REG - Beeks Fin Cloud Grp - Interim Results
17/03/2025 07:00
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RNS Number : 8243A Beeks Financial Cloud Group PLC 17 March 2025
.
Beeks Financial Cloud Group plc
("Beeks" or the "Company")
Interim Results
17(th) March 2025 - 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 2024.
Financial Highlights
· Revenues increased by 22% to £15.79m (H1 2024: £12.96m)
· Annualised Committed Monthly Recurring Revenue (ACMRR) up 7% to £28.50m (H1
2024: £26.60m)
· Gross profit up by 21% to £6.03m (H1 2024: £4.99m)
· Underlying EBITDA* increased by 25% to £5.74m (H1 2024: £4.61m)
· Underlying profit before tax** up 37% to £1.89m (H1 2024: £1.38m)
· Statutory profit before tax up 188% to £0.46m (H1 2024: £0.16m)
· Underlying diluted EPS*** up 47% to 2.61 pence (H1 2024: 1.77 pence)
· Cash flow from operations (before movement in working capital) up 23% to
£5.76m (H1 2024: £4.69m)
· Net cash**** of £6.57m (H1 2024: £5.44m; 30 June 2024: £6.58m)
* Underlying EBITDA is defined as profit for the period before amortisation,
depreciation, finance costs, taxation, 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, share based payments, exchange rate
gains/losses on statement of financial position translation and exceptional
non-recurring costs
***Underlying diluted EPS is defined as underlying profit after underlying tax
divided by the weighted average number of ordinary shares including share
options outstanding but not exercisable.
**** Net cash is defined as cash less total bank loans and asset financing
liabilities
Operational Highlights
· Another period of double-digit growth in revenue and underlying Profit before
Tax
· Significant Exchange Cloud contract wins secured, including the approval and
launch of the multi-year contract with one of the largest exchanges globally,
with the first customers now on-boarded and progressing to plan. Also a
post-period win with Grupo Bolsa Mexicana de Valores, the second-largest
exchange in Latin America
· Expansion with existing customers including a further extension deal with the
Johannesburg Stock Exchange to meet strong customer demand
· Continued investment in product innovation to build and develop the
functionality of Exchange and Proximity Cloud
Outlook
· ACMRR further increased to £29.2m as at the end of February 2025
· First Exchange Cloud win in crypto space under new revenue share model,
further increasing the TAM for Exchange Cloud as we enter new asset classes.
Kracken is one of the longest-standing, most liquid and secure cryptocurrency
exchanges
· Increasing Exchange Cloud momentum highlights the product's transformational
potential, with the regulatory and legal landscape remaining conducive for
Beeks' product offering
· Several of the world's leading exchanges in final stages of conversations and
multiple other opportunities in the sales funnel
· Outlook for FY25 remains positive and within the range of market expectations
· Development of an AI-based analytics offering Market Edge Intelligence,
providing cutting-edge latency and client experience insights to enhance
trading performance, launching in the next financial year
· Transition to a revenue-sharing model for Exchange Cloud contracts to enhance
profitability and drive long-term value
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:
· Profit before tax of £0.46m (H1 2024: £0.16m)
· Basic earnings per share profit of 0.47p (H1 2024: 0.12p)
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:
"We have once again successfully delivered double-digit growth and increasing
profit margins as we grow and scale with some of the largest financial
organisations globally. Our unique proposition has the potential to transform
the future of cloud technology in capital markets. The regular flow of new
contracts and the conversations currently taking place with Tier 1
organisations around the world reflects the value of our offering and provides
us with confidence in continued strong uptake throughout H2 and beyond."
This announcement contains inside information for the purposes of article 7 of
the Market Abuse Regulation (EU) 596/2014 as it forms part of domestic law by
virtue of the European Union (Withdrawal) Act 2018.
For further information please contact:
Beeks Financial Cloud Group plc via Alma
Gordon McArthur, CEO
Fraser McDonald, CFO
Canaccord Genuity +44 (0)20 7523 8000
Adam James / George Grainger
Alma Strategic Communications +44(0)20 3405 0205
Caroline Forde / Joe Pederzolli / Emma Thompson
About Beeks:
Cloud computing is crucial to Capital Markets and finance.
Beeks Group is a leading managed private infrastructure provider exclusively
within this fast-moving sector. Our Infrastructure-as-a-Service model is
optimised for low-latency 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 www.beeksgroup.com (http://www.beeksgroup.com)
Chief Executive Officer's Review:
Our vision is simple: Build. Connect. Analyse. Providing end-to-end
outsourcing of financial services compute environments.
The Group's track record of strong financial performance has continued in H1
FY25, with another period of double-digit growth in revenue and underlying
Profit before tax. Our recurring revenue profile has been a strength, at 78%
of total revenue (H1 2024: 87%), alongside increasing levels of high-quality
revenue from our Exchange Cloud and Proximity Cloud customers. We now continue
our growth trajectory as an increasingly profitable and operationally
cash-generative business.
