Beeks shares soar 30% amid contract wins

Shares of Beeks Financial Cloud Group plc, the Glasgow-based cloud computing and connectivity provider for financial markets, rose as much as 30% after it announced new contract wins and “a period of continued positive trading momentum” in the six months to December 31, 2023.

Beeks shares rose to around £1.40 to give the firm a current stock market value of more than £90 million.

Beeks Financial Cloud announced the signing of a $2.3 million, multi-year expansion contract for its Proximity Cloud offering and a new win for its Exchange Cloud offering.

The firm said that having won a number of competitive tenders in H1 FY24, the company now expects trading in FY25 to be significantly ahead of previous board expectations for FY25.

On the $2.3 million Proximity Cloud expansion contract, Beeks said: “Following the successful deployment of an initial contract with a Tier 1 investment manager, signed in November 2023 for Proximity Cloud, Beeks’ fully configured and pre-installed physical trading environment, a new contract has been awarded for additional locations.

“The latest win more than doubles the initial contract’s value to $3.6 million in aggregate over a four year period.

“The company anticipates considerable further expansion with the customer, with only approximately 30% of the customer’s trading infrastructure currently migrating to Proximity Cloud, demonstrating the strong growth potential for the offering.”

On the new win for its Exchange Cloud offering, the firm said: “The company is also delighted to announce the signing of a conditional contract with one of the largest exchange groups globally for its Exchange Cloud offering, a multi-home, fully configured and pre-installed physical trading environment fully optimised for global exchanges to offer cloud solutions to their end users.

“The deal marks the initial phase of an intended multi-year partnership between Beeks and the exchange, and completion of the contract is subject to regulatory approval, following which deployment of services and recognition of revenue will commence.

“This is the third major international exchange to sign up to the Exchange Cloud offering, demonstrating the significant potential for the offering. Beeks continues to see a building pipeline of opportunities across its Exchange Cloud offering.”

On its trading update, Beeks said: “Trading in H1 FY24 has been in line with board expectations, with revenue growth of over 25% versus H1 FY23, combined with improved margins.

“In line with strategy, Beeks has achieved a positive free cash flow position in the period, with unaudited net cash increasing to £5.5m at 31 December 2023 (June 2023 net cash of £4.4m).

“The board continues to be confident in achieving results for FY24 in line with its expectations. Having won a number of competitive tenders in recent months for projects commencing in the upcoming reporting period and excluding any contribution from the conditional Exchange Cloud contract, the company now expects trading in FY25 to be significantly ahead of previous board expectations.”

Beeks Financial Cloud CEO Gordon McArthur said: “We continue to progress with the execution of our land and expand strategy, quickly demonstrating the value of our offerings, as evidenced by the significant Proximity Cloud expansion contract announced this morning and the winning of a third major global exchange customer for our Exchange Cloud offering.

“We see considerable expansion potential across our customers, as they migrate increasing proportions of their trading infrastructure to the cloud.

“The delivery of free cash flow was a key objective for the current year and we are pleased to have achieved that to plan, as we capitalise on the investments we have made into the expansion of our product offering.

“Our growing contract momentum demonstrates the considerable appetite we see across the financial markets, and we now anticipate FY25 will be significantly ahead of our previous expectations.”