REG - Beeks Fin Cloud Grp - Interim Results
RNS Number : 8243A Beeks Financial Cloud Group PLC 17 March 2025 .Beeks Financial Cloud Group plc("Beeks" or the "Company")Interim Results17th March 2025 - Beeks Financial Cloud Group Plc (AIM: BKS), 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 liabilitiesOperational 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 CloudOutlook· 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 valueStatutory EquivalentsThe 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 plcvia AlmaGordon McArthur, CEOFraser McDonald, CFOCanaccord Genuity+44 (0)20 7523 8000Adam James / George GraingerAlma Strategic Communications+44(0)20 3405 0205Caroline Forde / Joe Pederzolli / Emma ThompsonAbout 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 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.comChief 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 PerformanceRevenue 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 ExpansionWe 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 RoadmapInnovation 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.CustomersBeeks 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 contractsWhilst 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 OutlookThe 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 McArthurCEO17 March 2025 Chief Financial Officer's Review:Financial ReviewWe 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 ProximityDuring 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 reviewH1 2025H1 2024GrowthRevenue£15.79m£12.96m22%ACMRR£28.50m£26.60m7%Gross profit£6.03m£4.99m21%Gross margin38.2%38.5%Underlying EBITDA£5.74m£4.61m26%Underlying EBITDA margin36.3%35.6%Underlying profit before taxUnderlying profit before tax margin£1.89m12.0%£1.38m10.6%37%Statutory profit before taxUnderlying basic EPS£0.46m2.61p£0.16m1.95p188%*All references to margins are as a percentage of revenue. Profit before TaxPeriod ended 31 Dec 2024£000Period ended 31 Dec 2023£000Profit before tax for the period461158Deduct:Grant Income(138)(137)Add back:Non-recurring costs8122Amortisation of acquired intangibles65156Share-based payments1,3521,129Exchange rate loss on intercompany translation7149Underlying profit for the period1,8921,377Beeks 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.TaxationThe 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 DividendsUnderlying 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 FlowsThe 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 McDonaldCFO17 March 2025Beeks Financial Cloud Group PLCConsolidated statement of comprehensive incomeFor the period ended 31 December 2024 6 months to 6 months toYear toNoteDecember 2024 (unaudited)December 2023 (unaudited)June 2024 (audited)£'000£'000£'000Revenue315,79412,957 28,487Other Income3191185371Cost of sales(9,957)(8,153)(17,516)Gross profit6,0284,98911,342Administrative expenses(5,541)(4,703)(9,759)Operating profit44872861,583 Analysed as:Earnings before depreciation, amortisation, share based payments and non-recurring costs5,8754,69510,940Share based paymentsOther non-recurring costs4(1,352)(81)(1,129)(22)(2,326)(29)DepreciationAmortisation - acquired intangible assetsAmortisation - other intangible assets4(2,693)(152)(1,110)(2,373)(152)(733)(5,085)(326)(1,591)Operating profit4872861,583Finance income12984250Finance costs(155)(212)(374)Profit before taxation for the period4611581,459Taxation5(132)43734Profit after taxation for the period3292012,193Other comprehensive incomeAmounts that may be reclassified to profit and lossCurrency translation differences(2)4 8Total comprehensive income for the period3272052,201PencePencePenceBasic earnings per share60.470.123.33Diluted earnings per share60.450.123.11Beeks Financial Cloud Group PLCConsolidated statement of financial positionFor the period ended 31 December 2024December 2024(unaudited)December 2023restated(unaudited)June 2024(audited)AssetsNote£'000£'000£'000Non-current assetsIntangible assets 79,4748,793 9,368Property, plant and equipment 815,26817,26216,739Deferred tax6,6415,4106,726Trade and other receivables5,1352,4243,287Total non-current assets36,51833,889 36,120Current assetsTrade and other receivables4,9104,3704,171Inventories9411,4081,506Cash and cash equivalents7,3317,1697,701Total current assets13,18212,94713,378Total assets49,70046,83649,498LiabilitiesNon-current liabilitiesTrade and other payables88283136Lease liabilities106511,2691,283Deferred tax4,1963,8844,196Total non-current liabilities4,9355,4365,615Current liabilitiesTrade and other payables4,2884,9684,777Lease liabilities101,3022,0681,611Borrowings10-244-Total current liabilities5,5907,2806,388Total liabilities10,52512,71612,003Net assets39,17534,12037,495EquityIssued capital8482 83Share premium23,77523,77523,775Reserves6,8765,8966,297Retained earnings8,4404,3677,340Total equity39,17534,12037,495Beeks Financial Cloud Group PLCConsolidated statement of changes in equityFor the period ended 31 December 2024Issued capitalForeign currencyretranslation reserveMerger reserveOther reserveShare based payment reserveShare