The opportunity offered by Exchange Cloud is transformational. The series of
extension deals signed with JSE, as well as the other contract wins with large
exchanges in H1 and post-period end, have seen Exchange Cloud momentum
continuing, and with substantial expansion potential at each customer
alongside a steadily growing and progressing pipeline of additional wins, we
are confident in continued progress. This is most recently evidenced by the
post-period end win with Kraken, the large cryptocurrency exchange based in
San Francisco.
Our robust, secure, and scalable platforms provide the reliability and
flexibility required for financial institutions in an ever evolving and
complex trading landscape. By focusing on continuous product enhancement and
customer-centric innovation, Beeks is positioned as a trusted partner for
financial institutions worldwide. One of our key focusses in the period has
been on the evolution of a ground-breaking AI-based analytics offering, Edge
Intelligence, which we intend to launch in FY26, adding another potential
avenue for growth.
With a strong sales pipeline and a continued focus on Tier 1 opportunities,
Beeks is well-positioned for sustained growth in H2 and beyond.
Financial Performance
Revenue in the period grew by 22% to £15.8m (H1 2024: £13.0m), resulting in
an increase in underlying EBITDA of 25% to £5.7m (H1 2024: £4.6m). This
period we have successfully improved operating profit margins with underlying
profit before tax growth of 37% to £1.9m (H1 2024: £1.4m). Additionally, the
Group has again achieved a positive operational free cash flow position, with
unaudited net cash of £6.6m at 31 December 2024 (30 June 2024: £6.6m, 31
December 2023: £5.4m), with the Company having received a delayed post period
end payment of £1.2m in early January.
Beeks continues to have a strong recurring revenue profile, with customer
retention remaining high, albeit during the period we had some higher than
historic customer virtual private server churn following the transition of our
server licence estate from VMWare to OpenNebula, as clients cleared out some
legacy infrastructure. These reductions have now stabilised and are not
expected to recur. The reduction in this revenue was more than offset by the
associated lower software licence costs under the new provider therefore did
not impact the overall profitability of the Group. It did have an impact on
our ACMRR which grew at a lower than historic level of 7% in the period to
£28.5m at 31 December 2024 (H1 2024: £26.6m). Revenue was also impacted by
a Proximity Cloud cancellation with a Tier 1 investment manager due to
extraneous circumstances as opposed to service delivery. Nevertheless,
attrition rates remained low at 1.3% (H1 2024: 0.5%) of monthly revenue. Our
focus has remained on growing both the Proximity and Exchange Cloud customer
base and we have now have a total of 13 Proximity and Exchange Cloud racks
live (H1 2023: 7). ACMRR further increased to £29.2m as at the end of
February 2025 and we expect ACMRR growth to return to historical levels,
particularly given the new commercial revenue share model of Exchange cloud.
Operational Expansion
We have held headcount steady during the period, investing instead in
automation to maximise the efficiency of our existing team. The hires during
the period have predominantly been to add geographic strength to our sales
team, to support the conversion of our pipeline and ongoing Tier 1 customer
account management and in other areas such as security with some offsetting
headcount reduction in software development. Headcount has reduced marginally
to 103 as at 31 December 2024 from 105 people as at 30 June 2024.
We have continued to increase capacity in our data centre footprint during the
period, with a continued focus on existing locations, and the post-period end
Exchange Cloud win with crypto exchange Kraken brings expansion into Kraken's
European data centre. We continue to evaluate new locations in line with our
sales pipeline and strategic direction.
Product Roadmap
Innovation of our products is central to our growth strategy. Key initiatives
include improvements in automation, security enhancements, and Artificial
Intelligence integration. With sustained investment in the AI capabilities of
our Analytics offering and close collaboration with key customers, we have
accelerated the development of Market Edge Intelligence-our edge AI/ML
solution designed to deliver actionable insights that enhance trading
performance and maximise the value of client AI/ML data engineering
investments.
Market Edge Intelligence is a stand-alone supplementary software offering that
customers can access with or without existing Beeks infrastructure, expanding
our addressable market while also creating upsell opportunities for existing
customers. Aimed at Tier 1 and Tier 2 customers and already receiving positive
early feedback, this marks another way we hope to innovate in the financial
services sector when our product launches next financial year. This
reinforces our commitment to recognising and addressing the evolving needs
of the trading landscape.
We have continued to build and develop the functionality of Exchange and
Proximity Cloud, including:
· Investment in single sign-on capabilities to provide clients with a consistent
and secure experience when switching between infrastructure management and
performance analytics views. This enhancement strengthens our technical
offering compared to industry alternatives.
· New displays for large Proximity Cloud and Exchange Cloud users in our
self-service infrastructure management portal, enabling more efficient
capacity management of virtual machines and overall cabinet power draw.
· Real-time client alerting to for key infrastructure metrics. This
functionality allows clients to continuously monitor their systems and address
application issues promptly.
