REG - Beeks Fin Cloud Grp - Interim Results
27/02/2023 07:00
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RNS Number : 0642R Beeks Financial Cloud Group PLC 27 February 2023
Beeks Financial Cloud Group plc
("Beeks" or the "Company")
Interim Results
27 February 2023 - Beeks Financial Cloud Group Plc (AIM: BKS)
(https://beeksgroup.com/) , a cloud computing and connectivity provider for
financial markets, is pleased to announce its unaudited results for the six
months ended 31 December 2022.
Financial Highlights
· Revenues increased by 35% to £10.40m (H1 2022: £7.72m)
· Annualised Committed Monthly Recurring Revenue (ACMRR) up 35% to
£21.30m (H1 2022: £15.80m)
· Gross profit up by 47% to £4.35m (H1 2022: £2.97m)
· Underlying EBITDA* increased by 48% to £3.59m (H1 2022: £2.43m)
· Underlying profit before tax** up 44% to £0.65m (H1 2022:
£0.45m)
· Underlying basic EPS*** 1.35 pence (H1 2022: 0.90 pence)
· Cash flow from operations (before movement in working capital) up
46% to £3.68m (H1 2022: £2.52m)
· Net cash of £3.35m (H1 2022: net debt £3.73m)
* Underlying EBITDA is defined as profit for the period 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
** 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
***Underlying basic EPS is defined as underlying profit after underlying tax
divided by the weighted average number of ordinary shares.
**** Net cash/net debt is defined as cash less total bank loans and asset
financing liabilities
Operational Highlights and Outlook
· Undergoing final contractual negotiations with two further
material Exchange Cloud clients, following 12 and 18 month sales cycles and
proof of concepts
· A record pipeline of further Exchange Cloud opportunities,
currently in talks with a number of major Exchanges across the globe to
provide market data distribution or end-user cloud compute using Beeks
Proximity or Exchange Cloud solutions
· Significant investment into the development of our offering, in
order to capitalise on our successes and exploit the considerable market
opportunity
· Building pipeline across our Proximity and Private Cloud
offerings, with continued 'land and expand' success in the period with Tier 1
customers
· Increased headcount to 106 by the end of the period, to support
both the product roadmap and pipeline execution
· The size of the sales pipeline and expanded product offering
provides the Board with confidence in both achieving results for the year in
line with market expectations and in the longer term growth prospects for
Beeks
Statutory Equivalents
The above highlights are based on underlying results. Reconciliations between
underlying and statutory results are contained within the financial
information. The statutory equivalents of the above results are as follows:
· Loss before tax of £0.76m (H1 2022: loss of £0.27m)
· Basic earnings per share of a loss of 0.73p (H1 2022: loss of
0.42p)
The largest reconciling item is the consistent add back of the non-cash share
based payment charge.
Gordon McArthur, CEO of Beeks Financial Cloud commented:
"With our proven track record and well-established reputation as a provider of
technology to the financial markets, we retain strong confidence in continued
success for Beeks. Our principal focus for the second half will be to convert
our substantial pipeline of opportunities across the newly launched Exchange
Cloud offering.
"While the macro environment presents challenges to all businesses, we believe
the shift of the financial services sector to cloud computing will continue at
pace. Our pipeline of business with both existing and potential new
customers provides us with a considerable runway of visible revenue and our
balance sheet strength has enabled us to continue to make substantial
investment into product, people and stock capacity to capitalise on this
pipeline and considerable market opportunity."
For further information please contact:
Beeks Financial Cloud Group plc
Gordon McArthur, CEO via Alma PR
Fraser McDonald, CFO
Canaccord Genuity +44(0)20 7523 8000
Adam James / Patrick Dolaghan
Alma PR +44(0)20 3405 0212
Caroline Forde / Hilary Buchanan / Joe Pederzolli
The Directors of the Company are responsible for the contents of this
announcement.
ABOUT BEEKS FINANCIAL CLOUD
Beeks Financial Cloud is a leading cloud computing, connectivity and analytics
provider for financial services. Our cloud-based Infrastructure-as-a-Service
(IaaS) model allows financial organisations the flexibility and agility to
deploy and connect to a variety of exchanges, trading venues and cloud service
providers at a fraction of the cost of building their own networks and
infrastructure. Based in the UK with an international network of 27
datacentres, Beeks supports its global customers at scale in the leading
financial centres.
