Beeks Financial Cloud registers rise in earnings in H1 FY2020

Maria Nikolova

Gross profit for the six months to end-December 2019 increased 25% to £2.12 million.

Cloud computing and connectivity provider for financial markets Beeks Financial Cloud Group PLC (LON:BKS) has earlier today posted its unaudited results for the six months ended December 31, 2019 (H1 2020), with the figures revealing a rise in profits and revenues.

In the six months to end-December 2019, Group revenues grew by 23% from a year earlier to £4.29 million (H1 2019: £3.50m), supported mainly by continued organic growth with the now embedded CNS business contributing approximately 8% of the Group’s total revenue in the period.

Gross profit for the period amounted to £2.12 million, up 25% from the £1.70 million results registered a year earlier. Gross margin was flat at 49%. It has benefitted by the change in depreciation useful life estimate of computer equipment which resulted in a reduction of depreciation in the period of £0.15 million.

In line with Beeks’ 12-month target, both London InterXion and the original Singapore site are now at break-even level following their launch last year. As with prior years, the Group expects gross margins to increase in the second half of the year, with revenue growth utilising existing capacity without the need for significant additional operating expenditure increase.

Earnings before interest, tax, depreciation, amortisation and exceptional costs (“Underlying EBITDA”) increased by 66% to £1.56 million, with underlying EBITDA margins increasing to 36%.

Reported profit before tax increased to £0.39 million (H1 2019: £0.34m) with underlying profit before tax increasing to £0.60 million (H1 2019: £0.41m).

Cost of sales amounted to £2.17 million in H1 2020, up 20% from a year earlier, largely due to further investment across Beeks’ data centres to expand capacity in both London and New York and to further support geographical expansion.

There has been an increase in Administrative expenses (excluding share based payments, acquisition and non-recurring costs) of 11% to £1.41 million mostly due to an increase in staff.

Finance costs are higher, but in line with expectations at £0.18 million reflecting the £1m debt facility to support the CNS acquisition. No further debt has been taken during the first six months of the year as growth has been financed by existing cash reserves and historic lease finance has been repaid.

Underlying earnings per share has increased to 1.01 pence in the six months to end-December 2019 (H1 2019: 0.96 pence). Underlying diluted earnings per share has increased to 0.98 pence (H1 2019: 0.95 pence).

Maintaining its dividend policy, Beeks will pay an interim dividend of 0.20 pence per share (H1 2019: 0.20 pence) on April 1, 2020 to shareholders on the register on March 13, 2020, with an ex-dividend date of March 12, 2020. This dividend represents a pay-out ratio of 21% of the underlying diluted earnings per share for the interim period.

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