· Integration of a high-performance timeseries database into Beeks Analytics.
This upgrade improves system speed and flexibility, while also providing an
integration point with Edge Intelligence.
Customers
Beeks continues to support a broad customer base across the financial services
sector. Our Land and Expand strategy remains central to our approach, where
we seek to maintain long-term relationships while increasing adoption of our
services.
During the period, Beeks successfully delivered a Proximity Cloud solution to
one of the world's largest banking groups, having achieved preferred bidder
status during March 2024. The deployment includes a low-latency production
environment along with a disaster recovery site. Additionally, a leading
global multi-asset broker has also deployed Beeks Proximity Cloud across
multiple sites, leveraging Beeks' managed infrastructure and connectivity
services to power their trading platform. The contract was won in June 2024.
Notable wins with new and existing customers this period include:
· A further extension to the Exchange Cloud contract with Johannesburg Stock
Exchange. This is a deal that has grown significantly in size, exemplifying
the success of our partnership strategy and showcasing the value of our
Exchange Cloud product.
· Approval and launch of the multi-year Exchange Cloud contract with one of the
largest exchanges globally. The service went live during the period with the
first Exchange Cloud customers being on-boarded post-period end, as expected.
This serves as a significant endorsement of the capability, scale and
value-add of the product.
· Post-period end, the Group secured a major new contract with the Grupo Bolsa
Mexicana de Valores, the second-largest exchange in Latin America.
· The Company also won a post-period end contract with its first crypto
exchange, Kraken. This partnership with one of the longest-standing, most
liquid and secure cryptocurrency exchanges is a significant milestone as it
marks the first step into the crypto platform space, a growing market with
plenty of opportunity for Beeks.
There have been no changes in the regulatory or legal landscape that impact
our current or future Exchange Cloud contracts. Our sales pipeline remains
robust, with strong engagement from Tier 1 clients and significant
opportunities in progress.
Customer contracts
Whilst the revenue recognised to date on Proximity and Exchange Cloud booked
to date has had an element of upfront recognition, we are evolving contracts
with new customers to a revenue sharing model, reflecting our confidence in
the offerings. This approach offers various commercial benefits, including a
shortening sales cycle and higher profitability. The revenue outlook for these
contracts is usage based and therefore more difficult to forecast, however the
benefit of this model will enhance the long-term attractiveness and value of
these contracts.
An immediate example of this is the most recent win of Kraken, a revenue share
deal in which Beeks' offering will be available to Kraken's customer base of
c.13 million customers.
Future Growth and Outlook
The outlook for FY25 remains positive, as evidenced by the latest Kraken win,
with further commercial wins anticipated in the near term. With the evolution
towards certain new contracts being on a revenue-sharing model, current
trading is within the range of market expectations with improving margins. The
pipeline for Exchange Cloud is as strong as ever, with several of the world's
leading exchanges in final stages of conversations and multiple other future
opportunities in the sales funnel.
The steady flow of new contract wins and extensions are material evidence of
the size of the market opportunity ahead and Beeks has the products, the team
and the reputation necessary to seize this opportunity. This competitive
advantage, together with our strong recurring revenue profile and visibility
of pipeline, provides us with confidence in delivering value to our
stakeholders and shaping the future of cloud technology in capital markets
into H2 and beyond.
Gordon McArthur
CEO
17 March 2025
Chief Financial Officer's Review:
Financial Review
We are pleased to report on our first half of the year where we have grown
revenue by 22% and delivered a significant increase in profitability when
compared to H1 2024.
Group revenues grew by 22% to £15.79m (H1 2024: £12.96m) driven by organic
growth in both our core Public/Private Cloud offering as well as new wins in
Exchange and Proximity Cloud. Refer to note 3 for a breakdown of the Group's
revenues.
Our core Public and Private Cloud revenues grew by 8% to £12.65m (H1 2024:
£11.66m).
Our overall contractual revenue (ACMRR) grew 7% to £28.50m (H1 2024:
£26.60m). As referenced earlier within this report, the legacy clean up of
some of our historic VPS estate has had an impact on ACMRR but not on overall
group profitability given the lower server software licencing costs we now
have following the move to OpenNebula. We still have a high proportion of
recurring revenue which gives us good visibility for forecasting and a steady
operating cash collection profile. Recurring revenue represented 78% (H1 2024:
87%) of H1 2025 revenues with the remainder being represented by the upfront
element of Proximity and Exchange Cloud plus hardware and software licence
sales. Recognised revenue in the period was adversely impacted by a Proximity
Cloud cancellation with a Tier 1 investment manager. As referenced earlier in
this report, this was as a result of the customer's budgetary changes as
opposed to service delivery, but still unfortunate. Due to the upfront revenue
recognition of Proximity Cloud, the revenue recognised in the prior period had
to be reversed, resulting in a reversal of £0.46m revenue and £0.15m of
profit.