premiumRetained earningsTotal equity£'000£'000£'000£'000£'000£'000£'000£'000Balance at 1 July 20238270705(315)4,41923,7754,05032,786Profit after tax for the period------201201Currency translation difference-4-----4Total comprehensive loss for the period-4----201 205Share based payments----1,129--1,129Exercise of share options----(116)-116-Balance at 31 December 2023 (unaudited)8274705(315)5,43223,7754,36734,120Profit after tax for the period------1,9921,992Currency translation difference-4-----4Total comprehensive income for the period------1,9921,996Issue of share capital1------1Share based payments----1,197--1,197Exercise of share options----(800)-800-Deferred tax------181181Balance at 30 June 2024 (audited)8378705(315)5,82923,7757,34037,495Balance at 1 July 20248378705(315)5,82923,7757,34037,495Profit after tax for the period------329329Total comprehensive income for the period------329 329Currency translation difference-(2)-----(2)Issue of share capital1------1Share based payments----1,352--1,352Exercise of share options----(771)-771-Balance at 31 December 2024 (unaudited)8476705(315)6,41023,7758,44039,175Beeks Financial Cloud Group PLCConsolidated cash flow statementFor the period ended 31 December 20246 months toYear toDecember 2024 (unaudited)December 2023 (unaudited)June 2024 (audited)£'000£'000£'000Cash flows from operating activitiesProfit before taxation for the period4611581,459Adjustments for:Depreciation and amortisation3,9553,217 7,002Share based payment charge1,3521,1292,326Bank charges -70- Interest payable on bank loans-5985Bank interest received(69)(26)-Lease liability interest6082163Operating cash flows before movements in working capital5,7594,68911,035Increase in trade and other receivables(2,716)(541)(1,343)Decrease in Inventory566359997(Decrease)/increase in trade and other payables(509) 468(171)Cash generated from operating activities before tax3,1004,97510,518Corporation tax provision7211733Net cash generated from operating activities3,1725,09210,551Cash flows from investing activitiesPurchase 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 activitiesBank 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 received6926-Proceeds from asset finance--229Net 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 7,7017,829 7,829 Exchange effect on cash and cash equivalents(11) 3 10Cash and cash equivalents at the end of the financial period7,3317,1697,701Beeks Financial Cloud Group PLCNotes to the financial statementsFor the period ended 31 December 2024Note 1. General informationThe 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 officeRiverside Building2 Kings Inch WayUnit ARiversideBraeheadPA4 8YUNote 2. Basis of preparationThe 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 ConcernThe 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 SegmentsIdentification of reportable operating segmentsOperating 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 (£'000) (Unaudited)Period ended 31/12/23 (£'000)(Unaudited)Year ended 30/06/24 (£'000)(Audited)Public/Private CloudProximity /Exchange CloudTotalPublic/Private CloudProximity /Exchange CloudTotalPublic/Private CloudProximity /Exchange CloudTotalOver timeInfrastructure/software as a service 11,471-11,47110,674- 10,67422,723 - 22,723Maintenance 421-421199- 199388- 388Proximity Cloud - 266266 -171171 -378378Exchange cloud -7373-2828 -5353Professional services 83-83214- 214463 - 463Over time total11,97533912,31411,08719911,28623,57443124,005Point in timeProximity Cloud-2,6942,694-261261-1,6261,626Exchange Cloud112112-842842-1,4171,417Hardware/Software resale441-441381-381826- 826Software licences143-143143-143456- 456Set up fees 35 -35 44-44100- 100Software other 55 -55---57-57Point in time total6742,8063,4805681,1031,6711,4393,0434,482Total revenue12,6493,14515,79411,6551,30212,95725,0133,47428,4876 months toYear toDecember 2024 (unaudited)December 2023 (unaudited)June 2024 (audited)£'000£'000£'000Revenues by geographic location are as follows:United Kingdom6,4103,4587,140Europe1,1271,5702,861US6,0034,77111,140Rest of World2,2543,1587,346Total15,79412,95728,487During 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 profit6 months toYear toDecember 2024 (unaudited)December 2023 (unaudited) June 2024 (audited)£'000£'000£'000Operating profit is stated after charging:Depreciation on owned assets2,0511,6703,789Staff costs3,7363,5307,198Depreciation of right-of-use asset6427031,296Amortisation of intangibles1,2628751,917Currency translation (gain) / loss(24)438Other cost of sales *6,1264,92310,710Share based payments1,3521,1292,326* 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. Taxation6 months toYear toDecember 2024 (unaudited)December 2023 (unaudited)June 2024 (audited)£'000£'000£'000Current TaxR&D tax credit received -(121)(121)Foreign tax on overseas companies 4790222Total current tax charge/(credit) 47 (31) 101Deferred taxOrigination and reversal of temporary differences85(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 shareAs 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 toYear toDecember 2024(unaudited)December 2023 (unaudited)June 2024 (audited)£'000£'000£'000Profit after taxation attributable to the owners of Beeks Financial Cloud Group PLC3292012,193Basic earnings per shareDiluted earnings per share Pence 0.47 0.45 Pence 0.12 0.12Pence*3.333.11Weighted average number of ordinary shares used in calculated basic earnings per share66,687,30965,610,35665,905,797Dilutive impact of share options3,484,0344,736,8304,023,763Adjustments for calculation of diluted earnings per share:Options over ordinary shares224,01499,551610,795Weighted average number of ordinary shares used in calculated diluted earnings per share70,395,35770,446,73770,540,354*The above is calculated on profit after tax excluding the £121k R&D tax credit received during the period.6 months toYear toDecember 2024 (unaudited)December2023 (unaudited)June 2024 (audited)Underlying earnings per share £'000£'000£'000Underlying profit after taxation attributable to the owners of Beeks Financial Cloud Group PLC1,7421,2784,623Underlying earnings per share - basicUnderlying earnings per share - dilutedPence 2.61 2.38Pence 1.95 1.77Pence7.016.36Weighted average number of ordinary shares used in calculated basic earnings per share66,687,30965,610,35665,905,797Adjustments for calculation of diluted earnings per share:Options over ordinary shares3,708,0484,836,3806,782,876Weighted average number of ordinary shares used in calculated diluted earnings per share70,395,35770,446,73672,688,673Included 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 AssetsAcquired CustomerDevelopmentrelationshipsCostsTrade name/IP addressesGoodwillTotal£000£000£000£000£000CostAs at 1 July 20232,5018,8691372,33613,843Additions-1,333103-1,436Foreign exchange movements(11)-- -(11)As at 31 Dec 20232,49010,2022402,33615,268Additions-1,4631-1,464Foreign exchange movements9---9As at 30 June 20242,49911,6652412,33616,741Additions-1,233--1,233Foreign exchange movements18---18As at 31 Dec 20242,51712,8982412,33617,992Accumulated AmortisationBalance at 1 July 2023(1,474)(3,207)(88) (968)(5,737)Charge for the period(138)(733)(14)-(885)Foreign exchange movements9---9Grant funding-138--138As at 31 Dec 2023(1,603)(3,802)(102)(968)(6,475)Charge for the period(151)(1,170)(13)-(1,334)Foreign exchange movements22---22Grant income release-414--414As 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--137As at 31 Dec 2024(1,890)(5,531)(129)(968)(8,518)N.B.V. 31 Dec 20246277,3671121,3689,474N.B.V. 30 June 20247677,1071261,3689,368N.B.V. 31 Dec 2023887 6,4011381,368 8,793Note 8. Non-current assets - Property, plant and equipmentComputer EquipmentOffice equipment and fixtures and fittingsRight of UseFreehold propertyTotalCost£'000£'000£'000£'000£'000As at 1 July 202320,4903267,7413,03931,596Additions1,9222833512,286Disposals(12)-(608)-(620)Exchange adjustments--(15)-(15)As at 31 December 202322,4003547,4533,04033,247Additions1,62840615-2,283Transfer to stock(163)-13-(150)Exchange adjustments(3)-(43)-(46)As at 30 June 202423,8623948,0383,04035,334Additions1,0577912011,257Transfer to stock --(46)-(46)Exchange adjustments 36---36As at 31 December 202424,9554738,1123,04136,581DepreciationAs 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--31-31As 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 stock78---78Exchange adjustments6-18-24As 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 202410,0032642,1652,83615,268As at 30 June 202410,6832342,9512,87116,739As at 31 December 202310,9532413,1612,90717,262Of 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 debtCash and cash equivalentsBank loansLease liabilitiesTotal net debt£000£000£000£000At 30 June 2023 7,829 (1,814)(4,007) 2,008Cash 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- 1,570Lease repayments - - 997 997At 31 December 2023 7,169 (244) (3,339) 3,586Cash and cash equivalents cash outflow 532 - - 532Repayment of bank loans - 244 - 244Lease additions - - (630) (630)Lease repayments - - 1,075 1,075At 30 June 2024 7,701 -(2,894) 4,807Cash and cash equivalents cash outflow(370) - - (370)Lease additions - -(120) (120)Proceeds from new leases under asset financing--Lease repayments - - 1,062 1,062At 31 December 20247,331- (1,952)5,379Included 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. Borrowings31-Dec-2431-Dec-2330-Jun-24£000£000£000Current:Right of Use Lease liabilities 684 2,068 880Asset financing lease liabilities 618 - 731Bank loans - 244Total current borrowings 1,302 2,312 1,611Non-current:Right of Use Lease liabilities 510 1,269 890Asset financing lease liabilities 141 - 393Total non-current borrowings 651 1,269 1,283Total borrowings 1,953 3,581 2,894Note 11. Prior Period AdjustmentDuring 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 assets2,424Decrease in current assets(2,424)Impact on total assets-Increase in non-current liabilities283Decrease in current liabilities(283)Impact on total liabilities-Impact on net current assets2,141Impact 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 ReportCopies 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.This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy. END IR FLFSTVTISLIE