For more information, visit: www.beeksfinancialcloud.com
(http://www.beeksfinancialcloud.com/)
Chief Executive Officer's Review
Our vision is simple: Build. Connect. Analyse. Providing end to end
outsourcing of financial services compute environments.
I am pleased to report on continued strong trading, delivering significant
growth in revenue, EBITDA and ACMRR and making good progress with the
substantial opportunities in our new business pipeline.
Since our IPO in FY 2018, we have been focused on extending our offering to
meet the needs of the world's largest financial services organisations,
investing in our product set and team. These investments have resulted in the
launch of Proximity Cloud in August 2021, a pre-built low-latency private
cloud delivered to site for financial services organisations, and Exchange
Cloud in June 2022, an evolution of our Proximity Cloud offering, explicitly
designed for global financial exchanges.
We believe Exchange Cloud represents a transformative opportunity for Beeks,
as the end-user compute market within exchange data centres is considerable.
There is no comparable offering on the market and we have secured notable
early endorsements of the product.
Our confidence in the Exchange Cloud offering is underpinned by our record
pipeline of opportunities and while dealing with organisations of this size
naturally takes time, we are confident in our ability to continue capitalising
on the significant opportunity. We are currently in final contractual
negotiations with two material Exchange Cloud clients following 12 and 18
month sales cycles and proofs of concept.
Financial Performance
Revenue in the period grew by 35% to £10.40m (H1 2022: £7.72m), resulting in
an increase in underlying EBITDA of 48% to £3.59m (H1 2022: £2.43m). Beeks
continues to have a strong recurring revenue profile , and customer retention
remained within target. Our ACMRR grew 35% to £21.3m at 31 December 2022 (H1
2022: £15.8m).
Investment during the period was primarily into the evolution of Exchange
Cloud and our strong balance sheet provides us with the resources to continue
exploiting the market opportunity of our Exchange, Proximity and Private Cloud
offerings.
Operating margins have remained stable during the period, in line with the
Board's expectations.
Operational Expansion
This was another period of investment across the business, in which we
expanded our offering and team in order to strengthen our position in the
rapidly growing cloud computing market. Headcount in the first half increased
to 106, up from 89 as at 30 June 2022. Our main priority during the period was
to further build out our software development team in to support the roll out
and evolution of Exchange Cloud. We now have approximately one third of our
total headcount within our internal software development function which
largely completes our investment into this team.
Although we are not immune to well-documented macroeconomic issues such as
inflationary pressure and supply chain disruption, we continue to manage the
situation well. Appropriate price increases have been introduced in response
to elevated energy prices, and whilst supply chain issues do persist, lead
times are now easing and we are optimistic of a slowly improving picture.
Having additional balance sheet strength has enabled us to front load capacity
in order to reduce the impact of lead time delays and fulfil customer orders.
We remain confident in our ability to offset the impact of macroeconomic
challenges.
We increased our data centre presence in the first half, with a focus on
existing locations. We were pleased to open another data centre in Toronto, as
well as significantly expanding in London. We now have data centres in 15
locations and will continue with our approach of expanding into areas where we
already have customer demand.
Product Roadmap
We remain focused on building out the functionality of Exchange and Proximity
Cloud. Areas of development in the period included extending the feature set
to provide richer functionality, adding additional network features and
developing additional business analysis functions that will assist customers
in understanding their networks and support their end client billing. We have
also improved the automation of provisioning of new compute items for our
customers through a change to the virtualisation platform. Ultimately these
new virtualisation features will reduce our cost base and support faster time
to market.
We have a fully funded product roadmap that extends out for the next couple of
years and see significant opportunity through investing resources in our two
major product lines: our Private/Public and our Proximity/Exchange Cloud
offerings.
Future Growth and Outlook
With our proven track record and well-established reputation as a provider of
technology to the financial markets, we retain strong confidence in continued
success for the Group. Our principal focus for the second half will be to
convert our substantial pipeline of opportunities across the newly launched
Exchange Cloud offering with two material contracts at the final negotiation
stage.
While the macro environment presents challenges to all businesses, we believe
the shift of the financial services sector to cloud computing will continue at
pace and our pipeline of business with both existing and potential new
customers provides us with a considerable runway of visible revenue,
reinforcing the Board's confidence in achieving results for the year in line
with current market expectations.
Gordon McArthur
CEO
27 February 2023
Chief Financial Officer's Review
Financial Review
We are pleased to report on another strong set of financial results for the
first half of the year where we have continued to invest but also
significantly grown the top line during another period of sales growth.