Despite this, we maintain an established customer base with low attrition
rates at 1.3% (H1 2024: 0.5%) of monthly revenue. We have continued to grow
our Tier 1 customer base as we execute on our land and expand strategy by both
adding new Tier 1 customers and growing our existing Tier 1 customer base.
Tier 1 customers now represent over half of our total revenue, with some of
these contracted via partners.
Non-recurring revenue - growth relating to Exchange and Proximity
During the period we delivered growth in both our Proximity and Exchange Cloud
products via three new customers, recognising additional revenues of £3.3m
relating to these three new contract wins. In February 2024 we announced an
Exchange Cloud win with one of the largest exchange groups globally. This
client went live during the period, with customers being on-boarded post
period end. We also delivered a multi-site Proximity Cloud deployment with one
of the world's largest banking groups, previously announced in March 2024.
This multi-site engagement further demonstrates our ability to deliver at
scale following a successful and extensive customer on-boarding process.
Gross profit in the period increased by 21% to £6.03m (H1 2024: £4.99m) with
gross margin largely unchanged despite some of the unexpected revenue
attrition previously mentioned. In line with previous periods, we expect gross
margins to improve in the second half of the year as we deliver on our sales
pipeline with a lower cost of investment given current capacity levels.
Underlying EBITDA increased by 25% to £5.74m (H1 2024: £4.61m) with
underlying EBITDA margins slightly ahead of this time last year at 36.3% (H1
2024: 35.6%). Underlying profit before tax is defined as profit before tax
excluding amortisation on acquired intangibles, share-based payments, exchange
rate gains/losses on statement of financial position translation and
exceptional non-recurring costs. This increased by 37% to £1.89m (H1 2024:
£1.38m). Underlying profit before tax margins have increased to 12.0% (H1
2024: 10.6%) largely as a result of stable overhead costs against growing
revenues, further explained later in this report.
Underlying EBITDA, 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 2025 H1 2024 Growth
Revenue £15.79m £12.96m 22%
ACMRR £28.50m £26.60m 7%
Gross profit £6.03m £4.99m 21%
Gross margin 38.2% 38.5%
Underlying EBITDA £5.74m £4.61m 26%
Underlying EBITDA margin 36.3% 35.6%
Underlying profit before tax £1.89m £1.38m 37%
Underlying profit before tax margin 12.0% 10.6%
Statutory profit before tax £0.46m £0.16m 188%
Underlying basic EPS 2.61p 1.95p
*All references to margins are as a percentage of revenue.
Profit before Tax Period ended 31 Dec 2024 Period ended 31 Dec 2023
£000 £000
Profit before tax for the period 461 158
Deduct:
Grant Income (138) (137)
Add back:
Non-recurring costs 81 22
Amortisation of acquired intangibles 65 156
Share-based payments 1,352 1,129
Exchange rate loss on intercompany translation 71 49
Underlying profit for the period 1,892 1,377
Beeks reported a Statutory profit before tax of £0.46m (H1 2024: £0.16m)
with underlying profit before tax increasing to £1.89m (H1 2024: £1.38m).
Cost of sales (excluding amortisation on acquired assets) increased by 23.6%
to £9.89m (H1 2024: £8.00m), largely in line with sales growth under gross
profit margins as referenced earlier. There is always a relatively fixed
direct cost associated with revenue growth resulting in higher data centre
hosting costs and the cost of infrastructure. As is typical in our growth, we
again added capacity across our global data centre estate during the period.
There has been an increase in administrative expenses (excluding share-based
payments and non-recurring costs) when compared to the prior year of 16% to
£4.11m (H1 2024: £3.55m) but administrative costs have remained lower as a
percentage of revenue. This is despite expensing our investment in the staff
and third party consulting costs associated with our Edge Intelligence product
development of which £0.3m has been expensed in the period (H1 2024: 0). In
addition to Edge Intelligence hires we have further strengthened our sales
team with a London based senior sales hire to capitalise on our pipeline, and
further increased our security team. In line with our automation strategy,
engineering and support staff have remained flat. Our headcount as at 31
December 2024 has reduced marginally to 103 from 105 as at 30 June 2024 and
from 105 as at 31 December 2023. This is part of our overarching strategy to
deliver improved margins to shareholders. Staff costs have increased by 15%
(excluding share-based payments and net of capitalisation) to £2.58m in the
period (H1 2024: £2.25m). Gross staff costs as a % of revenue has decreased
from 27% in H1 FY24 to 24% as at H1 FY25.
We have continued to invest in product, in product enhancements to Exchange
Cloud and a new Edge Intelligence product that provides cutting-edge latency
and client experience insights to enhance trading performance. As such,
capitalised development costs in the period were £1.39m (H1 2024: £1.40m).
Most of this cost is internally generated as we use our in-house teams to
develop the bespoke technology. As in prior periods we will continue to fund
this level of investment through operational cash generation.
Taxation
The effective tax rate ('ETR') for the period is 21%, (H1 2024: -27%). There
are some timing reasons for our tax provision being lower than the prevailing
tax rate in the UK of 25%. This is largely due to deductions from the Group's
share scheme.
