m revolving credit facility with Barclays, which is currently undrawn and provides further flexibility to support our investment plans.
Operational Expansion
During FY26 we continued to expand our operational capability to support the contracts secured across our offerings. We brought further Exchange Cloud® deployments into service, added capacity across our existing data centre estate and continued to invest in the infrastructure required to support Proximity Cloud® and Private Cloud customers.
The Group also increased its team through targeted recruitment, with headcount of 115 at 30 June 2026 compared with 102 at 30 June 2025. Investment was focused on areas that directly support growth, including sales and the continued development and delivery of our technology.
Product roadmap
Innovation remains central to our strategy. During FY26, the principal milestone was the launch and successful commercialisation of Market Edge Intelligence®, which brings AI-powered analytics and predictive intelligence directly to the colocation edge. The platform can identify infrastructure anomalies, support capacity forecasting and provide real-time insight within performance-critical capital markets environments. It broadens our addressable market, provides significant cross-sell opportunity across the customer base and supports the continued growth of our contracted recurring revenue base.
During the year we also secured a minority stake in Liquid-Markets-Solutions, giving Beeks exclusive access within the managed financial services data centre market to its ÜberNIC technology. This ultra-low-latency technology, enhances the performance and attractiveness of our Private Cloud and Exchange Cloud® offerings, while creating an additional route to market. As a strategic investment, it also gives Beeks the opportunity to share in any future increase in the value of the business.
We continued to enhance the speed, resilience and scalability of our wider platform, enabling faster deployment of capacity and greater self-service control for customers. Alongside this, we progressed development of the Beeks Global Network, which will launch in FY27 with two new products: DDoS-Protected Internet and SRv6 Private Transports.
DDoS-Protected Internet will provide customers with high-performance internet connectivity and built-in protection against cyberattacks that overwhelm connections with traffic, helping to keep trading and other critical applications running with minimal delay. SRv6 Private Transports will enable customers to connect different locations through the Beeks private network, with options to meet their requirements for speed, resilience and encryption. Both products will be available to existing customers and organisations that do not currently use Beeks' infrastructure, broadening our addressable market and creating further opportunities to expand existing customer relationships. By offering connectivity alongside our cloud infrastructure and analytics capabilities, we will be able to meet more of our customers' technology needs and introduce new customers to the wider Beeks portfolio. Together, Private Cloud, Proximity Cloud®, Exchange Cloud® and Market Edge Intelligence® provide Beeks with four differentiated offerings addressing the infrastructure, connectivity and analytics requirements of global capital markets. Our specialist focus, proprietary technology and track record of innovation have established a unique position at the intersection of cloud technology and financial market infrastructure. With our offerings now proven and live across some of the world's most demanding financial institutions, we are continuing to extend our competitive lead, creating multiple routes to grow with both new and existing customers.
Sales and Marketing
Our sales and marketing activity remained focused on building relationships with Tier 1 financial institutions and supporting the conversion of opportunities across our four offerings. We continued to invest selectively in our commercial team and to strengthen engagement between our exchange customers and market participants, helping to demonstrate the value of Exchange Cloud® and support the development of new opportunities.
The increasing number of reference customers across exchanges, banks, brokers and other financial institutions is strengthening our position in the market. Customers are now able to see our technology operating successfully within some of the world's leading financial markets, supporting trust, shortening sales discussions and creating opportunities to extend relationships across products and geographies.
Customers
Beeks supports a broad range of capital markets participants, including exchanges, banks, brokers, hedge funds, cryptocurrency platforms, financial technology firms, payment providers and Independent Software Vendors. Between partners and exchanges, our platforms support more than 30 of the world's largest financial institutions, each with considerable potential for expansion.
During FY26, we built further momentum across this customer base, securing significant wins across each of our offerings:
·
Exchange Cloud® continued to build global momentum during the year. TMX and nuam became the sixth and seventh exchanges to adopt the offering, and the Group now has four revenue share arrangements in place. Existing deployments also progressed well, with both Kraken and ASX now profitable on a monthly basis. Kraken moved into phase two following strong take-up of its initial deployment. The Group continued to support established relationships including Grupo BMV and the Johannesburg Stock Exchange.
·
Analytics and Market Edge Intelligence® added a new customer group to the portfolio while deepening existing relationships, securing three contracts within months of launch. These included a five-year, $4.8m contract with one of the world's largest banks following a successful proof of concept; a contract with an existing global financial services customer; and a five-year, $3.0m contract with a leading North American exchange operator. Together, these wins contributed to approximately $10m of TCV secured across the Group in June 2026. The speed of adoption exceeded our expectations, validating demand among Tier 1 financial institutions and creating opportunities for further expansion across customers' wider trading infrastructure.
·
Proximity Cloud® delivered a strong year of customer wins and expansion. Contracts secured included a five-year agreement with a major South African bank, extensions with a large FX broker that increased the total value of that relationship to £6.0m over five years, and a further five-year contract with a large FX broker that had initially joined Beeks as a Private Cloud customer. These wins demonstrate both demand for dedicated, low-latency infrastructure and the opportunity to expand customers across our portfolio.
·
Private Cloud delivered the strongest recurring revenue growth across the Group. Wins during the year included more than $7m of contracts secured in August 2025 across several financial institutions and geographies, a three-year contract with a major Canadian bank and a further contract with a longstanding strategic partner. The performance of Private Cloud reflects the continued demand for secure, high-performance infrastructure and its important role as the foundation of the Group's recurring revenue base.
Future Growth and Outlook
We enter FY27 with encouraging momentum across all four offerings and a healthy pipeline of opportunities. ACMRR of c£34.0m provides a strong level of revenue visibility, while the Exchange Cloud® revenue share deployments already in operation are expected to make an increasing contribution as customer participation grows. Q1 has been very positive, as separately announced today, with a multi-year Exchange Cloud® win with the Stock Exchange of Thailand, in addition to c.$4m of Exchange Cloud® contract extensions.
While the timing of major contract awards remains inherently difficult to predict, the combination of growing recurring revenues and continued momentum in Exchange Cloud revenue share provides a high degree of revenue visibility for the year ahead. Accordingly, taking a prudent view of new customer wins, the Board expects FY27 revenue to be in the range of £43m to £48m, representing growth of between 7.5% and 20%, with an underlying EBITDA margin of between 38% and 42%.
The modernisation of global financial market infrastructure continues, as exchanges and financial institutions increasingly seek specialist partners able to deliver secure, resilient and low-latency technology. The size of the addressable opportunity across our offerings remains significant and competition is limited.
Our focus for FY27 remains on commercial execution: converting the pipeline, increasing participation across live Exchange Cloud® deployments, expanding within our existing customer base and building on the early success of Market Edge Intelligence®. We will continue to pursue these opportunities with the financial discipline that has always underpinned the business, supporting sustainable growth.
Gordon McArthur
CEO
19 October 2026
Strategic Report - Financial Review
Key Performance Indicator Review
FY26
FY25
Growth
Revenue1 (£m)
£39.98
£35.92
11%
ACMRR2 (£m)
£33.4m
£29.50
13%
Gross Profit (£m)
£16.18
£14.70
10%
Gross Profit margin3
40.5%
40.9%
(0.4%)
Underlying EBITDA4 (£m)
£16.10
£13.62
18%
Underlying EBITDA margin5
40.3%
37.9%
2.3%
Underlying Profit before tax6(£m)
£6.31
£5.49
15%
Underlying Profit before tax margin7
15.8%
15.3%
0.5%
Profit before tax (£m)
£3.94
£2.79
41%
Diluted EPS (pence)
4.51p
4.12p
9%
Underlying EPS8 (pence)
8.40p
8.47p
(1%)
1Revenue excludes grant income and rental income
2ACMRR is Annualised Committed Monthly Recurring Revenue
3Gross profit margin is statutory gross profit divided by Revenue
4Underlying EBITDA is defined as profit for the year excluding amortisation, depreciation, finance costs, taxation, acquisition costs, share based payments, exchange rate gains/losses on statement of financial position translation and exceptional non-recurring costs
5Underlying EBITDA margin is defined as Underlying EBITDA divided by Revenue
6Underlying profit before tax is defined as profit before tax excluding amortisation on acquired intangibles, acquisition costs, share based payments, exchange rate gains/losses on statement of financial position translation and exceptional non-recurring costs
7Underlying profit before tax margin is defined as Underlying profit before tax divided by Revenue
8Underlying EPS is defined as profit for the year excluding amortisation on acquired intangibles, acquisition costs, share based payments, exchange rate gains/losses on statement of financial position translation and exceptional non-recurring costs divided by the number of shares
The Group delivered revenue growth of 11% to £40.0m in FY26, supported by continued growth in Private Cloud and a strong contribution from new Proximity Cloud®, Exchange Cloud® and Analytics contracts, a number of which went live towards the end of the financial year. With underlying administrative expenses increasing by 5%, underlying EBITDA grew by 18% to £16.1m.
The same contracts explain the cash position. Much of their value is recognised on delivery but billed monthly over terms of up to five years, so contract assets rose by £6.1m to £17.7m. We also bought the hardware to deliver them ahead of the year end. Net cash therefore fell to £0.6m at 30 June 2026 (2025: £7.0m), and we expect it to rebuild as these contracts are billed. Since the year end we have agreed a £5m revolving credit facility with Barclays, which is undrawn, to give us more financial flexibility as well as room to keep investing in new customer deployments while the cash from this year's contracts comes through.
Revenue
Private/Public Cloud revenue grew 5% to £26.3m and remains the recurring foundation of the Group. Growth was more measured than in recent years, but the business continued to add customers and capacity We enter FY27 with a healthy Private Cloud pipeline across both new and existing customers.
Proximity/Exchange Cloud® had another healthy year, with revenue of £9.3m (2025: £10.3m). As a significant portion of the value of an upfront contract is recognised on delivery, revenue in any one year depends on when deployments go live, and most of this year's new contracts went live in May and June 2026.
Alongside these upfront contracts, our Exchange Cloud® revenue share model continues to grow. Under this model Beeks provides and retains the infrastructure and earns a share of the revenue the exchange generates over the life of the agreement, rather than an upfront fee. These agreements contributed £0.5m of revenue in FY26, and both Kraken and ASX are now profitable on a monthly basis, with revenue covering the monthly depreciation costs of each deployment. As participation on these venues builds, we expect revenue share income to become a material and recurring part of Group revenue from FY27 onwards.
Analytics was the standout of the year. Revenue rose to £4.4m (2025: £0.6m), following the launch of Market Edge Intelligence® and new contracts with three customers, including a Tier 1 bank. Analytics contracts combine software licences with hardware, connectivity and support. The licence and hardware are recognised when delivered and the services over the contract term, so a large part of FY26 Analytics revenue came from initial deployments.
Across Proximity Cloud®, Exchange Cloud® and Analytics we signed nine new contracts in the year, with a total contract value of £19.2m (2025: £19.1m). Of this, £11.5m was recognised on delivery during the year and £7.7m will be recognised over terms of up to five years.
Recurring revenue was 70% of total revenue (2025: 71%). The lower share reflects the higher proportion of upfront revenue from new contracts rather than any fall in the recurring base. ACMRR grew 13% to £33.4m, 15% on a constant currency basis (2025: £29.5m). Tier 1 customers accounted for 65% of revenue (2025: 54%).
Contract cancellation. During the year a Proximity Cloud® customer, now in the fourth year of its contract, disputed the remaining contract period. Reflecting the uncertainty over recovering the remaining contract value, we recognised a £0.5m impairment of the related contract asset (note 15).
Margins and costs
Gross profit rose 10% to £16.2m. Gross margin eased slightly to 40.5% (2025: 40.9%). The main reason is the £1.5m increase in depreciation and right-of-use charges, which sit in cost of sales and reflect the infrastructure added to deliver new contracts. The full benefit of that investment will come through as the new contracts are billed over their terms.
Underlying administrative expenses (administrative expenses excluding share-based payments and non-recurring costs) rose 5% to £9.7m (2025: £9.3m), around half the rate of revenue growth. Gross employee costs (before capitalised development costs and excluding share based payments within administration costs) rose to £9.0m (2025: £7.8m). Average headcount was 122 (2025: 102), with most of the increase in support and development roles to deliver the new Proximity Cloud®, Exchange Cloud® and Analytics deployments. We also strengthened our sales and pre-sales teams to build and convert the pipeline for these larger contracts.
We capitalised £2.4m of development costs (2025: £2.4m), of which £1.5m related to Proximity/Exchange Cloud® and £0.9m of which related to Analytics and Market Edge Intelligence.
Underlying profitability
Underlying EBITDA rose 18% to £16.1m (2025: £13.6m), and the underlying EBITDA margin improved to 40.3% (2025: 37.9%). Underlying profit before tax rose 15% to £6.3m (2025: £5.5m), a margin of 15.8% (2025: 15.3%).
Statutory profit before tax rose 41% to £3.9m (2025: £2.8m). The main difference from underlying profit is the £2.5m share-based payment charge, a non-cash cost which we exclude from our underlying measures, along with non-recurring costs, amortisation of acquired intangibles, grant income and intercompany exchange differences. The reconciliations are set out below.
Year ended 30 June 2026
Year ended 30 June 2025
£'000
£'000
Statutory Profit Before Tax
3,937
2,789
Add back:
Share Based Payments
2,510
2,551
Other Non-recurring costs*
113
113
Amortisation of acquired intangibles
121
130
Deduct:
Grant Income
(274)
(276)
Exchange rate (loss)/gain on intercompany translation
(32)
500
R&D tax credit
(67)
(322)
Underlying Profit before tax for the year
6,308
5,485
Net finance income was £0.1m (2025: £nil). Finance income of £0.8m (2025: £0.4m) is the financing element of contracts billed over time, and finance costs of £0.7m (2025: £0.4m) are mainly interest on leases and asset finance.