Group revenues grew by 35% to £10.40m (H1 2022: £7.72m) primarily driven by
the expansion of our Tier 1 customer base as we execute on our land and expand
strategy. During the period we have grown our existing Tier 1 contract values
and signed additional Tier 1 customers which now represent 50% (H1 2022: 30%)
of our total revenue.
Our core Private Cloud offering has continued to grow and has largely driven
the sales increase, whilst our sales pipeline for Proximity and Exchange
remains strong, as referenced earlier in this report.
Gross profit in the period increased by 47% to £4.35m (H1 2022: £2.97m) with
gross margin up at 41% (H1 2022: 37%). Gross margins in the period have been
helped by the recurring element of Proximity Cloud sales during the second
half of the previous year as we start to see a return on our investment made.
As with prior year trends, as we deliver material signed contracts over the
second half of the year, we expect gross margins to increase in percentage
terms as part of the cost of up-front infrastructure investment has already
been made.
Underlying EBITDA increased by 48% to £3.59m (H1 2022: £2.43m) with
underlying EBITDA margins at 35% (H1 2022: 31%). Underlying operating profit
increased by 39% to £0.85m (H1 2022: £0.61m). Underlying operating profit
is defined as operating profit excluding grant income, amortisation on
acquired intangibles, share based payments and exceptional non-recurring
costs.
Underlying EBITDA, underlying operating profit, underlying profit before tax
and underlying earnings per share are alternative performance measures,
considered by the Board to be a better reflection of true business performance
than statutory measures only.
Key performance indicator review
H1 2023 H1 2022 Growth
Revenue £10.40m £7.72m 35%
ACMRR £21.3m £15.8m 35%
Gross profit £4.35m £2.97m 46%
Gross margin 41.8% 38.5%
Underlying EBITDA £3.59m £2.43m 48%
Underlying EBITDA margin 34.5% 31.4%
Underlying profit before tax £0.65m £0.45m 44%
Underlying basic EPS 1.35p 0.90p 50%
*All references to margins are as a percentage of revenue.
(Loss)/Profit before Tax
Period ended 31 Dec 2022 Period ended 31 Dec 2021
£000 £000
(Loss) before tax for the period (762) (266)
Deduct:
Grant Income (130) (229)
Add back:
Non-recurring costs 81 132
Amortisation of acquired intangibles 301 399
Share based payments 1,155 414
Underlying profit for the period 645 450
Beeks reported a loss before tax of £0.76m (H1 2022: loss of £0.27m) with
underlying profit before tax increasing to £0.65m (H1 2022: £0.45m).
Cost of sales (excluding amortisation on acquired assets) increased by 29% to
£5.94m (H1 2022: £4.62m), largely driven by both an increase of depreciation
of £0.67m on our larger infrastructure asset base and an increase of the
direct cost of sales as we have added capacity across our global data centre
estate during the period.
There has been an increase in administrative expenses when compared to the
prior year (excluding share based payments and non-recurring costs) of 35% to
£3.67m (H1 2022: £2.52m) largely driven by an increase in staff costs of 53%
(excluding share based payments and net of capitalisation) to £2.17m in the
period (H1 2022: £1.42m). During the period we have grown our headcount to
106, up from 89 as at 30 June 2022 and from 87 as at 31 December 2021,
primarily in the software development area as we continue to evolve and
exploit the Proximity and Exchange Cloud opportunity.
We have continued to invest in product, most significantly in product
enhancements to Exchange Cloud. As such, capitalised development costs in the
period were £1.43m (H1 2022: £1.28m). Most of this cost is internally
generated as we use our in-house teams to develop the bespoke technology we
require.
Taxation
The effective tax rate ('ETR') for the period is -37%, (H1 2022: 9%). The
lower ETR has benefitted from HMRC's "Super-deduction" announced in the UK's
2021 budget where companies can claim 130% capital allowances on qualifying
plant and machinery investments. As with previous years, we also benefit from
the impact of R&D tax credits.
Earnings per Share and Dividends
Underlying earnings per share has increased to 1.35 pence (H1 2022: 0.90
pence). Underlying diluted earnings per share has increased to 1.25 pence
(H1 2022: 0.85 pence). The calculation of both underlying basic and diluted
earnings per share is included in note 6.
Balance Sheet and Cash Flows
The Group generated an increase of cash from operations (before movement in
working capital) in the period of 46%, up to £3.68m (H1 2022: £2.52m).