Earnings per Share and Dividends
Underlying basic earnings per share has increased 47% to 2.61 pence (H1 2024:
1.95 pence). Underlying diluted earnings per share has increased 34% to 2.38
pence (H1 2024: 1.77 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 23%, up to £5.76m (H1 2024: £4.69m).
Expenditure on investing activities was lower than the prior year as we used
capacity of existing stock. We invested £1.25m (H1 2024: £1.65m) in
property, plant and equipment across our infrastructure estate.
Given supply chain lead times have reduced, we have reduced current stock
levels from £1.88m to £1.02m deploying these assets across our data centre
locations for revenue generation. Our existing stock capacity will help reduce
some of H2 2025 investment although some Proximity and Exchange Cloud
deployments can require bespoke infrastructure solutions requiring new
investment.
During the period we have reduced our asset finance borrowings and we had no
requirement to draw down any additional borrowings given our cash generation.
Period end debt is historically low at £0.76m (H1 2024: £1.73m). Cash and
cash equivalents totalled £7.33m at 31 December 2023 (H1 2024: £7.17m). We
had a post period end receipt of £1.19m in early January. Gross debt has
reduced to 0.1x underlying annualised EBITDA (H1 2024: 0.2x). 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 £6.57m (H1 2024:
£5.44m).
At 31 December 2024 net assets were £39.18m compared to net assets of
£34.12m at 31 December 2023 and net assets of £37.50m at 30 June 2024.
Fraser McDonald
CFO
17 March 2025
Beeks Financial Cloud Group PLC
Consolidated statement of comprehensive income
For the period ended 31 December 2024
6 months to 6 months to Year to
Note December 2024 (unaudited) December 2023 (unaudited) June
2024 (audited)
£'000 £'000 £'000
Revenue 3 15,794 12,957 28,487
Other Income 3 191 185 371
Cost of sales (9,957) (8,153) (17,516)
Gross profit 6,028 4,989 11,342
Administrative expenses (5,541) (4,703) (9,759)
Operating profit 4 487 286 1,583
Analysed as:
Earnings before depreciation, amortisation, share based payments and 5,875 4,695 10,940
non-recurring costs
Share based payments 4 (1,352) (1,129) (2,326)
Other non-recurring costs (81) (22) (29)
Depreciation 4 (2,693) (2,373) (5,085)
Amortisation - acquired intangible assets (152) (152) (326)
Amortisation - other intangible assets (1,110) (733) (1,591)
Operating profit 487 286 1,583
Finance income 129 84 250
Finance costs (155) (212) (374)
Profit before taxation for the period 461 158 1,459
Taxation 5 (132) 43 734
Profit after taxation for the period 329 201 2,193
Other comprehensive income
Amounts that may be reclassified to profit and loss
Currency translation differences (2) 4 8
Total comprehensive income for the period 327 205 2,201
Pence Pence Pence
Basic earnings per share 6 0.47 0.12 3.33
Diluted earnings per share 6 0.45 0.12 3.11
Beeks Financial Cloud Group PLC
Consolidated statement of financial position
For the period ended 31 December 2024
December 2024 December 2023 June
2024
restated
(unaudited) (unaudited)
(audited)
Assets Note £'000 £'000 £'000
Non-current assets
Intangible 7 9,474 8,793 9,368
assets
Property, plant and 8 15,268 17,262 16,739
equipment
Deferred tax 6,641 5,410 6,726
Trade and other receivables 5,135 2,424 3,287
Total non-current assets 36,518 33,889 36,120
Current assets
Trade and other receivables 4,910 4,370 4,171
Inventories 941 1,408 1,506
Cash and cash equivalents 7,331 7,169 7,701
Total current assets 13,182 12,947 13,378
Total assets 49,700 46,836 49,498
Liabilities
Non-current liabilities
Trade and other payables 88 283 136
Lease liabilities 10 651 1,269 1,283
Deferred tax 4,196 3,884 4,196
Total non-current liabilities 4,935 5,436 5,615
Current liabilities
Trade and other payables 4,288 4,968 4,777
Lease liabilities 10 1,302 2,068 1,611
Borrowings 10 - 244 -
Total current liabilities 5,590 7,280 6,388
Total liabilities 10,525 12,716 12,003
Net assets 39,175 34,120 37,495
Equity
Issued capital 84 82 83
Share premium 23,775 23,775 23,775
Reserves 6,876 5,896 6,297
Retained earnings 8,440 4,367 7,340
Total equity 39,175 34,120 37,495
Beeks Financial Cloud Group PLC
Consolidated statement of changes in equity
For the period ended 31 December 2024
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 2023 82 70 705 (315) 4,419 23,775 4,050 32,786
Profit after tax for the period - - - - - - 201 201
Currency translation difference
- 4 - - - - - 4
Total comprehensive loss for the period - 4 - - - - 201 205
Share based payments - - - - 1,129 - - 1,129
Exercise of share options - - - - (116) - 116 -
Balance at 31 December 2023 (unaudited) 82 74 705 (315) 5,432 23,775 4,367 34,120
Profit after tax for the period - - - - - - 1,992 1,992
Currency translation difference
- 4 - - - - - 4
Total comprehensive income for the period - - - - - - 1,992 1,996
Issue of share capital 1 - - - - - - 1
Share based payments - - - - 1,197 - - 1,197
Exercise of share options - - - - (800) - 800 -
Deferred tax - - - - - - 181 181
Balance at 30 June 2024 (audited) 83 78 705 (315) 5,829 23,775 7,340 37,495
Balance at 1 July 2024 83 78 705 (315) 5,829 23,775 7,340 37,495
