Beeks Financial Cloud posts 46% Y/Y increase in revenues in H1 FY22
Beeks Financial Cloud Group PLC (LON:BKS), a cloud computing and connectivity provider for the financial markets, today reported its unaudited results for the six months ended 31 December 2021.
Revenue in the period grew by 46% to £7.72 million (H1 2021: £5.29m), resulting in an increase in underlying EBITDA of 41% to £2.43 million (H1 2021: £1.72m). Beeks has 89% recurring revenue, and customer retention remained within target.
Operating margins have reduced in the period, in line with the Board’s expectations, given the level of investment into product and capacity. Beeks expects these to increase in the second half of the year as it deliver on the contracts recently signed.
As a result of interest in Proximity Cloud from top global exchanges, a new iteration of Proximity Cloud named Exchange Cloud will launch in H2 .
While Proximity Cloud is a single-user solution, Exchange Cloud has evolved in response to an identified need from global exchanges for a secure, multi-client cloud environment. Specifically targeted at global exchanges and Electronic Communication Networks (ECNs), Exchange Cloud is a multi-homed private cloud environment where clients can offer both end user cloud compute to their own customers as well as maintain space for their own internal use, if required.
Underlying gross profit in the period, which is calculated by deducting amortisation on acquired assets and grant income increased by 21% to £3.14 million (H1 2021: £2.59m) with gross margin down at 41% (H1 2021: 49%), in line with expectations.
Underlying EBITDA increased by 41% to £2.43 million (H1 2021: £1.72m) with underlying EBITDA margins at 31% (H1 2021: 33%).
Beeks achieved a reported loss before tax of £0.27 million (H1 2021: profit of £0.50m) with underlying profit before tax decreasing to £0.45 million (H1 2021: £0.55m) following increased investment into the business.
Cost of sales (excluding amortisation on acquired assets) increased by 71% to £4.62m (H1 2021: £2.70m, largely driven by both an increase of depreciation of £0.60m on Beeks’ larger infrastructure asset base and an increase of the direct cost of sales across our global data centre sites. This is as a result of further capacity increases across Beeks’ 22 data centres during the period.
Reflecting Beeks’ strategic investments in the business to support future growth, underlying earnings per share has decreased to 0.90 pence (H1 2021: 0.94 pence). Underlying diluted earnings per share has decreased to 0.85 pence (H1 2021: 0.89 pence).
Following shareholder consultation over the course of last year Beeks decided to stop paying dividends in the medium term, given its investment profile. This was subsequently approved by shareholders at the AGM in December 2021.