Year ended 30 June 2026
Year ended 30 June 2025
£'000
£'000
EBITDA***
13,853
11,045
Add back:
Share Based Payments
2,510
2,551
Other Non-recurring costs*
113
113
Deduct:
Grant Income
(274)
(276)
Exchange rate losses on intercompany translation
(32)
501
R&D tax credit
(67)
(322)
Underlying EBITDA ****
16,103
13,612
*Other non-recurring costs in the year relates exceptional costs in relation to one off staff termination payments, and other one off property costs. Prior year non-recurring costs were incurred due to refinancing and one off property costs. All of these costs are not expected to recur and are therefore disclosed separately to trading results.
**Underlying profit before tax is defined as profit before tax excluding amortisation on acquired intangibles, acquisition costs, share based payments, exchange rate gains/losses on statement of financial position translation and exceptional non-recurring costs
***EBITDA is defined as earnings before interest, tax, depreciation and amortisation
****EBITDA is defined as earnings before interest, tax, depreciation, amortisation, acquisition costs, share based payments and non-recurring costs
Taxation and Earnings per Share
The total tax charge for the year was £624k (2025: £177k credit), an effective tax rate of 15.9% (2025: (6.4%)).
Current tax was £66k (2025: £127k), mainly overseas tax in the US, with UK taxable profits largely sheltered by brought forward losses and share option deductions. The deferred tax charge of £558k (2025: £304k credit) mainly reflects higher capital allowances following the year's investment in data centre infrastructure and the use of brought forward losses, partly offset by an increase in the deferred tax asset on share options (which moves with the year-end share price). The effective rate is below the UK statutory rate of 25%, mainly because tax deductions on share options exercised in the year exceeded the share-based payment charge, which is not deductible. Prior year adjustments also reduced the charge by £206k.
With approximately £16m of UK tax losses carried forward, cash tax payments are expected to remain low in the near term. See notes 9 and 13.
Basic earnings per share was 4.88p (2025: 4.43p) and diluted earnings per share 4.51p (2025: 4.12p). Underlying basic earnings per share was 8.40p (2025: 8.47p) and underlying diluted earnings per share 7.62p (2025: 7.60p). The year-on-year tax movement of £0.8m reduced underlying diluted EPS by around 1.1p, so before tax underlying earnings per share grew broadly in line with underlying PBT. See note 25.
Statement of Financial Position
Net assets rose to £48.7m (2025: £43.2m). The main movements were:
·
Contract assets rose to £17.7m (2025: £11.6m), of which £13.2m is due after more than one year. This is the value of Proximity Cloud®, Exchange Cloud® and Analytics contracts recognised on delivery but billed monthly over their terms. These amounts are contracted and will convert to cash over the remaining contract terms of up to five years, with £4.5m expected to be billed within the next 12 months and £13.2m thereafter, supporting cash generation in the years ahead.
·
Property, plant and equipment rose to £21.5m (2025: £19.8m) as we added data centre capacity and hardware for new deployments.
·
Intangible assets were broadly unchanged at £9.0m (2025: £9.2m), with £2.4m of development spend offset by amortisation. We expect development capitalisation and amortisation to remain broadly in balance going forward, reflecting a consistent level of investment in our platforms. Inventory rose to £3.7m (2025: £2.6m), held to support near-term Proximity Cloud® and Exchange Cloud® deployments. During the year we took the decision to build stock of key hardware components ahead of the well-publicised increases in component prices, particularly memory, driven by demand for AI infrastructure. This has protected the cost of delivering our near-term Proximity Cloud®, Exchange Cloud® and Analytics deployments. The pace of price increases has since moderated, and we will continue to manage stock levels in line with our deployment pipeline.
·
LMHI investment. In August 2025 we invested US$1.1m (£0.8m) in Liquid-Markets-Holdings, the developer of ÜberNIC technology, through a Simple Agreement for Future Equity (SAFE) that converts into equity on its next funding round. It is held at fair value (note 10).
·
Lease liabilities rose to £8.2m (2025: £5.9m), including £3.2m of asset finance, reflecting new data centre leases on discounted terms and financed hardware.
Cash and working capital
Net cash generated from operating activities was £6.3m (2025: £9.4m). Before working capital, operating cash flow increased 26% to £17.8m (2025: £14.1m), showing the strong cash generation of the underlying business.
Working capital absorbed £10.2m in the year (2025: £4.3m). This mainly reflects a £6.9m increase in receivables and contract assets, as revenue on new Proximity Cloud®, Exchange Cloud® and Analytics contracts is recognised on delivery while customers are billed monthly over contract terms of up to five years. These amounts are contracted and will convert to cash as they are billed, with £4.5m expected within the next 12 months. Contract assets will continue to build while upfront revenue remains significant, and we are increasingly seeking upfront payment, particularly for hardware, to reduce the working capital invested ahead of billing. Payables fell by £2.8m, reflecting the settlement of hardware creditors outstanding at the FY25 year end, and we increased inventory by £0.6m to secure key components ahead of price increases.
We invested £8.8m in the business during the year (2025: £7.0m): £6.3m on data centre infrastructure and hardware to support new deployments and revenue share agreements, and £2.4m on capitalised development. We also invested £0.8m in Liquid-Markets-Holdings through a SAFE. Much of this investment was made ahead of the related revenue, and we expect the return on it to come through as contracted billings convert to cash in FY27 and beyond.
Funding
We financed part of this investment with £3.7m of new asset finance and a £1.5m bank loan, while repaying £0.8m of asset finance liabilities. Cash at 30 June 2026 was £5.4m (2025: £7.4m) and net cash was £0.6m (2025: £7.0m). Gross borrowings of £4.7m were 0.3 times underlying EBITDA.
After the year end we agreed a £5m revolving credit facility with Barclays, which is currently undrawn. The facility strengthens our liquidity and gives us more financial flexibility as well as room to continue to invest in new deployments while the cash from this year's contracts comes through.
Looking ahead
Our financial priorities for the year are to:
·
scale our revenue share model: bring the Exchange Cloud® revenue share deployments we have invested in up to full contribution, building a recurring and increasingly material revenue stream;
·
improve cash conversion on new contracts: prioritise Proximity Cloud®, Exchange Cloud® and Analytics deals with upfront or milestone payments, so that cash collection more closely matches revenue recognition;
·
convert contract assets into cash: collect the £17.7m of contracted billings built up on this year's contracts, £4.5m of which is due within the next 12 months;
·
continue to invest with discipline and rebuild net cash: keep capital expenditure tied to signed contracts and the near-term pipeline, with our undrawn £5m facility providing additional financial headroom to keep investing where customers are committing.
With a growing base of recurring revenue, a larger contracted book and a clear focus on cash, we are well placed to deliver another year of profitable growth.
Fraser McDonald
Chief Financial Officer
19 October 2026
Consolidated Statement of Comprehensive Income
2026
2025
Note
£000
£000
Revenue
3
39,984
35,918
Other Income
3
396
694
Cost of sales
(24,196)
(21,907)
Gross profit
16,184
14,705
Administrative expenses
(12,337)
(11,942)
Operating profit
4
3,847
2,763
Analysed as
Earnings before depreciation, amortisation, acquisition costs, share based payments and non-recurring costs:
16,489
13,708
Depreciation
12
(7,174)
(5,669)
Amortisation - acquired intangible assets
11
(121)
(276)
Amortisation - other intangible assets
11
(2,724)
(2,336)
Share based payments
22
(2,511)
(2,551)
Other non-recurring costs
4
(112)
(113)
Operating profit
3,847
2,763
Finance income
6
745
408
Finance costs
5
(655)
(382)
Profit before taxation
3,937
2,789
Taxation
9
(624)
177
Profit after taxation for the year attributable to the owners of Beeks Financial Cloud Group PLC
3,313
2,966
Other comprehensive income
Amounts which may be reclassified to profit and loss
Currency translation differences
24
(31)
Total comprehensive income for the year attributable to the owners of Beeks Financial Cloud Group PLC
3,337
2,935
Pence
Pence
Basic earnings per share
25
4.88
4.43
Diluted earnings per share
25
4.51
4.12
The above income statement should be read in conjunction with the accompanying notes.
Consolidated Statement of Financial Position
2026
2025
Note
£000
£000
Non-current assets
Investments
10
829
-
Intangible assets
11
9,036
9,165
Trade and other receivables
15
13,197
8,000
Property, plant and equipment
12
21,537
19,792
Deferred tax
13
2,094
3,068
46,693
40,025
Current assets
Trade and other receivables
15
9,636
7,711
Inventories
14
3,714
2,607
Cash and cash equivalents
16
5,374
7,357
18,724
17,675
Total assets
65,417
57,700
Liabilities
Non-current liabilities
Borrowings
18
1,500
-
Trade and other payables
19
270
11
Lease liabilities
18
4,328
3,475
Total non-current liabilities
6,098
3,486
Current liabilities
Trade and other payables
19
6,808
8,580
Lease liabilities
20
3,861
2,417
Total current liabilities
10,669
10,997
Total liabilities
16,767
14,483
Net assets
48,650
43,217
Equity
Issued capital
21
85
84
Share premium
23
23,775
23,775
Reserves
23
8,815
7,668
Retained earnings
15,975
11,690
Total equity
48,650
43,217
These financial statements were approved by the Board of Directors on 9th October 2026 and were signed on its behalf by:
Gordon McArthur, Chief Executive Officer,
Beeks Financial Cloud Group Plc,Company number: SC521839
The above statement of financial position should be read in conjunction with the accompanying notes.
Consolidated Statement of Changes in Equity
Issued capital
Foreign currency reserve
Merger reserve
Other reserve
Share based payments
Share premium
Retained earnings
Total equity
£000
£000
£000
£000
£000
£000
£000
£000
Balance at 30 June 2024
83
78
705
(315)
5,829
23,775
7,340
37,495
Profit after income tax expense for the year
-
-
-
-
-
-
2,966
2,966
Currency translation difference
-
(31)
-
-
-
-
-
(31)
Total comprehensive income
-
(31)
-
-
-
-
2,966
2,935
Deferred tax
-
-
-
-
-
-
235
235
Issue of share capital
1
-
-
-
-
-
-
1
Share based payments
-
-
-
-
2,551
-
-
2,551
Exercise of share options
-
-
-
-
(1,149)
-
1,149
-
Total transaction with owners
1
-
-
-
1,402
-
1,384
2,787
Balance at 30 June 2025
84
47
705
(315)
7,231
23,775
11,690
43,217
Profit after income tax expense for the year
-
-
-
-
-
-
3,313
3,313
Currency translation difference
-
24
-
-
-
-
-
24
Total comprehensive income
-
24
-
-
-
-
3,313
3,337
Deferred tax
-
-
-
-
-
-
(416)
(416)
Issue of share capital
1
-
-
-
-
-
-
1
Share based payments
-
-
-
-
2,511
-
-
2,511
Exercise of share options
-
-
-
-
(1,388)
-
1,388
-
Total transaction with owners
1
-
-
-
1,123
-
972
2,096
Balance at 30 June 2026
85
71
705
(315)
8,354
23,775
15,975
48,650
The above statement of changes in equity should be read in conjunction with the accompanying notes
Consolidated Cash Flow Statement
2026
2025
Note
£'000
£'000
Cash flows from operating activities
Profit for the year before tax
3,937
2,789
Adjustments for:
Depreciation of tangible fixed assets
12
7,143
5,669
Amortisation of intangible assets
11
2,845
2,612
Property, plant and equipment transferred to
cost of sales
1,174
501
Interest payable on bank loans
5
40
6
Lease liability interest
5
399
229
Share based payment charge
7
2,511
2,551
Proceeds from grant income
(275)
(276)
Operating cash flows
17,774
14,081
(Increase) in receivables
15
(6,816)
(8,253)
(Increase) in inventories
14
(1,636)
(1,527)
(Decrease) / Increase in payables
19
(1,387)
5,527
Operating cash flows after movement in working capital
7,935
9,828
Corporation tax paid
(174)
97
Net cash generated from operating activities
7,761
9,925
Cash flows from investing activities
Purchase of other financial assets
10
(829)
-
Purchase of property, plant and equipment
12
(7,781)
(5,083)
Capitalised development costs
11
(2,437)
(2,444)
Proceeds from share issue
1
1
Net cash used in investing activities
(11,046)
(7,526)
Cash flows from financing activities
Repayment of lease liabilities
18
(3,409)
(2,467)
Interest on lease liabilities
20
(399)
(229)
Interest payable on bank loans
5
(40)
(6)
Proceeds from asset finance
18
3,685
-
Proceeds from bank loan
18
1,500
-
Net cash generated from financing activities
1,337
(2,702)
Net (decrease) in cash and cash equivalents
(1,948)
(302)
Effects of exchange rates on cash and cash equivalents
(35)
(42)
Cash and cash equivalents at beginning of year
16
7,357
7,701
Cash and cash equivalents at end of year
16
5,374
7,357
The above cash flow statement should be read in conjunction with the accompanying notes
Notes to the Consolidated Financial Statements
1. Summary of significant accounting policies
Corporate information
Beeks Financial Cloud Group PLC is a public limited company which is listed on the AIM Market of the London Stock Exchange and is incorporated in Scotland. The address of its registered office is Riverside Building, 2 Kings Inch Way, Renfrew, Renfrewshire, PA4 8YU. The principal activity of the Group is the provision of information technology services and products. The registered number of the Company is SC521839.
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
Basis of preparation
These financial statements have been prepared in accordance with UK-adopted International Financial Reporting Standards (IFRS) and with the requirements of the Companies Act 2006. The financial statements are prepared in pounds sterling because that is the currency of the primary economic environment in which the Group operates.
The financial statements have been prepared on the historical cost basis except for the valuation of certain financial instruments that are measured at fair values at each reporting period, as explained in the accounting policies below.
