Shares of Beeks Financial Cloud Group Plc, the Glasgow-based cloud computing and connectivity provider for financial markets, rose about 11% on Monday after it announced results for the year to June 30 showing revenues increased 24% to £11.62 million.
Beeks also published a trading update showing three contract wins in the opening quarter of its current financial year worth $5 million, including the first for its newly launched Proximity Cloud offering.
Beeks said it now anticipates revenues for the year ended June 30, 2022, will be ahead of current market expectations.
Underlying profit before tax increased 13% to £1.61 million in the year to June 30, 2021.
Beeks said institutional revenue represented 91% of total revenue, up from 85%.
The company’s shares have risen about 100% over the past 12 months to give it a current stock market value of around £100 million.
The company said that following consultation with its shareholders during our equity raise in April, it has decided to change its dividend policy which has been in place since its IPO in November 2017.
“Notwithstanding our solid balance sheet, the expected growth and investment into the business over the next few years, driven by Proximity Cloud has led us to take the decision that cash would be better re-invested in the business to compound growth for the benefit of shareholders in the medium term,” said Beeks.
“Therefore subject to shareholder approval at the forthcoming Annual General Meeting, future dividend distributions are expected to be put on hold.”
Beeks Financial Cloud CEO Gordon McArthur said: “The prospects for Beeks have never been more promising.
“The successes with our tier 1 clients means we are now recognised as an established technology provider to financial markets, with a track record and compelling reference clients, providing us with a strong foundation to drive our business forward.
“Having completed the first stages of our product investment, our focus for the year ahead will be on sales execution and delivery for our customers.
“Whilst we continue to assess the ongoing impact of Covid-19 on our business and operations, and the pipeline of opportunities will take time to convert, this pipeline is at a record level which combined with the expansion opportunities within our current customer base gives us confidence in another strong year of growth ahead.”
In the trading update, Beeks Financial said: “The group has continued to successfully deliver against its strategic objectives, achieving record sales in excess of $5 million of total contract value through July, August and September, ahead of board expectations.
“Consequently, the group’s annualised committed monthly recurring revenue has increased to £15.0m (30 June 2021: £13.8m) and the group will recognise an additional £1.3m of revenue from non-recurring product related bookings during the year from signings to date.
“The board now anticipates revenues for the year ended 30 June 2022 will be ahead of current market expectations.
“The additional revenue will be reinvested in the further development of the Proximity Cloud offering, to capitalise on its growing sales pipeline and significant market opportunity.
“The contracts won in the first quarter were a $1.1 million multiyear analytics deal with a Tier 1 Bank for an Asian deployment; the company’s largest contract to date, totalling $2.7 million for a private cloud deployment with a European bank via a partner, with further global roll out in 2022; and a $1 million multiyear deal for its newly launched Proximity Cloud offering, just four weeks after launch, with a substantial pipeline continuing to build.
“The increasing size of deals being secured by Beeks underpins the board’s confidence in the ability of the company to benefit from the growing demand for cloud computing and connectivity from financial services organisations.”
CEO McArthur added: “I am delighted with the levels of trading achieved in the first nine weeks of the year.
“To achieve a record quarter in what is typically our quietest period is testament to the strength and value of our enlarged offering.
“With Proximity Cloud showing considerable early promise, validating the prospects we envisioned, I have every confidence that our new product will spur continued growth.
“The considerable growth in our recurring revenues provides the Board with confidence to accelerate investment in Proximity Cloud, to capitalise on our growing sales pipeline and the significant market opportunity we see for the offering in the medium term.”