Expenditure on investing activities was again significant as we invested
£4.17m (H1 2022: £6.28m) in property, plant and equipment (including stock
capacity) across our infrastructure estate. This investment will support Tier
1 expansion and deployments and includes up front stock capacity as we de-risk
longer lead times in recognition of global kit shortages. We have seen a
slight increase in capitalised development costs of £1.43m (H1 2022: £1.28m)
as our larger in-house development teams add further feature functionality in
Proximity Cloud, Exchange Cloud and Beeks Analytics which is a key strategic
component of Exchange Cloud.
During the period we prudently took an asset finance facility of £1.36m as
well as re-financing our loan facilities with Barclays to better preserve
cash. Period end debt has been reduced to £3.34m (H1 2022: £4.83m). Cash and
cash equivalents totalled £6.70m at 31 December 2022 (H1 2022: £1.10m) with
trade and other receivables of £5.60m (H1 2022: £2.80m) as well as
inventories of £2.35m (H1 2022: £nil). Gross debt remains at a comfortable
level of 0.5x underlying annualised EBITDA (H1 2022: 1.0x). Gross debt is
defined as borrowings excluding IFRS16 lease liabilities divided by the
annualised underlying EBITDA.
At the end of the period, the Group had net cash of £3.35m (H1 2022 net debt:
£3.73m).
At 31 December 2022 net assets were £31.54m compared to net assets of
£14.00m at 31 December 2021 and net assets of £30.76m at 30 June 2022.
Fraser McDonald
CFO
27 February 2023
Beeks Financial Cloud Group PLC
Consolidated statement of comprehensive income
For the period ended 31 December 2022
6 months to Year to
Note December 2022 (unaudited) December 2021 (unaudited) June
2022 (audited)
£'000 £'000 £'000
Revenue 3 10,398 7,724 18,289
Other Income 3 191 258 512
Cost of sales (6,241) (5,016) (10,862)
Gross profit 4,348 2,966 7,939
Administrative expenses (4,910) (3,070) (7,554)
Operating (loss)/profit 4 (562) (104) 385
Analysed as:
Earnings before depreciation, amortisation, acquisition costs, share based 3,723 2,657 6,811
payments and non-recurring costs
Share based payments 4 (1,155) (414) (1,661)
Other non-recurring costs (81) (132) (24)
Depreciation 4 (2,149) (1,483) (3,213)
Amortisation - acquired intangible assets (301) (399) (802)
Amortisation - other intangible assets (599) (333) (726)
Operating loss (562) (104) (385)
Finance income - 2 21
Finance costs (200) (164) (340)
(Loss)/profit before taxation for the period (762) (266) 66
Taxation 5 284 33 760
(Loss)/profit after taxation for the period (478) (233) 826
Other comprehensive income
Amounts that may be reclassified to profit and loss
Currency translation differences 104 14 5
Total comprehensive (loss)/income for the period (374) (219) 831
Pence Pence Pence
Basic (loss)/earnings per share 6 (0.73) (0.42) 1.43
Diluted (loss)/earnings per share 6 (0.73) (0.41) 1.42
Beeks Financial Cloud Group PLC
Consolidated statement of financial position
For the period ended 31 December 2022
December 2022 (unaudited) December 2021 (unaudited) June
2022 (audited)
Assets Note £'000 £'000 £'000
Non-current assets
Intangible 7 7,347 6,313 6,698
assets
Property, plant and 8 17,835 15,184 16,270
equipment
Deferred tax 5 4,413 946 4,201
Total non-current assets 29,595 22,443 27,169
Current assets
Trade and other receivables 6,203 2,851 5,600
Inventories 2,351 - 1,818
Cash and cash equivalents 6,696 1,109 10,160
Total current assets 15,250 3,960 17,578
Total assets 44,846 26,403 44,747
Liabilities
Non-current liabilities
Borrowings 10 247 1,360 1,320
Lease liabilities 10 2,428 2,671 2,303
Deferred tax 5 2,968 617 2,968
Total non-current liabilities 5,643 4,648 6,591
Current liabilities
Trade and other payables 4,040 3,272 5,139
Lease liabilities 10 1,778 1,049 1,280
Borrowings 10 1,844 3,474 978
Total current liabilities 7,662 7,795 7,397
Total liabilities 13,305 12,443 13,988
Net assets 31,540 13,960 30,759
Equity
Issued capital 82 70 82
Share premium 23,775 9,452 23,775
Reserves 3,898 1,461 2,657
Retained earnings 3,785 2,977 4,245
Total equity 31,540 13,960 30,759
Beeks Financial Cloud Group PLC
Consolidated statement of changes in equity
For the period ended 31 December 2022
Issued capital Foreign currency Merger reserve Other reserve Share based payment reserve Share premium Retained earnings Total equity
retranslation reserve