The measurement bases and principal accounting policies of the Group are set out below and are consistently applied to all years presented unless otherwise stated.
Adoption of new and revised standards
The following amendment became effective for the Group for the year ended 30 June 2026:
· Lack of Exchangeability (Amendments to IAS 21).
This amendment did not have a material impact in preparing these financial statements.
There are a number of standards and amendments to standards which have been issued by the IASB that are effective in future accounting periods and have not been adopted early.
The following amendments are effective for annual reporting periods beginning on or after 1 June 2027:
· Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7);
· Contracts Referencing Nature-dependent Electricity (Amendments to IFRS 9 and IFRS 7);
· Annual Improvements to IFRS Accounting Standards - Volume 11 (covering amendments to IFRS 1, IFRS 7, IFRS 9, IFRS 10 and IAS 7).
The following standards are effective for annual reporting periods beginning on or after 1 January 2027:
· IFRS 18 Presentation and Disclosure in Financial Statements, which will change the presentation of the Consolidated Statement of Comprehensive Income and introduce disclosure requirements for management-defined performance measures, such as underlying EBITDA and underlying profit before tax;
· IFRS 19 Subsidiaries without Public Accountability: Disclosures, which is not expected to apply to the Group.
The Group is currently assessing the impact of IFRS 18. Beyond the information above, it is not practicable to provide a reasonable estimate of the effect of these standards until a detailed review has been completed.
Going concern
The key factors considered by the Directors were:
· Historic and current trading and profitability of the Group
· The rate of growth in sales both historically and forecast
· The competitive environment in which the group operates
· The current level of cash reserves
· The finance facilities available to the Group, including the availability of any short term funding required through the use of the Revolving Credit Facility acquired post year end
The financial position of the Group, its cash flows and liquidity position are described in the Strategic Report - Financial Review.
The directors take comfort from the resilience of our business model. The level of customer churn across our business has remained low and cash collection has been in line with our typical profile. We do however remain vigilant to the economic impact the ongoing macro-economic environment may create, particularly on the SME segment of the market.
Note 17 to the financial statements includes the Group's objectives, policies and processes for managing its capital; its financial risk management objectives; details of its financial instruments and hedging activities; and its exposures to credit risk and liquidity risk.
The directors are of the opinion that the Group can operate within their current levels of cash reserves including further financing facilities available. At the end of the financial year, the Group had gross cash of £5.37m (2025: gross cash £7.36m) a level which the Board is comfortable with given the strong cash generation of the Group and low level of debt to EBITDA ratio. The Group has a diverse portfolio of customers and suppliers with long‐term contracts across different geographic areas. As a consequence, the directors believe that the Group is well placed to manage its business risks.
The directors have considered the Group budgets and the cash flow forecasts to December 2027, and associated risks including the risk of climate change and the impact on our data centre estate, useful economic life of assets, and the availability of bank and leasing facilities. On 6th October 2026, the Group agreed a £5.0m revolving credit facility with Barclays Bank PLC, available until October 2028. The facility is currently undrawn. We have run appropriate scenario and stress tests applying reasonable downside sensitivities in respect of profitability and associated cash flow generation and are confident we have the resources to meet our liabilities as they fall due for a period of at least 12 months from the date of these financial statements.
After making enquiries, the directors have a reasonable expectation that the Group will be able to meet its financial obligations and has adequate resources to continue in operational existence for the foreseeable future. For this reason they continue to adopt the going concern basis in preparing the financial statements.
Accordingly, the Directors have adopted the going concern basis in preparing the Report for the year ended 30 June 2026.
Principles of consolidation
Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary or a business is the fair values of the assets transferred, the liabilities incurred to former owners of the acquiree and the equity interests issued to the Group.
The consideration transferred includes the fair values of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values on the acquisition date.
Acquisition related costs are expensed as incurred. As each of the subsidiaries are 100% wholly owned the Group has full control over each of its investees. Intercompany transactions, unrealised gains and losses on intragroup transactions and balances between group companies are eliminated on consolidation.
Foreign currency transactions
In line with IAS 21 foreign currency transactions are translated into pound sterling using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss. Foreign exchange gains and losses resulting from the retranslation of inter-company balances are recognised in profit or loss. Non-monetary assets are translated at the historical rate.
Foreign operations
The assets and liabilities of foreign operations are translated into pound sterling using the exchange rates at the reporting date. The revenues and expenses of foreign operations are translated into Pound sterling using the average exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange differences are recognised in other comprehensive income through the foreign currency reserve in equity.
Business Combinations
Acquisitions of subsidiaries are accounted for using the acquisition method. The acquisition method involves the recognition at fair value of all identifiable assets and liabilities, including contingent liabilities of the subsidiary, at the acquisition date, regardless of whether or not they were recorded in the financial statements of the subsidiary prior to acquisition. On initial recognition, the assets and liabilities of the subsidiary are included in the statement of financial position at their fair values, which are also used as the bases for subsequent measurement in accordance with the Group accounting policies.
Where the Group's assessment of the net fair value of a subsidiary's identifiable assets acquired and liabilities assumed is less than the fair value of the consideration including contingent consideration of the business combination then the excess is treated as goodwill. Where the Group's assessment of the net fair value of a subsidiary's net assets and liabilities exceeds the fair value of the consideration including contingent consideration of the business combination then the excess is recognised through profit or loss immediately. Where an acquisition involves a potential payment of contingent consideration the estimate of any such payment is based on its fair value. To estimate the fair value an assessment is made as to the amount of contingent consideration which is likely to be paid having regard to the criteria on which any sum due will be calculated and is probability based to reflect the likelihood of different amounts being paid. Where a change is made to the fair value of contingent consideration within the initial measurement period as a result of additional information obtained on facts and circumstances that existed at the acquisition date then this is accounted for as a change in goodwill. Where changes are made to the fair value of contingent consideration as a result of events that occurred after the acquisition date then the adjustment is accounted for as a charge or credit to profit or loss.
The Group's accounting policy for common control transactions is to recognize and measure such transactions at carrying amounts, with no gain or loss recognized in the financial statements. This policy ensures consistency and comparability in the treatment of transactions within the Group.
Other investments
Investments in entities over which the Group has neither control, joint control nor significant influence are accounted for as financial assets under IFRS 9.
Investments in equity instruments, and in instruments that convert into equity such as simple agreements for future equity, are measured at fair value through profit or loss, unless the Group makes an irrevocable election on initial recognition to present changes in the fair value of an equity investment in other comprehensive income.
Such investments are initially recognised at fair value, which is normally the transaction price, with transaction costs expensed as incurred. They are subsequently remeasured to fair value at each reporting date. Where there is no quoted market price, fair value is determined using valuation techniques based on the best information available, as described in the fair value measurement policy.
Revenue recognition
Revenue arises from the provision of Cloud-based localisation. To determine whether to recognise revenue, the group follows a five-step process as follows:
· Identifying the contract with a customer
· Identifying the performance conditions
· Determining the transaction price
· Allocating the transaction price to the performance conditions
· Recognising revenue when/as performance obligation(s) are satisfied.
Revenue is measured at transaction price, stated net of VAT and other sales related taxes and discounts, if applicable.
The below outlines all the Group's revenue streams and associated accounting policies:
Infrastructure as a Service (IaaS)
The group's core business provides managed Cloud computing infrastructure and connectivity. The Group considers the performance obligation to be the provision of access and use of servers to our clients. As the client receives and consumes the benefit of this use and access over time, the related revenue is recognised evenly over the life of the contract.
Monitoring software and maintenance services
The group also provides software products that analyse and monitor IT infrastructure. Revenue from the provision of software licences is split between the delivery of the software licence and the ongoing services associated with the support and maintenance. The supply of the software licence is recognised on a point in time basis when control of the goods has transferred, being the delivery of the item to the customer, whilst the ongoing support and maintenance service is recognised evenly over the period of the service being rendered on an over time basis. The group applies judgement to determine the percentage of split between the licence and maintenance portions, which includes an assessment of the expected cost plus margin that would be received in a standalone sale of the performance obligations.
Where an agreement includes a royalty fee as a result of future sales by a customer to third parties and there is a minimum amount guaranteed, this is recognised at point in time when the delivery of the item is complete.
Set up fees
Set up fees charged on contracts are reviewed to consider the material rights of the set-up fee. When a set-up fee is arranged, Beeks will consider the material rights of the set-up fee, if in substance it constitutes a payment in advance, the set-up fee will be deemed to be a material right. The accounting treatment for both material rights and non-material rights set-up fees is as follows:
· Any set up fees that are material rights are spread over the group's average contract term
· Set up fees that are not material rights are recognised over the enforceable right period, i.e. 1 to 3 months depending on the termination period
Revenue in respect of installation or training, as part of the set-up, is recognised when delivery and installation of the equipment is completed on a point in time basis.
Hardware and software sales
Revenue from the supply of hardware is recognised when control of the goods has transferred. For hardware, this occurs upon delivery and installation of the item to the customer. The Group's software licences give customers a right to use the Group's intellectual property as it exists when the licence is granted. Other than unspecified upgrades, which are accounted for as a separate performance obligation, the Group does not carry out activities during the licence term that significantly change the software, so licence revenue is recognised at a point in time when the customer is able to use and benefit from the licence.
The Group has concluded it acts as a principal in each hardware sales transaction vs an agent. This has been determined by giving consideration to whether the Group holds inventory risk, has control over the pricing over a particular service, takes the credit risk, and whether responsibility ultimately sits within the Group to service the promise of the agreements. Refer to note 2 for more detail on these considerations.
Professional and consultancy services
Revenue from professional and consultancy services are recognised using the output method as these services are rendered and the performance obligation satisfied. Any unearned portion of revenue (i.e. amounts invoiced in advance of the service being provided) is included in payables as a contract liability.
Proximity and Exchange Cloud® Services
Proximity and Exchange Cloud® are a fully-managed and configurable compute, storage and analytics racks built with industry-leading low latency hardware that allow capital markets and financial services customers to run compute, storage and analytics on-premise.
Revenue from the sale of Proximity and Exchange Cloud® contracts has been assessed under IFRS 15 and using the five step process, the following performance obligations have been identified:
· Delivery and installation of the hardware, and provision of the software licence
· Delivery of maintenance and technical support over the contract
· Delivery of unspecified upgrades and future software releases
The delivery and installation of the hardware, and provision of the software licence are highly interrelated and considered to be one performance obligation. Management have assessed that the software is the predominant item within the performance obligation as it is the functionality and use of the developed software that provides benefit to the customer, furthermore the purpose of the contract is for provision of the software licence with the hardware being required to facilitate this. This is recognised on a point in time basis when the control of the goods have been transferred, being when delivery of the item is completed and the right to use the software is granted to the customer. This is further explained in significant judgements.
The maintenance and technical support, as well as the delivery of the unspecified upgrades and future software releases are recognised evenly on an over time basis over the period of the contract. The performance obligation for both is considered to be that of standing ready to provide technical product support and unspecified updates, optional upgrades and enhancements when made available over the period of service being rendered.
These contracts include multiple deliverables. The Group applies judgement to determine the transaction price to be allocated between a) the delivery and installation of the hardware and provision of the software licence, recognised on a point in time basis and b) the stand ready services (support, maintenance, unspecified upgrades) recognised over time. The Group applies the expected cost plus margin approach to the stand ready services and the delivery and installation of the hardware and provision of software licence is estimated using the residual approach, given this is a new product to market and standalone selling prices are not directly observable. Any discount is allocated to all performance obligations in proportion to their standalone selling prices, unless there is observable evidence that it relates to one or more, but not all, of them. Further detail is provided within the critical accounting judgements and key sources of estimation uncertainty in note 2.
Where such contracts include a significant financing component, the group also adjusts the transaction price to reflect the time value of money. Finance income is recognised as other income in the statement of the comprehensive income.
Revenue recognised over time and at a point in time is disclosed at note 3 of the notes to the financial statements.
Analytics, including Market Edge Intelligence®
Analytics contracts include a software licence, hardware, and depending on the contract, connectivity and colocation services, and support and maintenance. Each is a separate performance obligation, as the customer can benefit from each element on its own or together with resources readily available to it. The software licence is recognised at a point in time when the licence key is made available and the customer is able to use the software. Hardware is recognised at a point in time when control passes on delivery and installation. Connectivity, colocation and support are recognised over time as the services are provided as performed. Standalone selling prices are estimated using an expected cost plus margin approach or observable third-party prices, with the residual allocated to the licence.
Revenue share arrangements
Under certain Exchange Cloud® agreements the Group provides and retains ownership of the infrastructure and receives a share of the revenue the exchange earns from the service, rather than an upfront fee. As control of the hardware does not pass to the customer, no hardware revenue is recognised and the hardware is held within property, plant and equipment. The consideration is variable and is recognised as the exchange's underlying revenue is earned and the services are provided over time.
Government grant income
Grants from Government agencies are recognised where there is reasonable assurance that the grant will be received, and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is deducted from carrying amount of the intangible asset over the expected useful life of the related asset. Note 3 Revenue provides further information on Government grants.
Research and development expenditure credits
The Group claims research and development expenditure credits under the UK merged R&D scheme. These are accounted for as government grants under IAS 20, as the credit is received in cash regardless of the Group's tax position and is taxable. A credit is recognised when there is reasonable assurance that it will be received.
The part of the credit relating to development costs that have been capitalised as intangible assets is deferred and released to the income statement over five years, in line with the amortisation of the related assets The part relating to research and development costs that have been expensed is recognised in other income in the year the related costs are incurred. Deferred amounts are included within trade and other payables deferred income (note 19).
Rental Income
Rental income from the head office property leased out under operating leases is recognised in the statement of the comprehensive income as other income as these services are rendered, as the tenant occupies the space.