Profit after tax for the period - - - - - - 329 329
Total comprehensive income for the period - - - - - - 329 329
Currency translation difference - (2) - - - - - (2)
Issue of share capital 1 - - - - - - 1
Share based payments - - - - 1,352 - - 1,352
Exercise of share options - - - - (771) - 771 -
Balance at 31 December 2024 (unaudited) 84 76 705 (315) 6,410 23,775 8,440 39,175
Beeks Financial Cloud Group PLC
Consolidated cash flow statement
For the period ended 31 December 2024
6 months to Year to
December 2024 (unaudited) December 2023 (unaudited) June
2024 (audited)
£'000 £'000 £'000
Cash flows from operating activities
Profit before taxation for the period 461 158 1,459
Adjustments for:
Depreciation and amortisation 3,955 3,217 7,002
Share based payment charge 1,352 1,129 2,326
Bank charges - 70 -
Interest payable on bank loans - 59 85
Bank interest received (69) (26) -
Lease liability interest 60 82 163
Operating cash flows before movements in working capital 5,759 4,689 11,035
Increase in trade and other receivables (2,716) (541) (1,343)
Decrease in Inventory 566 359 997
(Decrease)/increase in trade and other payables (509) 468 (171)
Cash generated from operating activities before tax 3,100 4,975 10,518
Corporation tax provision 72 117 33
Net cash generated from operating activities 3,172 5,092 10,551
Cash flows from investing activities
Purchase of property, plant and equipment (1,211) (1,480) (3,882)
Capitalisation of development costs (1,387) (1,404) (2,909)
Net cash used in investing activities (2,598) (2,884) (6,791)
Cash flows from financing activities
Bank charges - (70) -
Repayment of existing bank loans - (1,570) (1,814)
Repayment of lease liabilities (942) (1,116) (2,065)
Interest on lease liabilities (60) (82) (163)
Interest payable on bank loans - (59) (85)
Bank interest received 69 26 -
Proceeds from asset finance - - 229
Net cash generated from financing activities (933) (2,871) (3,898)
Net (decrease)/increase in cash and cash equivalents (359) (663) (138)
Cash and cash equivalents at the beginning of the financial period 7,701 7,829 7,829
Exchange effect on cash and cash equivalents (11) 3 10
Cash and cash equivalents at the end of the financial period 7,331 7,169 7,701
Beeks Financial Cloud Group PLC
Notes to the financial statements
For the period ended 31 December 2024
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 2024.
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 2024 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 2024 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 2025. The group financial statements
for the year ended 30 June 2024 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 2024,
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 £6.58m (H1 2024: net cash £5.44m) 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 to
December 2026, and associated risks, including the potential impact of the
current economic climate. We have run appropriate scenarios applying
reasonable downside sensitivities and are confident we have the resources to
meet our liabilities as they fall due. The budgets and cash flow forecasts
have assumed all loan facilities being repaid in full. We have also run
reverse stress test scenarios in order to identify circumstances where cash
reserves would be depleted. The circumstances that would lead into such
scenarios (such as moving from revenue growth to revenue attrition) are not
considered plausible given the historic track record and trading prospects of
the group.
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. The group does not place reliance on any specific customer and has no
individual customer that generates 33% (H1 2024: 33%) or more of its total
group revenue.
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 31/12/24 Period ended 31/12/23 (£'000) Year ended 30/06/24 (£'000)
(£'000) (Unaudited) (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 11,471 - 11,471 10,674 - 10,674 22,723 - 22,723
Maintenance 421 - 421 199 - 199 388 - 388
Proximity Cloud - 266 266 - 171 171 - 378 378
Exchange cloud - 73 73 - 28 28 - 53 53
Professional services 83 - 83 214 - 214 463 - 463
Over time total 11,975 339 12,314 11,087 199 11,286 23,574 431 24,005
Point in time
Proximity Cloud - 2,694 2,694 - 261 261 - 1,626 1,626
Exchange Cloud 112 112 - 842 842 - 1,417 1,417
Hardware/Software resale 441 - 441 381 - 381 826 - 826
Software licences 143 - 143 143 - 143 456 - 456
Set up fees 35 - 35 44 - 44 100 - 100
Software other 55 - 55 - - - 57 - 57
Point in time total 674 2,806 3,480 568 1,103 1,671 1,439 3,043 4,482
Total revenue 12,649 3,145 15,794 11,655 1,302 12,957 25,013 3,474 28,487
6 months to Year to
December 2024 (unaudited) December 2023 (unaudited) June
2024 (audited)
£'000 £'000 £'000
Revenues by geographic location are as follows:
United Kingdom 6,410 3,458 7,140
Europe 1,127 1,570 2,861
US 6,003 4,771 11,140
Rest of World 2,254 3,158 7,346
Total 15,794 12,957 28,487
During the period, £138k (H1 2024: £137k) was recognised in other income for
grant income received from Scottish Enterprise and £53k (H1 2024: £48k) was
recognised as rental income.