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Balance at 1 July 2021 70 (12) 705 (315) 883 9,452 2,982 13,765
Loss after tax for the period - - - - - - (233) (233)
Total comprehensive income for the period - - - - - - (233) (233)
Currency translation difference - 14 - - - - - 14
Share based payments - - - - 414 - - 414
Dividends paid - - - - (228) - 228 -
Balance at 31 December 2021 70 2 705 (315) 1,069 9,452 2,977 13,960
Profit after tax for the period - - - - - - 826
Total comprehensive income for the period - - - - - - 826 826
Currency translation difference - 5 - - - - - 5
Share based payments
Exercise of share options - - - - 1,661 - - 1,661
(270) 270 -
Issue of share capital 12 - - - - 14,323 - 14,335
Deferred tax - - - - - - 167 167
Balance at 30 June 2022 (audited) 82 (7) 705 (315) 2,274 23,775 4,245 30,759
Balance at 1 July 2022 82 (7) 705 (315) 2,274 23,775 4,245 30,759
Loss after tax for the period - - - - - - (478) (478)
Total comprehensive income for the period - - - - - - (478) (478)
Currency translation difference - 104 - - - - - 104
Share based payments - - - - 1,155 - - 1,155
Exercise of share options - - - - (17) - 17 -
Balance at 31 December 2022 (unaudited) 82 97 705 (315) 3,412 23,775 3,784 31,540
Beeks Financial Cloud Group PLC
Consolidated cash flow statement
For the period ended 31 December 2022
6 months to Year to
December 2022 (unaudited) December 2021 (unaudited) June
2022 (audited)
£'000 £'000 £'000
Cash flows from operating activities
(Loss)/profit before taxation for the period (762) (266) 66
Adjustments for:
Depreciation and amortisation 3,049 2,215 4,741
Share based payment charge 1,155 - 1,661
Gain on disposal of property, plant and equipment - 414 (24)
Foreign Exchange 42 (2) (66)
Bank Charges 53 49 95
Loan Interest 147 113 245
Finance income - (2) (21)
Operating cash flows before movements in working capital 3,684 2,521 6,697
Increase in trade and other receivables (733) (398) (3,014)
Increase in Inventory (485) - (988)
(Decrease) / increase in trade and other payables (1,456) (923) 1,765
Cash generated from operating activities before tax 1,010 1,200 4,460
Corporation tax received 125 48 44
Net cash generated from operating activities 1,135 1,248 4,504
Cash flows from investing activities
Purchase of property, plant and equipment (3,382) (5,038) (9,562)
Capitalisation of development costs (1,433) (1,277) (2,590)
Proceeds from disposal of property, plant and equipment - - 60
Net cash used in investing activities (4,815) (6,315) (12,092)
Cash flows from financing activities
Drawdown of bank loans - 3,670 -
Bank Charges (52) (49) (95)
Repayment of existing bank loans (207) (321) (2,900)
Repayment of asset financing (113)
Lease liabilities (542) (327) (936)
Interest on lease liabilities (80) (58) (131)
Loan interest (147) (113) (242)
-
Interest received - 2 21
Issue of loans 1,358 - 3,670
Proceeds from the issue of new share capital - - 14,989
Net cash generated from financing activities 216 2,804 14,376
Net (decrease)/increase in cash and cash equivalents (3,464) (2,263) 6,788
Cash and cash equivalents at the beginning of the financial period 10,160 3,372 3,372
Cash and cash equivalents at the end of the financial period 6,696 1,109 10,160
Beeks Financial Cloud Group PLC
Notes to the financial statements
For the period ended 31 December 2022
Note 1. General information
The financial information covers the consolidated entity, Beeks Financial
Cloud Group PLC and the entities it controlled at the end of, or during, the
interim period to 31 December 2022.
The company is a public limited company which is quoted on the Alternative
Investment Market and is incorporated and domiciled in United Kingdom. Its
registered office and principal place of business is:
Registered office
Riverside Building
2 Kings Inch Way
Unit A
Riverside
Braehead
PA4 8YU
Note 2. Basis of preparation
The financial information for the period ended 31 December 2022 set out in
this interim report does not constitute statutory accounts as defined in
Section 434 of the Companies Act 2006 and is unaudited. The figures for the
year ended 30 June 2022 have been extracted from the Group financial
statements for that year. Those have been filed with the Registrar of
Companies. The auditor's report on those financial statements was unmodified
and did not contain statements under Section 493 of the Companies Act 2006.