Cost of sales
Costs considered to be directly related to revenue are accounted for as cost of sales. All direct production costs and overheads, including indirect overheads that can reasonably be allocated as relating to the Group's revenue generation, have been classified as cost of sales.
Where assets are purchased under a finance lease arrangement, they are recognised initially as Right of Use Assets and disclosed within the Property plant and equipment note 12. Assets that are subsequently sold as part of a Proximity or Exchange Cloud® contract are transferred to profit and loss as cost of sales.
Interest
Interest revenue is recognised as part of the financing component within some Proximity Cloud® and Software Licencing contracts. Interest accrues using the effective interest method. This is a method of calculating the amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash flows through the expected life of the financial asset to the net carrying amount of the financial asset.
Other non-recurring costs
The Group defines other non-recurring costs as costs incurred by the Group which relate to material non-recurring costs. These are disclosed separately where it is considered it provides additional useful information to the users of the financial statements.
Taxation and deferred taxation
The income tax expense or income for the period is the tax payable on the current period's taxable income. This is based on the national income tax rate enacted or substantively enacted for each jurisdiction with any adjustment relating to tax payable in previous years and changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in financial statements.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applicable when the asset or liability crystallises based on current tax rates and laws that have been enacted or substantively enacted by the reporting date. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability.
A deferred tax asset is regarded as recoverable and therefore recognised only when, on the basis of all available evidence, it can be regarded as more likely than not that there will be suitable taxable profits against which to recover carried forward tax losses and from which the future reversal of temporary differences can be deducted. The carrying amount of deferred tax assets are reviewed at each reporting date.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the Group's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Cash and cash equivalents
Cash at bank, overnight and longer term deposits which are held for the purpose of meeting short term cash commitments are disclosed within cash and cash equivalents.
Financial instruments
A financial instrument is any contract that gives rise to a financial asset in one entity and a financial liability or equity instrument in another and is recognised when the Group becomes party to the contractual provisions of the instrument.
Financial assets and liabilities are recognised initially at fair value, and subsequently measured at amortised cost, with any directly attributable transaction costs adjusted against fair value at initial recognition and recognised immediately in the Consolidated income statement as a profit or loss.
Financial assets
Trade and other receivables
Trade and other receivables are initially recognised at transaction price, less allowances for impairment. These are subsequently measured at amortised costs using the effective interest method. An allowance for impairment of trade and other receivables is established when there is evidence that Beeks Financial Cloud Group PLC will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtors, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 90 days overdue) are considered indicators that the trade and other receivables may be impaired. The amount of the allowance is the difference between the asset's carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate. The carrying amount of the asset is reduced through the use of an allowance account, and the amount of the loss is recognised in profit or loss within expenses. When a trade or other receivable is uncollectible, it is written off against the allowance account for trade and other receivables. Subsequent recoveries of amount previously written off are credited against 'administrative expenses' in the Consolidated statement of comprehensive income.
IFRS 9 requires an expected credit loss ("ECL") model which requires the Group to account for expected credit losses and changes in those expected credit losses at each reporting date to reflect changes in credit risk since initial recognition of the financial assets. The main financial assets that are subject to the expected credit loss model are trade receivables and contract assets, which consist of billed receivables arising from contracts.
The Group has applied the simplified approach to providing for expected credit losses ("ECL") prescribed by IFRS 9, which permits the use of lifetime expected loss provision for all trade receivables.
The ECL model reflects a probability weighted amount derived from a range of possible outcomes. To measure the ECL, trade receivables and contract assets have been grouped based on shared credit risk characteristics and the days past due. The Group has established a provision matrix based on the payment profiles of historic and current sales and the corresponding credit losses experienced. The historical loss rates are adjusted to reflect current and forward-looking information that might affect the ability of customers to settle the receivables, including macroeconomic factors as relevant.
Provision against trade and other receivables is made when there is evidence that the Group will not be able to collect all amounts due to it in accordance with the original terms of those receivables. The amount of the write-down is determined as the difference between the asset's carrying amount and the present value of estimated future cash flows. An assessment for impairment is undertaken at least at each reporting date.
Where a financing component is applicable, the Group has chosen to measure any loss allowance at an amount equal to lifetime expected credit losses.
Financial liabilities
Trade and other payables
Trade and other payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. These amounts represent liabilities for goods and services provided to Beeks Financial Cloud Group PLC prior to the end of the financial period which are unpaid as well as any outstanding tax liabilities.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are subsequently measured at amortised cost using the effective interest method.
Defined contribution schemes
The defined contribution scheme provides benefits based on the value of contributions made. Contributions to the defined contribution superannuation plans are expensed in the period in which they are incurred.
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; and assumes that the transaction will take place either: in the principal market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximising the use of relevant observable inputs, and minimising the use of unobservable inputs.
Inputs determining fair value measurements are categorised info different levels based on how observable the inputs used in the valuation technique utilised are (the "fair value hierarchy"):
· Level 1: Quoted prices in active markets for identical items (unadjusted).
· Level 2: Observable direct or indirect inputs other than Level 1 inputs.
· Level 3: Unobservable inputs (i.e. not derived from market data).
The Group's investment in Liquid-Markets-Holdings Incorporated, held through a Simple Agreement for Future Equity, is measured at fair value through profit or loss and is classified as Level 3, as its fair value is estimated using unobservable inputs. The valuation technique, the significant unobservable inputs and the sensitivity of the fair value to those inputs are set out in note 10 and in the critical accounting estimates in note 2.
The classification of an item into the above levels is based on the lowest level of input used that has a significant effect on the fair value of the item.
The Group's other investments (note 10) are measured at fair value through profit or loss and are classified as Level 3. Trade and other receivables (note 15), trade and other payables (note 19) and borrowings (note 18) are measured at amortised cost, and their carrying amounts approximate their fair values. Share-based payments (note 22) are measured at fair value at the grant date in accordance with IFRS 2.For more detailed information in relation to the fair value of the items above please refer to the applicable notes.
Share based payments
The Group operates equity-settled share based remuneration plans for its employees. Options are measured at fair value at grant date using the Black Scholes model. Where options are redistributed, options are measured at fair value at the redistribution date using the Black Scholes Model. The fair value is expensed on a straight line basis over the vesting period, based on an estimate of the number of options that will eventually vest. Fair value is appraised at the grant date and excludes the impact of non-market vesting conditions (for example, profitability growth targets).
Under the Group's share option scheme, share options are granted to directors and selected employees. The options are expensed in the period over which the share based payment vests. A corresponding increase to the share based payment reserve in equity is recognised.
When share options are exercised, the company issues new shares. The nominal share value from the proceeds received are credited to share capital and proceeds received above nominal value, net of attributable transaction costs, are credited to the share premium when the options are exercised. When share options are forfeited, cancelled, or expire, the corresponding fair value is transferred to the retained earnings reserve. Amounts held in the share based payments reserve are transferred to Retained Earnings on exercise of the related options.
The Group has no legal or constructive obligation to repurchase or settle the options in cash.
Where the Group entity incurs a share based payment charge relating to subsidiary employees, the charge is treated as a capital contribution in the subsidiary and an increase in investment in the Group entity.
Property, plant and equipment (PPE)
PPE is stated at historical cost less accumulated depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to Beeks Financial Cloud Group PLC and the cost of the item can be measured reliably. All other repairs and maintenance are charged to profit or loss during the financial period in which they are incurred.
Depreciation on IT infrastructure and fixtures and fittings is calculated using the straight line method to allocate their cost or revalued amounts, net of their residual values, over their estimated useful lives, as follows:
· Leasehold property and improvements over the lease period
· Freehold property over 50 years
· Computer Equipment over 5 years and over the length of lease
· Office equipment and fixtures and fittings over 5-20 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
Leasehold improvements and plant and equipment under lease are depreciated over the unexpired period of the lease or the estimated useful life of the assets, whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the Group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss. Any revaluation surplus reserve relating to the item disposed of is transferred directly to retained profits.
Where assets are purchased under a finance lease arrangement, they are recognised as Right of Use Assets and disclosed within the Property plant and equipment note 12. Where these assets are subsequently sold as part of a Proximity or Exchange Cloud® contract, they are transferred from PP&E to stock and thereafter to the profit and loss as cost of sales.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost includes all expenses directly attributable to bringing the asset to its current condition. Costs of ordinarily interchangeable items are assigned using the first in, first out cost formula. Net realisable value is the estimated selling price in the ordinary course of business less any directly attributable selling expenses.
Where inventories are purchased under a finance lease arrangement, they are recognised initially as Right of Use Assets and disclosed within the Property plant and equipment note 12.
Inventories that are subsequently sold as part of a Proximity or Exchange Cloud® contract are transferred to profit and loss as cost of sales.
At each reporting date, inventories are reviewed for impairment, including an annual assessment of slow-moving and aged hardware to confirm it remains usable for deployment or sale. Where items are obsolete or surplus to requirements, or the carrying amount exceeds estimated selling price less costs to complete and sell, inventory is written down to net realisable value. Write-downs, and any subsequent reversals limited to the original write-down, are recognised in profit or loss.
Assets held at Head Office are classified and disclosed as inventory until the point in which the assets purpose is identified. At the point, the asset will either be transferred to property, plant and equipment and sold under Infrastructure-as-a-Service (IaaS) or sold to a customer under a Proximity or Exchange Cloud® solution and transferred to Cost of Sales within the Income statement.
Leases
A lease is defined as a contract, or part of a contract, that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration. To apply this definition the Group assesses whether the contract meets three key evaluations which are whether the contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at the time the asset is made available to the Group; the Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use, considering its rights within the defined scope of the contract; and the Group has the right to direct the use of the identified asset throughout the period of use.
At the lease commencement date, the Group recognises a right-of-use asset and a corresponding lease liability on the Consolidated statement of financial position. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease liability measured at the present value of future lease payments, any initial direct costs incurred by the Group. If that rate cannot be determined, the lessee's incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of similar value in a similar economic environment with similar terms and conditions. The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Group assesses the right-of-use asset for impairment under IAS 36 'Impairment of Assets' where such indicators exist.
Lease liabilities are presented on two separate lines in the Consolidated statement of financial position for amounts due within one year and amounts due after more than one year. The lease liability is initially measured at the present value of lease payments that are not paid at the commencement date, discounted using the rate implicit in the lease. If this rate cannot readily be determined, the Group applies an incremental borrowing rate. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability and by reducing the liability by payments made. The Group re-measures the lease liability (and adjusts the related right-of-use asset) whenever the lease term has changed, or a lease contract is modified, and the modification is not accounted for as a separate lease.
Lease payments included in the measurement of the lease liability can be made up of fixed payments and an element of variable charges depending on the estimated future price increases, whether these are contractual or based on management's estimate of potential increases. Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest. It is re-measured to reflect any reassessment or modification, or if there are changes in fixed payments. When the lease liability is re-measured, the corresponding adjustment is reflected in the right-of-use asset, or profit and loss if the right-of-use asset is already reduced to zero. Where non-contractual payment discounts are subsequently received from suppliers, these are treated as a discharge of the lease liability with a credit recognised in the profit or loss statement.
The Group has elected to account for short-term leases and leases of low-value assets using the practical expedients available under IFRS 16. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are recognised as an expense in profit or loss on a straight line basis over the lease term.
Under IFRS 16, the Group recognises depreciation of the right-of-use asset and interest on lease liabilities in the Consolidated statement of comprehensive income over the period of the lease. On the Consolidated statement of financial position, right-of-use assets have been included in right of use assets and lease liabilities have been included in lease liabilities due within one year and after more than one year.
Intangible assets and amortisation
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the assets and liabilities assumed at the date of acquisition. Goodwill acquired in business combinations is not amortised. Instead, goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Intangible assets carried forward from prior years are re-valued at the exchange rate in the current financial year. Impairment testing is carried out by assessing the recoverable amount of the cash generating unit to which the goodwill relates. A bargain purchase is immediately released to the Consolidated statement of comprehensive income in the year of acquisition.
Customer relationships
Included within the value of intangible assets are customer relationships. These represent the purchase price of customer lists and contractual relationships purchased on the acquisition of the business and assets of Gallant VPS Inc. and Commercial Network Services as well as the purchase of Velocimetrics Ltd. These relationships are carried at cost less accumulated amortisation or impairment losses where applicable. Amortisation is calculated using the straight line method over periods of between five and ten years and is charged to cost of sales.
Development costs
Expenditure on research (or the research phase of an internal project) is recognised as an expense in the period in which it is incurred.
Development costs incurred are capitalised when all the following conditions are satisfied:
· Completion of the intangible asset is technically feasible so that it will be available for use or sale;
· The Group intends to complete the intangible asset and use or sell it;
· The Group has the ability to use or sell the intangible asset;
· The intangible asset will generate probable future economic benefits;
· There are adequate technical, financial, and other resources to complete the development and to use or sell the intangible asset, and
· The expenditure attributable to the intangible asset during its development can be measured reliably.
Development costs not meeting the criteria for capitalisation are expensed as incurred. The costs which do meet the criteria range from new product development to the enhancement of existing services. The scope of the development team's work continues to evolve as the Group continues to deliver business critical solutions to a growing customer base. Development costs capitalised are amortised on a straight-line basis over the estimated useful life of the asset. The estimated useful life is deemed to be five years for all developments capitalised. Amortisation is charged at the point of a major product release or upgrade in which that asset is made available for sale or release to the customer. Charges are recognised through cost of sales in the Consolidated statement of comprehensive income in the period in which they are incurred.
Impairment
Goodwill and assets with an indefinite useful life are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other non-financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable or where the asset is still in development and is not yet being amortised as it is not available for use. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to form a cash-generating unit.
