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Solid growth

Beeks puts dividends on hold to invest in business

Gordon McArthur: confidence

Beeks Financial Cloud Group, the Glasgow-based cloud computing and connectivity provider for financial markets, intends putting dividends on hold as it diverts cash into the business.

The company is preparing to move to a new head office and potentially double its workforce as revenue is predicted to grow rapidly.

In a statement, chairman Mark Cubitt, said: “For the last few years we have been paying a modest dividend whilst continuing to re-invest in our business.

“Notwithstanding our solid balance sheet, the expected growth and investment into the business over the next few years… 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.

“Therefore, subject to shareholder approval at the forthcoming Annual General Meeting, future dividend distributions are expected to be put on hold.”

Underlying profit before tax increased 13% to £1.61m (2020: £1.43m) on a 24% rise in revenues to £11.62m (2020: £9.36m). EBITDA was £4.1m which was ahead of consensus at £3.9m.

Over the year headcount increased to 80 from 65 in June 2020, primarily in revenue generating areas such as sales and marketing and product development.

In a trading update the board said it 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.

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Shares in the company closed 18.5p or 10.85% higher at 189p after touching an intra-day year high of 194.5p.

Gordon McArthur, CEO of Beeks Financial Cloud commented: “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.”

‘We can afford to be smug’

Speaking to Daily Business, Mr McArthur said the company had defied fund managers who had said it was too small to float.

“So we can be a little bit smug,” said Mr McArthur, who expects the growth to organic rather than by buying customers.

“We are still relatively small but we want to scale to mid-size and to do that by focusing on margins. We don’t want to become a tech firm that grows revenue at the cost of making money.”

On the back of today’s figures, analysts at Canaccord Genuity forecast a leap in sales from £11.6m this year to 16.8m in 2022 and £20.5m in the following 12 months. It raised its target price on the stock from 150p to 190p.

Mr McArthur added that there was room for growth overseas and in headcount, possibly doubling to 200.

The firm is relocating towards the end of Q1 from its Hillington base, where it is facing £2m in rent payments over ten years, to a new 30,000 sq ft head office in nearby Braehead – three times larger than its current premises – which the company has acquired.

Commenting on the decision to halt dividend payments, Fraser McDonald, chief financial officer, said it had been suggested by shareholders in order to conserve cash.



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