The interim financial information has been prepared using the same accounting
policies and estimation techniques as will be adopted in the Group financial
statements for the year ending 30 June 2023. The group financial statements
for the year ended 30 June 2022 were prepared under international accounting
standards in conformity with the requirements of Companies Act 2006. These
interim financial statements have been prepared on a consistent basis and
format with the Group financial statements for the year ended 30 June 2022,
and have not been audited or reviewed by the auditors.
The provisions of IAS 34 'Interim Financial Reporting' have not been applied
in full.
Going Concern
The Group's business activities, together with the factors likely to affect
its future development, performance and position are set out in the Chief
Executive's Statement.
The directors are of the opinion that the Group can operate within their
current debt facilities and comply with its banking covenants. At the end of
the period, the Group had net cash of £3.35m (H1 2022 net debt: £3.73m) a
level which the Board is comfortable with given the strong cash generation of
the Group. The Group has a diverse portfolio of customers with relatively low
customer concentration which are split 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
for the next eighteen months, and associated risks along with the availability
of bank, leasing facilities as well as potential further equity raises. We
have run appropriate scenario and stress tests applying reasonable downside
sensitivities and are confident we have the resources to meet our liabilities
as they fall due. 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.
Note 3. Operating Segments
Identification of reportable operating segments
Operating segments are reported 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
Board.
During the period ended 31 December 2022, the Group was organised into two
main business segments for revenue purposes. The group does not place reliance
on any specific customer and has no individual customer that generates 34% or
more of its total group revenue. During the year ended 30 June 2022, the Group
was reorganised from three operating segments, being institutional, retail and
analytics into two main segments as a result of the strategic direction of the
Group. The two new segments are public/private cloud and Proximity
Cloud/Exchange Cloud. Retail and analytics segments are no longer reviewed in
isolation by the chief operating decision makers and instead considered under
the wider public/private cloud segment.
Performance is assessed by a focus on the change in revenue across
public/private cloud and new sales relating to Proximity Cloud/Exchange Cloud.
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:
Period ended 31/12/22 (£'000) (Unaudited) Period ended 31/12/21 (£'000) Year ended 30/06/22 (£'000)
(Unaudited) (Audited)
Public/ Proximity /Exchange Cloud Total Public/ Proximity /Exchange Cloud Total Public/ Proximity /Exchange Cloud Total
Private Cloud Private Cloud Private Cloud
Over time
Infrastructure/software as a service 9,078 - 9,078 5,541 - 5,541 13,057 - 13,057
Maintenance 270 - 270 221 - 221 518 - 518
Proximity Cloud - 201 201 - 17 17 - 57 57
Professional services 138 - 138 86 - 86 234 - 234
Over time total 9,486 201 9,687 5,848 17 5,865 13,809 57 13,866
Point in time
Proximity Cloud - - - - 403 403 - 2,222 2,222
Hardware/Software resale 474 - 474 1,038 - 1,038 1,601 - 1,601
Software licences 186 - 186 307 - 307 520 - 520
Set up fees 51 - 51 111 - 111 80 - 80
Point in time total 711 - 711 1,456 403 1,859 2,201 2,222 4,423
Total revenue 10,197 201 10,398 7,304 420 7,724 16,010 2,279 18,289
6 months to Year to
December 2022 (unaudited) December 2021 (unaudited) June
2022 (audited)
£'000 £'000 £'000
Revenues by geographic location are as follows:
United Kingdom 2,385 1,674 5,849
Europe 1,454 1,236 2,508
US 3,711 1,464 5,556
Rest of World 2,848 3,350 4,376
Total 10,398 7,724 18,289
During the period, £130k (H1 22: £229k) was recognised in other income for
grant income received from Scottish Enterprise and £61k (H1 22: £nil) was
recognised as rental income.
Note 4. Operating (loss)/profit
6 months to Year to
December 2022 (unaudited) December 2021 June
2022 (audited)
(unaudited)
£'000 £'000 £'000
Operating (loss)/profit is stated after charging:
Depreciation 1,487 1,000 2,189
Staff costs 3,586 2,695 5,637
Depreciation of right-of-use asset 662 483 1,024
Amortisation of intangibles 900 732 1,528
Currency translation (loss)/gain 104 (15) (98)
Other cost of sales * 3,192 2,615 6,452
Share based payments 1,155 414 1,661
Non-recurring costs 81 132 24
* Included within other cost of sales are the direct costs associated with the
business including data centre connectivity, software licences, security and
other direct support costs.