A previously recognised impairment loss is reversed only if there is an indication that an impairment loss recognised in prior periods for an asset or cash-generating unit may no longer exist or may have decreased. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would be determined, net of depreciation, had no impairment loss been recognised for the asset or cost-generating unit in prior years. Such a reversal is recognised in profit or loss unless the asset is carried at a revalued amount, in which case the reversal is treated as a revaluation increase.
Equity
Ordinary shares are classified as equity. An equity instrument is any contract that evidences a residual interest in the assets of Beeks Financial Cloud Group plc after deducting all of its liabilities. Equity instruments issued by Beeks Financial Cloud Group plc are recorded at the proceeds received net of direct issue costs.
The share capital account represents the amount subscribed for shares at nominal value. Details on this can be found at note 21.
Amounts arising from the revaluation of non-monetary assets and liabilities held in foreign subsidiaries, and joint operations are held within the foreign currency reserve.
Earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Beeks Financial Cloud Group PLC, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
Value-added tax ('VAT') and other similar taxes
Revenues, expenses, and assets are recognised net of the amount of associated VAT, unless the VAT incurred is not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense.
Trade receivables and trade payables are stated inclusive of the amount of VAT receivable or payable. The net amount of VAT recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of financial position.
Cash flows are presented on a net basis. The VAT components of cash flows arising from investing or financing activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of VAT recoverable from, or payable to, the tax authority.
Alternative performance measures
In addition to measuring financial performance of the Group based on statutory profit measures, the Group also measures performance based on underlying EBITDA, underlying profit before tax and underlying diluted earnings per share.
The alternative performance measures provide management's view of the Group's financial performance and are not necessarily comparable with other entities. These alternative measures exclude significant costs (such as Share Based Payments) and as such, should not be regarded as a complete picture of the Group's financial performance. These measures should not be viewed in isolation, but as supplementary information to the rest of the financial statements.
Underlying EBITDA
Underlying EBITDA is defined as earnings before amortisation, depreciation, finance costs, taxation, acquisition costs, share based payments and exceptional non-recurring costs.
Underlying EBITDA is a common measure used by investors and analysts to evaluate the operating financial performance of companies, particularly in the sector that the Group operates.
The Group considers underlying EBITDA to be a useful measure of operating performance because it approximates the underlying operating cash flow by eliminating the charges mentioned above. It is not a direct measure of liquidity, which is shown in the Consolidated statement of cash flows, and needs to be considered in the context of the Group's financial commitments. Reference is also made to the right of use asset implication on depreciation in the year as a result of the Group taking additional space in data centres.
Underlying profit before tax
Underlying profit before tax is defined as profit before tax adjusted for the following:
· Amortisation charges on acquired intangible assets;
· Exchange variances on statement of final position gains and losses;
· Share-based payment charges;
· M&A activity including:
o Professional fees;
o Any non-recurring integration costs; Any gain or loss on the revaluation of contingent consideration where it is material; and
o Any material non-recurring costs where their removal is necessary for the proper understanding of the underlying profit for the period.
The Group considers underlying profit before tax to be a useful measure of performance because it eliminates the impact of certain non-recurring items including those associated with acquisitions and other charges commonly excluded from profit before tax by investors and analysts for valuation purposes.
Underlying diluted earnings per share
Underlying diluted earnings per share is calculated by taking the adjusted profit before tax as described after deducting an appropriate taxation charge and dividing by the total weighted average number of ordinary shares in issue during the year and adjusting for the dilutive potential ordinary shares relating to share options.
The Group considers adjusted diluted earnings per share to be a useful measure of performance for the same reasons as underlying profit before tax. In addition, it is used as the basis for consideration to the level of dividend payments.
Net cash/Net Debt
Net cash/net debt is a financial liquidity metric that measures the ability of a business to pay all its debts if they were to be called immediately. This is defined as current and non-current borrowing liabilities (debt and asset finance but excluding lease liabilities)- cash and cash equivalents.
Operational costs
Operational costs are defined as operating expenses less exceptional costs, share based payments and non-recurring costs. These costs are adjusted to reflect the true business operational trading costs.
Profit after Tax
Management believes that profitability measures after tax are not measures that would specifically require alternative performance measures as they do not constitute trading results. Tax legislation is out with the control of the Group. Whilst the group currently benefits from some tax relief such as R&D tax credits, the group does not rely on these in terms of trading results or provide consideration of the tax impact of adjusted items for alternative performance measures. Further information on tax impact on profitability can be found on Note 9.
Annualised Committed Monthly Recurring Revenue
Annualised Committed Monthly Recurring Revenue (ACMRR) is committed recurring revenue. Management believes that ACMRR is a key measure as it provides investors with the total contracted committed revenue of the Group.
2. Critical accounting judgements and key sources of estimation uncertainty
Key judgements
The key judgments in preparation of the financial statements are below:
Revenue
The group applies judgment for elements of revenue recognition. The key areas of assessment include whether the group acts as a principal vs an Agent for the sale of hardware, where third parties are utilised. The group also applied several areas of judgement within the revenue recognition of Proximity Cloud® contracts as outlined below.
Full details of the Group's revenue recognition policy can be found in note 1.
Principal v agent
Management is required to exercise its judgement in the classification of revenue recognition on either an agent or principal basis. Management have considered the primary indicators used to assess the agent/principal classification and has concluded that the Group acts as a principal in each sales transaction. This judgement has been reached on the basis that the Group holds the inventory risk, has control over the pricing over a particular service, takes the credit risk, and bears the responsibility to service the promise of the agreements. If management concluded that the group acted as agent, then this would result in revenue being recognised on a net basis where margin earned would be recognised as revenue with nil costs being recognised.
Proximity and Exchange Cloud®
The Proximity and Exchange Cloud® contracts include multiple deliverables. The group applies judgement to identify the performance obligations which ultimately feeds into the estimation of the transaction price to be allocated between them. The group has identified the performance obligations as:
a. the delivery and installation of the hardware and provision of the software licence (the appliance), recognised on a point in time basis; and
b. the stand ready services (support and maintenance) recognised over time
c. delivery of unspecified upgrades and future software releases recognised over time
The most significant judgement is that the delivery and installation of the hardware and provision of the software licence are considered to be one performance obligation, with the software considered the predominant item in the contract. This is considered to be the case as it is the functionality and use of the developed software that provides benefit to the customer, furthermore the purpose of the contract is for provision of the software licence with the hardware being required to facilitate this. As the contract is a right to use Beeks' software, revenue for both the software and hardware is recognised on a point in time basis upon delivery. As such, the Group consider this to be one performance obligation, recognised at a point in time basis, once the delivery and installation of the appliance to the customer is complete and the relevant licence key has been provided.
Management considers that the stand ready services do not affect the customers' ability to use and benefit from the software licence and the software can function on its own without this support. As such, the provision of stand ready services is considered to be a separate performance obligation, recognised over time as the services are rendered.
On the occasion that the title for hardware included within Proximity and Exchange Cloud® contracts is retained by the Group and as such, indicate the existence of a lease, management have applied judgment in order to determine the appropriate accounting treatment. Management have assessed that delivery and installation of the hardware, and provision of the software licence is one performance obligation under IFRS 15 as the two are considered to be non distinct. As a result the accounting treatment follows that of the predominant item within the performance obligation which has been assessed by management to be the software and as such is treated as revenue in accordance with IFRS 15 recognised at a point in time rather than a lease under IFRS 16.
Where judgement is required as to the present and enforceable rights and obligations of a Proximity and Exchange Cloud® contract, management have applied judgement as to whether cut off periods are substantive either in nature or in financial quantum. Judgements have been made on a contract by contract basis as to what length of contract should be considered when allocating the transaction price to relevant performance obligations, including considering whether penalties are substantive and what the expected consideration would be. These judgements have supported the enforceable term applied to the recognition of revenue on these types of contracts.
Please refer to Key estimations below for further information.
Software licences and Analytics contracts
Management has applied judgement in identifying the performance obligations in contracts that include software licences.
The Group's software licences give customers a right to use the Group's software as it exists when the licence is granted. Management has concluded that the delivery of the software licence key is a performance obligation recognised at a point in time, when the licence key is delivered and the customer is able to use and benefit from the software. Ongoing support and maintenance, including unspecified upgrades, is a separate performance obligation recognised evenly over the contract term as the service is provided.
Analytics contracts can also include hardware and connectivity services. Management has concluded that each of these elements is a separate performance obligation, as the customer can benefit from each of them independently, rather than a single integrated solution. This differs from Proximity Cloud® and Exchange Cloud® contracts, where the hardware is supplied specifically to run the Group's software and the two are combined as a single performance obligation.
This differs from Proximity Cloud® and Exchange Cloud® contracts, where the hardware is supplied specifically to run the Group's software and the two are combined as a single performance obligation.
Where a contract includes a discount, management allocates it to all performance obligations in proportion to their standalone selling prices, unless there is observable evidence that it relates to one or more, but not all, of them. For connectivity and colocation, standalone selling prices are based on observable third-party market rates where available.
®Development costs
The Group reviews half yearly whether the recognition criteria for development costs have been met. This is necessary as the economic success of any product development is uncertain and may be subject to future technical problems at the time of recognition. In addition, all internal activities related to the development of new products which are not finalised by the period end are continuously monitored by the Directors and assessed for any indications of impairment. Time tracking and categorisation and the resultant capitalisation of development costs for software developers is done via an internal time tracking system with management using judgement for some senior employees who contribute to development projects. Cut off for project capitalisation is made based on the lifecycle and releases within the product roadmap. Any non-development costs are recognised in the statement of comprehensive income. See note 11 for further information.
Inventories / Property, Plant and Equipment
The Group applies judgement to the classification and disclosure of inventories within the financial statements. Assets held at Head Office are classified and disclosed as inventory given these assets could be resold to a customer under a Proximity or Exchange Cloud® sale. At the financial year end, it would not be known whether the assets classified as inventories will be transferred to Property, Plant and Equipment and sold under Infrastructure As A Service, or sold customers as a Proximity or Exchange Cloud® solution.
Deferred tax
The Group applies judgement to the recognition of its deferred tax asset in relation to timing differences on share based payment charges and carried forward losses. Specifically in terms of losses carried forward, management apply judgement to determine if there is sufficient forecastable future taxable profits to utilise the deferred tax asset. Given current profit trajectory in line with future projections, management have concluded the recognition of the deferred tax asset is appropriate.
Key estimates
The key assumptions concerning the future, and other key sources of estimation uncertainty at the year end, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed below.
Software licences and maintenance
Management have used observable evidence from maintenance support time, pricing models and industry practice comparisons to estimate the percentage of split between licence and maintenance for the sale of software licences that have an attached maintenance performance obligation.
3. Segment Information
Operating segments are reporting in a manner consistent with the internal reporting provided to the chief operating decision makers.
The chief operating decision makers, who are responsible for allocating resources and assessing performance of operating segments, have been identified as the executive directors.
In the current year there is one customer that account for more than 10% of Group revenue. The total revenue for this customer amounts to £11.7m (2025: £10.9m).
Performance is assessed by a focus on the change in revenue across public/private cloud and new sales relating to Proximity Cloud®/Exchange Cloud® and analytics. Cost is reviewed at a cost category level but not split by segment. Assets are used across all segments and are therefore not split between segments so management review profitability at a group level.
Revenues by Operating segment, further disaggregated are as follows:
Year ended 30/06/26 (£'000)
Year ended 30/06/25 (£'000)
Public/ Private Cloud
Proximity/
Exchange Cloud®
Analytics
Total
Public/
Private
Cloud
Proximity/
Exchange Cloud®
Analytics
Total
Over time
Infrastructure/software as a service
25,436
-
-
25,436
23,765
-
-
23,765
Proximity Cloud®
-
1,609
-
1,609
-
709
-
709
Exchange Cloud®
-
469
-
469
-
157
-
157
Analytics
-
-
177
177
-
-
363
363
Professional services
156
-
-
156
199
-
-
199
Over time total
25,592
12,078
177
27,847
23,964
866
363
25,193
Point in time
Hardware/Software resale
428
-
-
428
871
-
-
871
Set up fees
214
-
-
214
104
-
-
104
Software other
87
-
-
87
111
-
-
111
Proximity Cloud®
-
5,908
-
5,908
-
7,818
-
7,818
Exchange Cloud®
-
1,297
-
1,297
-
1,628
-
1,628
Analytics
-
-
4,203
4,203
-
-
193
193
Point in time total
729
7,205
4,203
12,137
1,086
9,446
193
10,725
Total revenue
26,321
9,283
4,380
39,984
25,050
10,312
556
35,918
Revenues by operating segment, further disaggregated are as follows:
2026
2025
£'000
£'000
Revenues by geographic location are as follows:
United Kingdom
8,300
13,243
Europe
2,651
2,039
US
18,704
12,427
Rest of World
10,329
8,209
Total
39,984
35,918
During the year other income includes £0.3m (2025: £0.3m) recognised for grant income received from Scottish Enterprise, £0.1m (2025: £0.1m) recognised as rental income and £0.1m (2025: £0.3m) recognised in relation to the expected R&D tax credit.
2026
2025
£'000
£'000
Non-Current Assets by geographic location are as follows:
United Kingdom - Property, plant and equipment
11,578
9,984
Europe - Property, plant and equipment
1,002
1,638
Rest of World - Intangible assets
7,668
7,797
Rest of World - Goodwill
1,368
1,368
Rest of World - Property, plant and equipment
3,803
2,523
USA - Property, plant and equipment
5,154
5,647
Total Non-Current Assets
30,573
28,957
Intangible assets have been classified as "Rest of World" due to the fact they represent products that are available to customers throughout the World as well as the US intangible assets referred to in note 11.
The Group has taken advantage of the practical expedient permitted by IFRS 15 and has therefore not disclosed the amount of the transaction price allocated to unsatisfied performance obligations or when it expects to recognise that revenue. Longer term contracts continue to be paid on a monthly basis.