Note 4. Operating profit
6 months to Year to
December 2024 (unaudited) December 2023 (unaudited) June
2024 (audited)
£'000 £'000 £'000
Operating profit is stated after charging:
Depreciation on owned assets 2,051 1,670 3,789
Staff costs 3,736 3,530 7,198
Depreciation of right-of-use asset 642 703 1,296
Amortisation of intangibles 1,262 875 1,917
Currency translation (gain) / loss (24) 4 38
Other cost of sales * 6,126 4,923 10,710
Share based payments 1,352 1,129 2,326
* 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 2024 (unaudited) December 2023 (unaudited) June
2024 (audited)
£'000 £'000 £'000
Current Tax
R&D tax credit received - (121) (121)
Foreign tax on overseas companies 47 90 222
Total current tax charge/(credit) 47 (31) 101
Deferred tax
Origination and reversal of temporary differences 85 (12) (835)
Total deferred tax charge / (credit) 85 (12) (835)
Total tax charge/(credit) 132 (43) (734)
The effective tax rate for the six months to 31 December 2024, based on the
taxation credit for the period as a percentage of the profit before tax is 21%
(H1 2024: (27%)).
Note 6. Earnings per share
As at 31 December 2024, the company had 67,053,738 shares (H1 2024:
65,709,158).
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 December 2023 (unaudited) June
2024 (audited)
2024
(unaudited)
£'000 £'000 £'000
Profit after taxation attributable to the owners of Beeks Financial Cloud 329 201 2,193
Group PLC
Pence Pence Pence*
Basic earnings per share 0.47 0.12 0.12 3.33
Diluted earnings per 0.45 3.11
share
Weighted average number of ordinary shares used in calculated basic earnings 66,687,309 65,610,356 65,905,797
per share
Dilutive impact of share options 3,484,034 4,736,830 4,023,763
Adjustments for calculation of diluted earnings per share: 224,014 99,551 610,795
Options over ordinary shares
Weighted average number of ordinary shares used in calculated diluted earnings 70,395,357 70,446,737 70,540,354
per share
*The above is calculated on profit after tax excluding the £121k R&D tax
credit received during the period.
6 months to Year to
December 2024 (unaudited) December June
2024 (audited)
2023
(unaudited)
£'000 £'000 £'000
Underlying earnings per share
Underlying profit after taxation attributable to the owners of Beeks Financial 1,742 1,278 4,623
Cloud Group PLC
Pence Pence Pence
Underlying earnings per share - basic 2.61 1.95 7.01
Underlying earnings per share - diluted 2.38 1.77 6.36
Weighted average number of ordinary shares used in calculated basic earnings 66,687,309 65,610,356 65,905,797
per share
Adjustments for calculation of diluted earnings per share: 3,708,048 4,836,380 6,782,876
Options over ordinary shares
Weighted average number of ordinary shares used in calculated diluted earnings 70,395,357 70,446,736 72,688,673
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
relationships Costs Trade name/IP addresses Goodwill Total
£000 £000 £000 £000 £000
Cost
As at 1 July 2023 2,501 8,869 137 2,336 13,843
Additions - 1,333 103 - 1,436
Foreign exchange movements
(11) - - - (11)
As at 31 Dec 2023 2,490 10,202 240 2,336 15,268
Additions - 1,463 1 - 1,464
Foreign exchange movements
9 - - - 9
As at 30 June 2024 2,499 11,665 241 2,336 16,741
Additions - 1,233 - - 1,233
Foreign exchange movements
18 - - - 18
As at 31 Dec 2024 2,517 12,898 241 2,336 17,992
Accumulated Amortisation
Balance at 1 July 2023 (1,474) (3,207) (88) (968) (5,737)
Charge for the period (138) (733) (14) - (885)
Foreign exchange movements 9
9 - - -
Grant funding - 138 - - 138
As at 31 Dec 2023 (1,603) (3,802) (102) (968) (6,475)
Charge for the period (151) (1,170) (13) - (1,334)
Foreign exchange movements
22 - - - 22
Grant income release - 414 - - 414
As at 30 June 2024 (1,732) (4,558) (115) (968) (7,373)
Charge for the period (139) (1,110) (14) - (1,263)
Foreign exchange movements
(19) - - - (19)
Grant funding - 137 - - 137
As at 31 Dec 2024 (1,890) (5,531) (129) (968) (8,518)
N.B.V. 31 Dec 2024 627 7,367 112 1,368 9,474
N.B.V. 30 June 2024 767 7,107 126 1,368 9,368
N.B.V. 31 Dec 2023 887 6,401 138 1,368 8,793
Note 8. Non-current assets - Property, plant and equipment