Note 5. Taxation
6 months to Year to
December 2022 (unaudited) December 2021 (unaudited) June
2022 (audited)
£'000 £'000 £'000
Current Tax
R&D tax receipt (125) - -
Corporation tax on (losses)/profits for the period - - -
Adjustment relating to prior periods - (9) -
Foreign tax on overseas companies 53 26 33
Total current tax (credit)/charge (72) 17 33
Deferred tax
Prior year deferred tax adjustments - - (358)
Origination and reversal of temporary differences (212) (50) (435)
Total deferred tax credit (212) (50) (793)
Total tax credit (284) (33) (760)
The effective tax rate for the six months to 31 December 2022, based on the
taxation (credit)/charge for the period as a percentage of the profit before
tax is (37%) (H1 2022: (9%)). The ETR is lower than expected due to the impact
of the super deduction.
Note 6. Earnings per share
As at 31 December 2022, the company had 65,428,710 shares (H1 2022:
56,315,854).
Basic earnings per share is calculated by dividing the earnings attributable
to ordinary shareholders by the weighted average number of ordinary shares in
issue during the year. Diluted earnings per share is calculated by dividing
the earnings attributable to ordinary shareholders by the total of the
weighted average number of ordinary shares in issue during the year and
adjusting for the dilutive potential ordinary shares relating to share
options.
6 months to Year to
December 2022 (unaudited) December 2021 (unaudited) June
2022 (audited)
£'000 £'000 £'000
(Loss)/Profit after taxation attributable to the owners of Beeks Financial (478) (233) 826
Cloud Group PLC
Pence Pence Pence
Basic (loss)/earnings per share (0.73) (0.73) (0.42) 1.43
Diluted (loss)/earnings per (0.41) 1.42
share
Weighted average number of ordinary shares used in calculated basic earnings 65,407,957 56,118,764 57,885,241
per share
Adjustments for calculation of diluted earnings per share: 20,873 191,336 96,454
Options over ordinary shares
Weighted average number of ordinary shares used in calculated diluted earnings 65,428,829 56,310,100 57,981,696
per share
6 months to Year to
December 2022 (unaudited) December 2021 (unaudited) June
2022 (audited)
£'000 £'000 £'000
Underlying earnings per share
Underlying profit after taxation attributable to the owners of Beeks Financial 881 507 2,599
Cloud Group PLC
Pence Pence Pence
Underlying earnings per share - basic 1.35 0.90 4.48
Underlying earnings per share - diluted 1.25 0.85 4.19
Weighted average number of ordinary shares used in calculated basic earnings 65,407,957 56,118,764 57,885,241
per share
Adjustments for calculation of diluted earnings per share: 5,177,149 191,336 96,454
Options over ordinary shares
Weighted average number of ordinary shares used in calculated diluted earnings 70,585,106 56,310,100 57,981,696
per share
Included in the weighted average number of shares for the calculation of
underlying diluted EPS are share options that have vested and that are not yet
exercised and share options that have still to meet vesting criteria. It is
management's intention that the vested shares will be exercised and that the
Group will meet the challenging growth targets for the unvested shares to
vest. As such, both these types of share options have been included in the
underlying diluted EPS calculation.