4. Operating Profit
Operating Profit is stated after charging:
2026
2025
£000
£000
Staff costs (note 7)
8,959
7,799
Depreciation on owned assets (note 12)
4,524
3,826
Depreciation right-of-use assets (note 12)
2,650
1,843
Amortisation of acquired intangibles (note 11)
121
296
Amortisation of other intangibles (note 11)
2,724
2,316
Other cost of sales and admin*
15,049
14,893
Foreign exchange (gains)/losses
(118)
212
Share based payments (note 22)
2,511
2,551
Other non-recurring costs
113
113
*Included within other cost of sales and admin are the remainder of direct costs associated with the business including data centre connectivity, software licences, security, and other direct support costs.
Auditor's remuneration
2026
2025
£000
£000
Audit
Fees payable for the audit of the consolidation and the parent company accounts
86
85
Fees payable for the audit of the subsidiary
75
75
161
160
5. Finance Costs
2026
2025
£000
£000
Bank charges
216
147
Interest on loan liabilities
40
6
Interest expense
399
229
Total finance costs
655
382
6. Finance Income
2026
2025
£000
£000
Finance income on customer contracts
714
277
Bank Interest received
31
131
Total finance income
745
408
7. Average number of employees and employee benefits expense
Including directors, the average number of employees (at their full time equivalent) during the year was as follows:
2026
2025
£000
£000
Management and administration
25
25
Support and development staff
97
77
Average numbers of employees
122
102
The employee benefits expense during the year was as follows:
2026
2025
£000
£000
Wages and salaries
7,557
6,644
Social security costs
947
745
Other pension costs
455
410
Total employee benefits expense
8,959
7,799
Share based payments (note 22)
2,511
2,551
Wages and salary costs directly attributable to the development of products are capitalised in intangible assets. The employee benefits expense above is stated gross, before deducting £2,005k (2025: £1,925k) of such costs capitalised during the year. The total additions capitalised in intangible assets relates to payroll costs and external third-party costs. Refer to Note 11 for capitalised development costs.
8. Directors' emoluments
2026
2025
£000
£000
Aggregate remuneration in respect of qualifying services
364
343
Aggregate amounts of contributions to pension schemes in respect of qualifying services
36
37
Other benefits in kind
4
4
Gain on exercise of options
-
-
Total Directors' emoluments
404
384
Highest paid director - aggregate remuneration (excluding share based payments)
153
137
There are two directors (2025: two) who are accruing retirement benefits in respect of qualifying services.
9. Taxation expense
2026
2025
£000
£000
Current
UK tax
(5)
62
Foreign tax on overseas companies
71
65
Total current tax
66
127
Origination and reversal of temporary differences
558
(304)
Total deferred tax
558
(304)
Tax on Profit on ordinary activities
624
(177)
The differences between the total tax credit above and the amount calculated by applying the standard rate of UK corporation tax to the profit before tax, together with the impact of the effective tax rate, are as follows:
2026
% ETR
2025
% ETR
£000
movement
£000
movement
Profit before tax
3,937
2,789
Profit on ordinary activities multiplied by the standard rate of corporation tax in the UK of 25% (2025: 25%)
984
25%
697
25%
Effects of:
Expenses not deductible for tax purposes
562
14.27%
570
20.43%
Share option deduction
(756)
(19.20%)
(1,071)
(38.42%)
Prior year deferred tax adjustments
(137)
(3.48%)
(340)
(12.19%)
Prior year over-provision
(69)
(1.75%)
-
-
Capital gains/losses
(28)
(0.71%)
(33)
(1.18%)
Other timing
68
1.72%
-
-
Total tax charge
624
15.85%
(177)
(6.36%)
The effective tax rate (ETR) for the year was 15.85% (2025: 6.36%).
10. Investments
2026
2025
£000
£000
Investments:
Investment in Liquid-Markets-Holdings Inc.
828
-
Included in investments is £828k (2025: nil) in respect of a US$1.1m Simple Agreement for Future Equity (SAFE) in Liquid-Markets-Holdings Inc., acquired on 6 August 2025. The SAFE converts into preferred shares on a future priced equity financing, at a 15% discount to the round price subject to a valuation cap, and returns the amount invested on a liquidity event or dissolution. It carries no interest, maturity date or voting rights.
The SAFE is held at fair value through profit or loss. Fair value is a Level 3 measurement, (see note 1, Financial instruments and fair value).
Management assessed fair value using a probability-weighted analysis of the outcomes available under the SAFE's terms: conversion on a priced equity financing, a liquidity event, dissolution, and no triggering event. In assessing the probabilities, management considered the investee's financial position, its approximately six-year trading history and funding record, its fundraising activity, and the progress of its technology and commercial pipeline. Fair value at 30 June 2026 was assessed at approximately US$1.12m against a cost of US$1.10m. The difference is immaterial and has not been recognised, so the investment is carried at US$1.1m (£828k). The key assumption is the likelihood of dissolution. A 10 percentage point increase in this likelihood, with a corresponding reduction in the likelihood of no triggering event, would reduce fair value to approximately US$1.04m (£780k), and a 20 percentage point increase would reduce it to approximately US$0.95m (£714k).
11. Intangible assets
Acquired customer relationships
Development costs
IP addresses
Trade name
Goodwill
Total
Cost
As at 30 June 2024
2,499
11,665
104
137
2,336
16,741
Additions
-
2,146
-
-
-
2,146
Foreign exchange movements
(117)
-
-
-
-
(117)
As at 1 July 2025
2,382
13,811
104
137
2,336
18,770
Additions
-
2,437
-
-
-
2,437
Foreign exchange movements
49
-
-
-
-
49
As at 30 June 2026
2,431
16,248
104
137
2,336
21,256
Accumulated Amortisation
As at 30 June 2024
(1,732)
(4,558)
-
(115)
(968)
(7,373)
Charge for the year
(276)
(2,314)
-
(22)
-
(2,612)
Foreign exchange movements
105
-
-
-
-
105
Grant income release
-
275
-
-
-
275
As at 1 July 2025
(1,903)
(6,597)
-
(137)
(968)
(9,605)
Charge for the year
(121)
(2,724)
-
-
-
(2,845)
Foreign exchange movements
(44)
-
-
-
-
(44)
Grant income release
-
274
-
-
-
274
As at 30 June 2026
(2,068)
(9,047)
-
(137)
(968)
(12,220)
NBV as at 30th June 2025
479
7,214
104
-
1,368
9,165
NBV as at 30th June 2026
363
7,201
104
-
1,368
9,036
Development costs have been recognised in accordance with IAS 38 in relation to the Open Nebula project and development of the Proximity and Exchange Cloud® products and analytics and its integration into this product. Development costs in relation to Proximity and Exchange Cloud® have a useful life of 5 years.
Brought forward development costs consist of £13.8m where £3.0m was capitalised in FY22, £2.9m was capitalised in FY23, £2.8m in FY24, £2.1m in FY25 and £2.4m in FY26.
During 2026, a total of £1.4m development costs relating to the development of Proximity Cloud®/Exchange Cloud® and £1m Analytics and Edge Intelligence project were capitalised. These assets now have a carrying value of £6.9m.
As at 30 June 2026, £0.05m (2025: £0.2m) of development costs capitalised are currently being carried as work in progress not yet amortised. This relates to cost where projects have not yet been completed and made available to customers. All costs incurred during the preliminary stages of development projects are charged to profit or loss.
Impairment test for goodwill
For this review, goodwill was allocated to individual cash generating units (CGU) on the basis of the Group's operations as disclosed in the segmental analysis. As the Board reviews results on a segmental level, the Group monitors goodwill and annually assesses it on the same basis for impairment. The Group is required to test, on an annual basis, whether goodwill has suffered any impairment or where indicators of impairment exist.
The carrying value of goodwill by each CGU is as follows:
2026
£'000
Private/public cloud
488
Proximity/Exchange Cloud®
880
Total goodwill
1,368
Goodwill has been allocated to the Proximity/Exchange Cloud® CGU and Private/Public cloud CGU. No goodwill has been allocated to the Analytics CGU. Management have reviewed and confirmed that there is no indication of impairment.
The recoverable amount of all CGUs has been determined by using value-in-use calculations, estimating future cash inflows and outflows from the use of the assets and applying an appropriate discount rates to those cash flows to ensure that the carrying value of each individual asset is still appropriate.
In performing these reviews, under the requirements of IAS 36 "Impairment of Assets" management prepare forecasts for future trading over a useful life period of up to five years.
These cash flow projections are based on financial budgets and market forecasts approved by management using a number of assumptions including;
· Historic and current trading
· Weighted sales pipeline
· Potential changes to cost base (including staff to support the CGU)
· External factors including competitive landscape and market growth potential
· Forecasts that go beyond the approved budgets are based on long term growth rates on a macro-economic level.
Management performed a full impairment assessment on the goodwill allocated to Public/Private Cloud. This included including modelling projected cash flows based on the current weighted sales pipeline, a discount rate based on the calculated post-tax weighted average cost of capital (15%, 2025: 15%) and cost base assumptions that included contingency and investment to deliver against the weighted sales pipeline. Conservative rates of 5% and terminal growth rates of 2% (2025: 2%) were estimated, which were significantly less than both the Group's internal business plan, external market mid-term forecast as well as historic performance.
Sensitivity analysis has been performed to show the impact of reasonable or possible changes in key assumptions. An increase in discount rate from 15% to 20% was applied with sales growth assumptions reduced. This resulted in no resultant indication of impairment.
Management has also assessed the Group's other intangible assets, principally capitalised development costs and acquired customer relationships, for indicators of impairment. This considered the continued profitability of the CGUs in which they are used, the Group's market capitalisation of £140m at 30 June 2026 compared with net assets of £48.7m, the strength of the sales pipeline, and whether any projects had been discontinued or become obsolete. No indicators of impairment were identified. Development costs not yet available for use were also tested and remain technically feasible and commercially viable.
12. Non-current assets - Property, plant and equipment
Computer Equipment
Office equipment and fixtures and fittings
Right of Use
Freehold property
Total
Cost
As at 30 June 2024
23,862
394
8,038
3,040
35,334
Additions
3,857
49
5,372
-
9,278
Transfer to stock
-
-
(125)
-
(125)
Disposals
(501)
-
-
-
(501)
Exchange adjustments
8
-
161
-
169
As at 1 July 2025
27,226
443
13,446
3,040
44,155
Additions
6,787
73
3,157
4
10,021
Transfer from stock
529
-
-
-
529
Transfer from right of use
1,391
-
-
-
1,391
Disposals
(1,174)
-
(1,931)
-
(3,105)
Exchange adjustments
3
-
122
-
125
As at 30 June 2026
34,762
516
14,794
3,044
53,116
Depreciation
As at 30 June 2024
(13,179)
(160)
(5,087)
(169)
(18,595)
Charge for the year
(3,681)
(73)
(1,843)
(72)
(5,669)
Depreciation on disposal
40
-
-
-
40
Exchange adjustments
(9)
-
(130)
-
(139)
As at 1 July 2025
(16,829)
(233)
(7,060)
(241)
(24,363)
Charge for the year
(4,369)
(83)
(2,650)
(72)
(7,174)
Depreciation on disposal
31
-
649
-
680
Exchange adjustments
(5)
-
(68)
-
(73)
Transfer from right of use
(649)
-
-
-
(649)
As at 30 June 2026
(21,821)
(316)
(9,129)
(313)
(31,579)
NBV as at 30 June 2025
10,397
210
6,386
2,799
19,792
NBV as at 30 June 2026
12,941
200
5,665
2,731
21,537
All revenue generating depreciation charges are included within cost of sales. Non-revenue generating depreciation charges are included with administrative expenses.
Disposals of £0.7m related to equipment used in the sale of Proximity/Exchange Cloud® products.
The Group recognises rental income for the rental of units at their Head Office property in Renfrew. This asset is disclosed as Freehold Property. Units are leased to tenants under operating leases with rentals payable quarterly. Full details on operating leases as a lessor can be found on note 20.
Assets held at Head Office are classified and disclosed as inventory until the point in which the assets purpose is identified. Where an asset is sold to a customer under a Proximity or Exchange Cloud® solution, it is transferred to stock and subsequently transferred to Cost of Sales within the Income statement.
13. Non-current assets - Deferred tax
Deferred tax is recognised at the standard UK corporation tax of 25% for fixed assets in the UK (2025: 25%). Deferred tax in the USA is recognised at an average rate of 21% for 2026 (2025: 21%). The deferred tax asset relates to the difference between the amortisation period of the US acquisitions for tax and reporting purposes as well as the impact of the share options exercised during the year and tax losses carried forward in both UK and overseas companies.
2026
2025
£000
£000
The split of the deferred tax asset and liabilities are summarised as follows:
Deferred tax (liabilities)
(4,412)
(3,963)
Deferred tax asset
6,506
7,031
Net deferred tax asset
2,094
3,068
Movements
Opening balance
3,068
2,530
Charge to profit or loss (note 9)
(558)
304
Charged to equity
(416)
235
Closing balance
2,094
3,068
The movement in deferred tax assets and liabilities during the year is as follows:
Share options
Tax losses c/fwd
Accelerated tax depreciation and other movement
Total deferred tax asset carried forward
Total deferred tax (liability) carried forward
(temporary differences on assets)
£000
£000
£000
£000
£000
As at 30 June 2024
1,697
5,014
16
6,727
(4,196)
Charge to income
611
(540)
(1)
70
234
Charge to equity
235
-
-
235
-
As at 30 June 2025
2,543
4,474
15
7,032
(3,962)
Charge to income
187
(279)
(17)
(109)
(449)
Charge to equity
(416)
-
-
(416)
-
As at 30 June 2026
2,314
4,195
(2)
6,507
(4,411)
14. Current assets - Inventories
2026
2025
£000
£000
Materials
3,169
2,457
Consumables
545
150
3,714
2,607
The Group holds hardware which can be used in the sale of Proximity or Exchange Cloud® contracts. Subsequent to the year end, if they are not used as part of a Proximity or Exchange Cloud® sale, they will be reclassified as PPE at the point in which they are delivered into one of the Group's data centres.