Office equipment and fixtures and fittings
Computer Equipment Freehold property
Right of Use Total
Cost £'000 £'000 £'000 £'000 £'000
As at 1 July 2023 20,490 326 7,741 3,039 31,596
Additions 1,922 28 335 1 2,286
Disposals (12) - (608) - (620)
Exchange adjustments - - (15) - (15)
As at 31 December 2023 22,400 354 7,453 3,040 33,247
Additions 1,628 40 615 - 2,283
Transfer to stock (163) - 13 - (150)
Exchange adjustments (3) - (43) - (46)
As at 30 June 2024 23,862 394 8,038 3,040 35,334
Additions 1,057 79 120 1 1,257
Transfer to stock - - (46) - (46)
Exchange adjustments 36 - - - 36
As at 31 December 2024 24,955 473 8,112 3,041 36,581
Depreciation
As at 1 July 2023 (9,828) (97) (3,620) (98) (13,643)
Charge for the year (1,619) (16) (703) (35) (2,373)
Exchange adjustments - - 31 - 31
As at 31 December 2023 (11,447) (113) (4,292) (133) (15,985)
Charge for the year (1,816) (47) (813) (36) (2,712)
Transfer to stock 78 - - - 78
Exchange adjustments 6 - 18 - 24
As at 30 June 2024 (13,179) (160) (5,087) (169) (18,595)
Charge for the year (1,748) (49) (860) (36) (2,693)
Exchange adjustments (25) (25)
As at 31 December 2024 (14,952) (209) (5,947) (205) (21,313)
As at 31 December 2024 10,003 264 2,165 2,836 15,268
As at 30 June 2024 10,683 234 2,951 2,871 16,739
As at 31 December 2023 10,953 241 3,161 2,907 17,262
Of the total additions in the period of £1.3m, £0.1m (H1 2024: £0.1m)
relates to right-of-use assets held under IFRS16, which have a carrying value
of £2.2m (H1 2024: £1.7m).
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 2023 7,829 (1,814) (4,007) 2,008
Cash and cash equivalents cash outflow (660) - - (660)
Lease additions (100) (100)
Proceeds from new leases under asset financing - - (229) (229)
Repayment of loans - 1,570 - 1,570
Lease repayments - - 997 997
At 31 December 2023 7,169 (244) (3,339) 3,586
Cash and cash equivalents cash outflow 532 - - 532
Repayment of bank loans - 244 - 244
Lease additions - - (630) (630)
Lease repayments - - 1,075 1,075
At 30 June 2024 7,701 - (2,894) 4,807
Cash and cash equivalents cash outflow (370) - - (370)
Lease additions - - (120) (120)
Proceeds from new leases under asset financing - -
Lease repayments - - 1,062 1,062
At 31 December 2024 7,331 - (1,952) 5,379
Included within lease liabilities in the year is an addition is £0.1m of
leases held under IFRS16 as right of use liabilities. The carrying value of
brought forward asset financed leases at the period end is £0.76m (H1 2024:
£1.49m)
Note 10. Borrowings
31-Dec-24 31-Dec-23 30-Jun-24
£000 £000 £000
Current:
Right of Use Lease liabilities 684 2,068 880
Asset financing lease liabilities 618 - 731
Bank loans - 244
Total current borrowings 1,302 2,312 1,611
Non-current:
Right of Use Lease liabilities 510 1,269 890
Asset financing lease liabilities 141 - 393
Total non-current borrowings 651 1,269 1,283
Total borrowings 1,953 3,581 2,894
Note 11. Prior Period Adjustment
During the year, it was identified that the ageing of current and non-current
contract assets and contract liabilities was not accurately disclosed within
the prior year consolidated statement of financial position and respective
notes. This error has been corrected within the correct ageing profiles
restated in the figures for 2023 and the total impact on the consolidated
statement of financial position is shown below:
Restated 2023
£000
Increase in non-current assets 2,424
Decrease in current assets (2,424)
Impact on total assets -
Increase in non-current liabilities 283
Decrease in current liabilities (283)
Impact on total liabilities -
Impact on net current assets 2,141
Impact on net assets -
The above prior year adjustment has a net impact of £nil on net assets. There
is also no resulting impact on the consolidated statement of comprehensive
income and therefore no impact to EPS and diluted EPS.
Note 12. Availability of announcement and Half Yearly Financial Report
Copies of this announcement are available on the Company's website,
www.beeksgroup.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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