Note 7. Intangible Assets
Acquired Customer Development
lists Costs Trade name Goodwill Total
£000 £000 £000 £000 £000
Cost
As at 1 July 2021 2,383 3,990 137 2,336 8,846
Additions - 1,277 - - 1,277
Grant funding received - (255) - - (255)
Foreign exchange movements (6) - - - (6)
As at 31 Dec 2021 2,377 5,012 137 2,336 9,862
Additions - 1,314 - - 1,314
Grant funding received - (177) - - (177)
Foreign exchange movements 153 - - - 153
As at 30 June 2022 2,530 6,148 137 2,336 11,151
Additions - 1,433 - - 1,433
Grant funding - 130 - - 130
Foreign exchange movements (9) - - - (9)
As at 31 Dec 2022 2,521 7,711 137 2,336 12,705
Accumulated Amortisation
Balance at 1 July 2021 (773) (1,064) (34) (968) (2,839)
Charge for the period (135) (583) (14) - (732)
Foreign exchange movements 22 - - - 22
As at 31 Dec 2021 (886) (1,647) (48) (968) (3,549)
Charge for the period (152) (631) (13) - (796)
Foreign exchange movements (108) - - - (108)
As at 30 June 2022 (1,146) (2,278) (61) (968) (4,453)
Charge for the period (148) (738) (14) - (900)
Foreign exchange movements (5) - - - (5)
As at 31 Dec 2022 (1,299) (3,016) (75) (968) (5,358)
N.B.V. 31 Dec 2022 1,222 4,695 62 1,368 7,347
N.B.V. 30 June 2022 1,384 3,870 76 1,368 6,698
N.B.V. 31 Dec 2021 1,491 3,365 89 1,368 6,313
Note 8. Non-current assets - Property, plant and equipment
Computer Office Leasehold Property and Freehold Property
equipment equipment improvement Total
£000 £000 £000 £000 £000
Cost
As at 1 July 2021 12,311 71 3,908 - 16,290
Additions 2,672 26 1,255 - 3,953
As at 31 December 2021 14,983 97 5,163 - 20,243
Additions 2,383 137 742 3,034 6,296
Foreign exchange movement 7 - - - 7
Stock transfers (830) - - - (830)
Disposals - (54) (485) - (539)
As at 30 June 2022 16,543 180 5,420 3,034 25,177
Additions 3,654 32 - - 3,686
Foreign exchange movement - - (169) - (169)
Stock transfers (48) - - - (48)
As at 31 December 2022 20,149 212 5,251 3,034 28,646
Depreciation
As at 1 July 2021 (4,647) (38) (1,215) - (5,900)
Charge for the period (966) (20) (483) (14) (1,483)
As at 31 December 2021 (5,613) (58) (1,698) (14) (7,383)
Charge for the period (1,168) (8) (541) (13) (1,730)
Foreign exchange movement 3 - - - 3
Disposals - 18 185 - (203)
As at 30 June 2022 (6,778) (48) (2,054) (27) (8,907)
Charge for the period (1,429) (23) (662) (35) (2,149)
Foreign exchange movement 29 - 218 - 247
As at 31 December 2022 (8,178) (71) (2,499) (62) (10,809)
N.B.V. 31 December 2022 11,970 141 2,752 2,972 17,835
N.B.V. 30 June 2022 9,765 132 3,366 3,007 16,270
N.B.V. 31 December 2021 9,370 39 3,465 2,310 15,184
Of the total additions in the period of £3.69m, £nil (H1 2021: £1.26m)
relates to right-of-use assets, which have a carrying value of £2.75m (H1
2021: £2.70m)
Note 9. Analysis of change in net debt
Cash and cash equivalents Bank loans Lease liabilities Total net debt
£000 £000 £000 £000
At 30 June 2021 3,372 (1,485) (2,866) (979)
Cash and cash equivalents cash outflow (2,263) - - (2,263)
Proceeds from new loans - (3,670) - (3,670)
Repayment of old loans - 321 - 321
Lease additions - - (1,239) (1,239)
Repayment of leases - - 385 385
At 31 December 2021 1,109 (4,834) (3,720) (7,445)
Cash and cash equivalents cash outflow (5,938) - - (5,938)
Proceeds from issue of share capital 14,989 - - 14,989
Repayment of old loans - 2,537 - 2,537
Lease additions - - (545) (545)
Repayment of leases - - 682 682
At 30 June 2022 10,160 (2,297) (3,583) 4,280
Cash and cash equivalents cash outflow (3,464) - - (3,464)
Lease additions - - (1,358) (1,358)
Repayment of loans - 207 - 207
Repayment of leases - - 735 735
At 31 December 2022 6,696 (2,090) (4,206) 400
Note 10. Borrowings
31-Dec-22 31-Dec-21 30-Jun-22
£000 £000 £000
Current:
Right of Use Lease liabilities 1,778 1,049 1,280
Bank loans 1,844 3,474 978
Total current borrowings 3,622 4,523 2,258
Non-current:
Right of Use Lease liabilities 2,428 2,671 2,303
Bank loans 247 1,360 1,320
Total non-current borrowings 2,675 4,031 3,623
Total borrowings 6,297 8,554 5,881
Included within right of use lease liabilities is the asset financing facility
of £1.25m entered into during the period.
Note 11. Availability of announcement and Half Yearly Financial Report
Copies of this announcement are available on the Company's website,
www.beeksfinancialcloud.com. Copies of the Interim Report will be downloadable
from the Company's website and available from the registered office of the
Company shortly.
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