15. ®Trade and other receivables
2026
2025
£000
£000
Trade receivables
1,101
1,616
Less: allowance for impairment of receivables
(52)
(42)
1,049
1,574
Prepayments
2,571
1,301
Contract assets
4,522
3,611
Corporation tax
628
-
Other taxation
160
582
Other receivables
706
643
Trade and other receivables - current
9,636
7,711
2026
2025
£000
£000
Contract assets
13,197
8,000
Trade and other receivables - non-current
13,197
8,000
Contract assets primarily relate to our rights to consideration for goods or services delivered but not invoiced at the reporting date. The associated performance will either be the delivery of the bundled appliance for Proximity/Exchange Cloud® contracts or the delivery of the licence key for analytics contracts. The contract assets are transferred to receivables when invoiced. Contract liabilities relate to deferred revenue. At the end of each reporting period, these positions are netted on a contract basis and presented as either an asset or a liability in the Consolidated Statement of Financial Position. Consequently, a contract balance can change between periods from a net contract asset balance to a net contract liability balance in the statement of financial position.
Contract assets are subject to IFRS 9 impairment, and the Group recognises lifetime expected credit losses. As these balances are due predominantly from Tier 1 financial institutions and regulated exchanges with strong credit profiles, the expected credit loss is considered immaterial and no general provision has been recognised. Specific impairments are recognised where a balance may not be recoverable, as set out in the table further below.
Significant changes in the contract assets and the contract liability balances during the period are as follows:
Contract assets
Contract liabilities
£000
£000
Balance at 30 June 2025
11,611
677
Transferred to receivables from contract assets from the beginning of the period
(7,435)
-
Revenues recognised during the period to be invoiced
14,001
-
Impairment of contract assets
(458)
-
Revenue recognition that was included in the contract liability balance at the beginning of the period
-
(666)
Remaining performance obligations for which considerations have been received
-
585
Balance at 30 June 2026
17,719
596
During the year the Group recognised a £0.5m (2025: £0.1m) impairment of a contract asset following a dispute over the remaining contract period with a Proximity Cloud® customer. Further details are set out in note 15. ®.
The Group continues to monitor the recoverability of contract assets closely, applying a lifetime expected credit loss model under IFRS 9. Other than the specific impairment noted above, the credit quality of contract assets remains strong, with no material concentration of credit risk.
The credit risk relating to trade receivables is analysed as follows:
2026
2025
£000
£000
Trade receivables
1,101
1,616
Less: allowance for impairment of receivables
(52)
(42)
1,049
1,574
Movements in the allowance for expected credit losses are as follows:
2026
2025
£000
£000
Opening balance
42
124
Movement in allowances
22
(56)
Receivables written off during the year as uncollectable
(12)
(26)
Closing balance
52
42
The Directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value. The group has applied the simplified approach to providing for expected credit losses prescribed by IFRS 9, which permits the use of lifetime expected loss allowance for all trade receivables. The expected credit loss allowance under IFRS 9 as at 30 June 2026 is £44k (2025 - £40k).
The following table details the risk profile of trade receivables based on the Group's provision matrix. As the Group's historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished between the Group's different customer segments.
2026
ECL rate
2026 ECL allowance
2025
ECL rate
2025 ECL allowance
Risk profiling category (ageing)
£'000
%
£'000
£'000
%
£'000
Current
497
-0.50%
-2
486
-0.25%
-1
0-30 days
511
-7.00%
-36
1,076
-3.00%
-35
30-60 days
36
-8.00%
-3
45
-4.00%
-2
60-90 days
17
-12.00%
-2
-
-6.00%
-
Over 90 days
2
-36.00%
-1
-
-18.00%
-2
Total
1,063
-44
1,607
-40
The ECL rate in the current year has been increased in line with the risk profile of trade receivables, historic trade losses and continued tight credit control procedures.
Trade receivables consist of a large number of customers across various geographical areas. The ageing below shows that all are less than three months old and historic performance indicates a high probability of payment for debts in this aging.
For contract asset ECL rates, Beeks have concluded that there is minimal credit risk, as it is significantly unlikely that the customers associated with these contract assets default on their contracts. To be prudent, the Group have considered a 0.001% provision which equates to approximately £2,000 and therefore wholly trivial. As such, no additional provision has been incorporated against the value currently sitting within contract assets relating to Proximity or Exchange Cloud® and analytic sales.
Past due but not impaired
The Group did not consider a credit risk on the aggregate balances after reviewing the credit terms of the customers based on recent collection practices.
The aging of trade receivables at the reporting date is as follows:
2026
2025
£000
£000
Not yet due
525
485
Due 1 to 3 months
576
1,122
Due 3 to 6 months
-
-
More than 6 months due
-
9
1,101
1,616
16. Current assets - Cash and cash equivalents
2026
2025
£000
£000
Cash and cash equivalents
5,374
7,357
5,374
7,357
The credit risk on cash and cash equivalents is considered to be negligible because over 99% of the balance is with counter parties that are UK and US banking institutions.
17. Current assets - Financial instruments and risk management
Financial risk management objectives and policies
The Group's principal financial instruments comprise cash and cash equivalents, short term deposits and bank and other borrowings.
The carrying amount of all financial assets presented in the statement of financial position are measured at amortised cost.
The carrying amount of all financial liabilities presented in the statement of financial position are measured at amortised cost.
There have been no changes to valuation techniques, or any amounts recognised through 'Other Comprehensive Income'.
The main purpose of these financial instruments is to finance the Group's operations. The Group has other financial instruments which mainly comprise trade receivables and trade payables which arise directly from its operations.
Risk management is carried out by the finance department under policies approved by the Board of Directors. The Group finance department identifies, evaluates, and manages financial risks. The Board provides guidance on overall risk management including foreign exchange risk, interest rate risk, credit risk, and investment of excess liquidity.
The impact of the risks required to be discussed under IFRS 7 are detailed below:
Market risk
Foreign exchange risk
Foreign exchange risk arises when future commercial transactions or recognised assets or liabilities are denominated in a currency that is not the functional currency of the operations. The Group had potential exchange rate exposure within USD trade payable balances of £1,071,076at 30 June 2026 (£1,846,837 at 30 June 2025) and potential exchange rate exposure within EUR trade payables balances of £65,327 (£80,815 at 30 June 2025). The Group had potential exchange rate exposure within USD trade receivables of £301,191 (£1,214,571 as at 30 June 2025) and potential exchange rate exposure within EUR trade receivables of £662 (£nil at 30 June 2025). The Group had potential exchange rate exposure within USD intercompany balances of £1,386,164 (£5,046,009 as at 30 June 2025) and within JPY intercompany balances of £77,123 (£150,441 as at 30 June 2025). The Group also has potential exchange rate exposure within USD bank balances of £4,220,134 (£6,154,821 as at 30 June 2025) and £ 70,227 within EUR bank balances (£137,405 as at 30 June 2025).
Cash flow and interest rate risk
The Group has relatively limited exposure to interest rate risk in respect of cash balances and long-term borrowings held with banks and other highly rated counterparties. Loans are at variable rates of interest based on the Bank of England's base rate therefore the Group is subject to changes in interest rates. Given the relatively low level of debt the Board do not consider this to be a significant risk. At 30 June 2026 the Group had total borrowings of £4.7m (2025: £0.4m), comprising £3.2m of asset finance agreements at fixed rates and a £1.5m bank loan at a variable rate. Credit risk
The Group's maximum exposure to credit risk is limited to the carrying amount of financial assets recognised at the reporting date, as summarised below:
2026
2025
£000
£000
Cash and cash equivalents
5,374
7,357
Trade receivables
1,101
1,616
Contract assets
4,522
3,611
Other receivables
706
643
11,703
13,227
Credit risk is managed on a Group basis. Credit risks arise from cash and cash equivalents and deposits with banks and financial institutions, as well as credit exposures to customers, including outstanding receivables and committed transactions. Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial losses to the Group. The Group provides standard credit terms (normally 30 days) to all of its customers which has resulted in trade receivables of £1,101K (2025: £1,616K) which are stated net of applicable allowances, and which represent the total amount exposed to credit risk.
The Group's credit risk is primarily attributable to its trade receivables and contract assets. The Group present the amounts in the statement of financial position net of allowances for doubtful receivables, estimated by the Group's management based on prior experience and the current economic environment. The Group reviews the reliability of its customers on a regular basis, such a review takes into account the nature of the Group's trading history with the customer, along with management's view of expected future events and market conditions.
The credit risk on liquid funds is limited because the majority of funds are held with two banks with high credit-ratings assigned by international credit-rating agencies. Management does not expect any losses from non-performance of these counterparties.
None of the Group's financial assets are secured by collateral or other credit enhancements.
Liquidity risk
The Group closely monitors its access to bank and other credit facilities in comparison to its outstanding commitments on a regular basis to ensure that it has sufficient funds to meet obligations of the Group as they fall due. The Group monitors its current debt facilities and complies both with its gross borrowings to adjusted EBITDA, minimum adjusted cash banking and LTV covenants. Judgement is required in assessing what items are allowable for the adjusted components.
The Board receives regular debt management forecasts which estimate the cash inflows and outflows over the next twelve months, so that management can ensure that sufficient financing is in place as it is required.
As at 30 June 2026, the Group's financial liabilities (excluding leases disclosed in Note 18) have contractual maturities (including interest payments where applicable) as summarised below:
Current Non-current
Within
1-3
3-12
1-5
After
1 month
months
months
years
5 years
£'000
£'000
£'000
£'000
£'000
Trade payables and other payables
5,068
1,016
724
-
-
The above amounts reflect the contractual undiscounted cash flows, which may differ from the carrying values of the liabilities at the reporting date.
Trade and other payables includes trade payables, accruals, contract liabilities, other taxation and social security and other payables.
Capital risk management
The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debts.
2026
2025
£000
£000
Total equity
48,650
43,217
Cash and cash equivalents
5,374
7,357
Capital
54,024
50,574
Total equity
48650
43,217
Lease liabilities
8,189
5,892
Overall financing
56,839
49,109
Capital-to-overall financing ratio
0.95
1.03
Other risks
Rental income from the head office property leased out under operating leases is recognised in the statement of the comprehensive income as other income as these services are rendered, as the tenant occupies the space. Any associated risk of the underlying asset used to generate this rental income is believed to be minimal given the building is utilised as the head office and the majority of staff are based there.
18. Non-current liabilities - Borrowings and other financial liabilities
2026
2025
£000
£000
Lease liabilities
4,328
3,475
Bank loans
1,500
-
5,828
3,475
The loan, together with all other amounts owed to Barclays Bank PLC, is secured by:
· a cross guarantee between Beeks Financial Cloud Limited, Beeks Financial Cloud Group plc and Velocimetrics Limited;
· a standard security over the Group's property at Riverside Building, King's Inch Way, Braehead, Renfrew;
· floating charges over the assets of Beeks Financial Cloud Limited and Beeks Financial Cloud Group plc; and
· a debenture granted by Velocimetrics Limited.
Changes in liabilities arising from financing activities:
Lease liabilities
Total
£000
£000
Balance at 30 June 2025
5,891
5,891
Lease liabilities additions IFRS 16
5,706
5,706
Lease repayments
(3,408)
(3,408)
Balance at 30 June 2026
8,189
8,189
Included within the lease liabilities balance of £8.2m is £3.2m of asset finance lease liabilities.
19. Trade and other payables
2026
2025
£000
£000
Trade payables
5,160
6,809
Accruals
796
778
Contract liabilities
595
625
Other taxation and social security
187
266
Other payables
70
102
Trade and other payables - current
6,808
8,580
2026
2025
£000
£000
Contract liabilities
270
11
Trade and other payables - non-current
270
11
Non-current contract liabilities in the prior year relates to deferred income from support contracts that span over one year.
20. Leases
The Group leases assets including the space in data centres in order to provide infrastructure services to its customers and also hardware for data centres. Information about leases for which the Group is a lessee is presented below:
Right-of-use assets
Leasehold Property and improvement
£000
Balance at 1 July 2025
6,386
Additions
3,157
Disposals
(1,931)
Depreciation
(2,650)
Depreciation on disposals
649
Foreign exchange
54
Balance at 30 June 2026
5,665
The right-of-use assets are disclosed as non-current assets and are disclosed as property, plant and equipment (note 12).
Right-of-use lease liabilities
2026
2025
£000
£000
Maturity analysis:
Within one year
(4,174)
(2,703)
Within two years
(3,363)
(2,093)
Within three years
(1,187)
(1,565)
Add: unearned interest
535
469
Total lease liabilities
(8,189)
(5,892)
Analysed as:
Non-current (Note 18)
(4,328)
(3,475)
Current (Note 19)
(3,861)
(2,417)
(8,189)
(5,892)
The Group does not face a significant liquidity risk with regard to its lease liabilities. The interest expense on lease liabilities amounted to £0.3m for the year ended 30 June 2026 (2025: £0.2m). Lease liabilities are calculated at the present value of the lease payments that are not paid at the commencement date.
The Group has elected not to recognise a lease liability for short-term leases (leases with an expected term of 12 months or less) or for leases of low value assets. Payments made under such leases are expensed on a straight line basis. During the year ended 30 June 2026, in relation to leases under right of use, the Group recognised the following amounts in the Consolidated statement of comprehensive income:
2026
2025
£000
£000
Depreciation charge
2,650
1,843
Interest expense
399
229
Payments for short-term lease expenses in relation to data centre space have not been disclosed below and are instead reflected within other cost of sales under note 4.
Amounts recognised in the Consolidated statement of cash flows:
2026
2025
£000
£000
Amounts payable under leases:
Repayment of lease liabilities within cash flows from financing activities
3,409
2,467
The Group recognises rental income for the rental of units at their Head Office property in Renfrew. Units are leased to tenants under operating leases with rentals payable quarterly. Lease income from operating leases where the group is a lessor is recognised on a straight-line basis over the lease term. The total recognised in profit or loss during the period is as follows:
2026
2025
£000
£000
Rental income from operating leases
55
96
As part of this, The Group receives rental payments on a quarterly basis. The amounts due to be received over the next 5 years are as follows:
2026
2025
£000
£000
Within 1 year
41
72
Between 1 and 2 years
41
72
Between 2 and 3 years
41
72
21. Equity - issued capital
2026
2025
2026
2025
shares
shares
£000
£000
Ordinary shares - fully paid
68,336,436
67,317,194
85
84
Movements in ordinary share capital
Details
Date
Shares
Shares
Issue price
£000
Balance
30 June 2018
50,043,100
50,043,100
62
EMI Share options exercised
31 August 2018
677,700
677,700
£0.00125
1
EMI Share options exercised
24 October 2018
32,200
32,200
£0.00125
-
EMI Share options exercised
20 June 2019
111,800
111,800
£0.00125
1
New share issue
14 April 2020
363,458
363,458
£0.00125
-
EMI Share options exercised
9 November 2020
44,118
44,118
£0.00125
-
New share issue
15 December 2020
430,946
430,946
£0.00125
1
New share issue
26 April 2021
4,347,827
4,347,827
£0.00125
5
EMI Share options exercised
15 November 2021
264,705
264,705
£0.00125
-
New share issue
25 April 2022
9,090,910
9,090,910
£0.00125
12
EMI Share options exercised
16 January 2023
21,946
21,946
£0.00125
-
EMI Share options exercised
5 April 2023
106,796
106,796
£0.00125
-
EMI Share options exercised
31 May 2023
35,928
35,928
£0.00125
-
Share options exercised
14 August 2024
122,565
122,565
£0.00125
-
Share options exercised
2 September 2024
22,500
22,500
£0.00125
-
Share options exercised
24 October 2024
83,373
83,373
£0.00125
-
Share options exercised
22 November 2024
78,000
78,000
£0.00125
-
Share options exercised
17 December 2024
233,291
233,291
£0.00125
1
Share options exercised
10 February 2025
130,701
130,701
£0.00125
-
Share options exercised
31 March 2025
99,255
99,255
£0.00125
-
Share options exercised
17 April 2025
33,500
33,500
£0.00125
-
30 June 2025
67,317,194
67,317,194
84
Share options exercised
20 October 2025
341,171
341,171
£0.00125
-
Share options exercised
22 December 2025
324,525
324,525
£0.00125
-
Share options exercised
9 February 2026
353,546
353,546
£0.00125
1
Balance
30 June 2026
68,336,436
68,336,436
85
Ordinary shares
During the year, 1,019,242 share options were exercised.
22. Share based payments
The movements in the share options during the year, were as follows:
2026
2025
Number of share options
Weighted Average Fair Value price per share (£)
Number of share options
Weighted Average Fair Value price per share (£)
Outstanding at the beginning of the year
7,302,462
1.51
6,733,468
1.26
Exercised during the year
(1,019,242)
1.38
(803,186)
1.41
Issued during the year
1,391,670
1.71
1,454,234
2.62
Re-distributed during the year
90,000
2.45
-
-
Forfeited during the year
(166,443)
2.13
(82,054)
1.06
Outstanding at the end of the year
7,635,947
1.56
7,302,462
1.51*
* The weighted average fair value of options outstanding at 30 June 2025 has been corrected from £1.26, as previously reported, to £1.51. This is a disclosure correction only and has no effect on the share-based payment charge.
The Group granted a total of 1,391,670 share options on 27th April 2026. In addition to this, during the year 1,400,000 unapproved options granted in January 2025 were cancelled and replaced with EMI options on identical terms. The replacement has been accounted for as a modification of the original award; as there was no incremental fair value, the share-based payment charge is unaffected.
On 23rd October 2025, 90,000 share options previously forfeited were redistributed to other employees.
Shares were forfeited during the year where employees left the business, with their share options not being fully redistributed within the Group.
These share options outstanding at the end of the year have the following expiry dates and exercise prices:
Grant 4A
Grant 4B
Grant 5A
Grant 5B
Grant 5C
Grant 6A
Grant 6B
Grant 6C
Shares
1,022,500
597,150
604,000
462,500
462,500
395,000
524,000
524,000
Date of grant
26th November 2021
26th November 2021
2nd December 2022
2nd December 2022
2nd December 2022
20th November 2023
20th November 2023
20th November 2023
Exercise price
£0.00125
£0.00125
£0.00125
£0.00125
£0.00125
£0.00125
£0.00125
£0.00125
Unvested expiry date
26th November 2024
26th November 2024
2nd December 2025
2nd December 2025
2nd December 2024
20th November 2025
20th November 2025
20th November 2025
Grant 7A
Grant 7B
Grant 7C
Grant 8A
Grant 8B
Grant 8C
Shares
370,000
500,867
500,867
440,000
475,835
475,835
Date of grant
15th January 2025
15th January 2025
15th January 2025
27th
April
2026
27th
April
2026
27th
April
2026
Exercise price
£0.00125
£0.00125
£0.00125
£0.00125
£0.00125
£0.00125
Unvested expiry date
15th January 2028
15th January 2027
15th January 2028
27th October 2028
27th October 2027
27th October 2028
These share options vest under challenging performance conditions based on underlying profitability growth during the periods.
The Black Scholes model was used to calculate the fair value of these options, the resulting fair value is expensed over the vesting period. The following table lists the range of assumptions used in the model:
Grant 1
Grant 2
Grant 3
Grant 4A
Grant 4B
Grant 4C
Grant 5A
Shares
264,706
1,574,850
1,042,063
1,022,500
597,150
632,150
604,000
Share price (£)
1.02
0.84
0.945
1.575
1.575
1.575
1.43
Volatility
5%
5%
5%
5%
5%
5%
5%
Annual risk free rate
4%
4%
4%
4%
4%
4%
4%
Exercise strike price (£)
0.00125
0.00125
0.00125
0.00125
0.00125
0.00125
0.00125
Time to maturity (yrs)
3
3
3
3
3
2
3
Grant 5B
Grant 5C
Grant 6A
Grant 6B
Grant 6C
Grant 7A
Grant 7B
Grant 7C
Shares
462,500
462,500
395,000
632,150
604,000
370,000
500,867
500,867
Share price (£)
1.43
1.43
1.065
1.065
1.065
2.62
2.62
2.62
Volatility
5%
5%
5%
5%
5%
5%
5%
5%
Annual risk free rate
4%
4%
4%
4%
4%
4%
4%
4%
Exercise strike price (£)
0.00125
0.00125
0.00125
0.00125
0.00125
0.00125
0.00125
0.00125
Time to maturity (yrs)
3
2
3
3
2
3
2
3
Grant 8A
Grant 8B
Grant 8C
Shares
440,000
475,835
475,835
Share price (£)
1.71
1.71
1.71
Volatility
5%
5%
5%
Annual risk free rate
4%
4%
4%
Exercise strike price (£)
0.00125
0.00125
0.00125
Time to maturity (yrs)
2.5
1.5
2.5
The total expense recognised from share based payments transactions on the Group's profit for the year was £2.5m (2025: £2.5m).
Expected volatility was determined at the date of grant from historic volatility, adjusted for events that were not considered to be reflective of the volatility of the share price going forward.
These share options vest on the achievement of challenging growth targets. It is management's intention that the Group will meet these challenging growth targets therefore, based on management's expectations, the share options are included in the calculation of underlying diluted EPS in note 25.
23. Equity - Reserves
The foreign currency retranslation reserve represents exchange gains and losses on retranslation of foreign operations. Included in this is revaluation of opening balances from prior years.
The merger reserve initially arose on the share for share exchange reflecting the difference between the nominal value of the share capital in Beeks Financial Cloud Group PLC and the value of the Group being acquired, Beeks Financial Cloud Limited. The merger reserve then increased upon acquisition of Velocimetrics Ltd in FY 2018, reflecting the difference between the nominal value of the share capital issued from Beeks Financial Cloud Group PLC and the value of the shares issued to the owners of Velocimetrics Ltd.
Share premium represents the excess over nominal value of the fair value of consideration received for equity shares, net of expenses of the share issue. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits.
Retained earnings represents retained profits and losses.
The other re
serve arose on the share for share exchange and reflects the difference between the value of Beeks Financial Cloud Group Limited and the share capital of the Group being acquired through the share for share exchange. Also included in the other reserve is the fair value of the warrants issued on the acquisition of VDIWare LLC.
24. Related party transactions
Parent entity
Beeks Financial Cloud Group PLC is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 26.
Transactions with related parties
The following transactions occurred with related parties:
2026
2025
£000
£000
Withdrawals from the director, Gordon McArthur
328
58
At the end of the financial year, the directors loan account totalled £264K (2025 - £35K). In line with the Companies Act 2006 this amount due by the director will be repaid subsequent to the financial year end.
During the financial year, Beeks Financial Cloud Limited received services in the normal course of its business and at arm's length from A&B Property and Rental Services Scotland Limited, a company owned by Gordon McArthur. During the year, Beeks Financial Cloud Limited paid for services of £nil (2025: £1,550) to A&B Property and Rental Services Scotland Limited and the amounts due at the year-end was £nil (2025: £nil).
Key management personnel
Compensation paid to key management (which comprises the executive and non-executive PLC Board members) during the year was as follows:
2026
2025
£000
£000
Wages and salaries
364
343
Social security costs
42
37
Other pension costs
36
37
Other benefits in kind
4
4
Share based payments
83
126
Earnings per share
2026
2025
£000
£000
Profit after income tax attributable to the owners of Beeks Financial Cloud Group PLC
3,313
2,966
Pence
Pence
Basic earnings per share
4.88
4.43
Diluted earnings per share
4.51
4.12
Number
Number
Weighted average number of ordinary shares used in calculating basic earnings per share
67,861,975
66,952,413
Adjustments for calculation of diluted earnings per share:
Dilutive impact of share options
5,141,202
4,703,077
Options over ordinary shares
477,253
366,982
Weighted average number of ordinary shares used in calculating diluted earnings per share
73,480,430
72,022,472
2026
2025
£000
£000
Profit before tax for the year
3,937
2,789
Share Based payments
2,510
2,551
Amortisation on acquired intangibles
121
130
Exceptional non-recurring costs
113
113
Grant income
(274)
(276)
Exchange rate (loss)/gain on intercompany translation
(32)
500
R&D tax credit
(67)
(322)
Underlying profit for the year before tax
6,308
5,485
Tax on statutory profit
(624)
177
Tax adjustment on underlying profit
18
8
Underlying profit for the year after tax
5,702
5,670
Weighted average number of shares in issue - basic
67,861,975
66,952,413
Weighted average number of shares in issue - diluted
74,870,280
74,621,412
Underlying earnings per share - basic
8.40
8.47
Underlying earnings per share - diluted
7.62
7.60
Included in the weighted average number of shares for the calculation of underlying diluted EPS are share options outstanding but not exercisable. It is management's intention that the Group will meet the challenging growth targets therefore, based on management expectations, the share options are included in the calculation of underlying diluted EPS.
25. Subsidiaries
The Consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries held by the company in accordance with the accounting policy described in note 1.
The subsidiary undertakings are all 100% owned, with 100% voting rights.
Company name
Country of incorporation
Principal place of business/registered office
Activity
Beeks Financial Cloud Co Ltd
Japan
FARO 1F, 2-15-5, Minamiaoyama, Minato-Ku, Tokyo, Japan.
Non-trading
Beeks FX VPS USA Inc.
Delaware, USA
874 Walker Road, Suite C, Dover, Kent, Delaware, 19904, USA.
Non-trading
Year end 31st December
Beeks Financial Cloud Limited
Scotland
Riverside Building, 2 Kings Inch Way, Renfrew, Renfrewshire, PA4 8YU
Cloud Computing Services
Velocimetrics Limited
England
20 St Thomas Street, London Bridge, London, England, SE1 9RS
Non-trading
Velocimetrics Inc.
New York, USA
230 Park Avenue, 10th Floor, New York 10169, USA.
Non-trading
Beeks Financial Cloud Co Ltd (Japan) ceased trading during the year and the Directors are in the process of winding up the company. The company is expected to be dissolved in FY27.
Velocimetrics Limited (company number 06943398) and Beeks Financial Cloud Limited (company number SC379602) are exempt from the requirements of the Companies Act 2006 relating to the audit of individual accounts for the year ended 30 June 2026 by virtue of section 479A of the Act. In accordance with section 479C of the Act, Beeks Financial Cloud Group plc has guaranteed all outstanding liabilities to which these subsidiaries are subject at 30 June 2026, until they are satisfied in full.
26. Ultimate controlling party
The Directors have assessed that there is no ultimate controlling party
27. Events after the reporting period
On 6 October 2026 the Group agreed a £5.0m revolving credit facility with Barclays Bank PLC, available until October 2028. The facility was undrawn at the date of approval of these financial statements.
On 12 October 2026 the Group entered into a Simple Agreement for Future Equity (SAFE) with Algoriphi, Inc. (trading as OmniPhi), as part of a strategic partnership to deliver OmniPhi's AI trading platform on the Group's infrastructure. The Group will invest up to US$1.0m (c.£0.75m) in tranches, with the majority payable on OmniPhi achieving specified milestones. The SAFE converts into equity on OmniPhi's next priced funding round and will be measured at fair value through profit or loss. It has no effect on the financial statements for the year ended 30 June 2026.
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