Beeks Financial Cloud Share Discussion Threads

[sharesoc] 30/4/2018 13:04

The Beeks Financial Cloud presentation and stockopedia report from our seminar in London on the 18th April can be found in our members area here:

[glasshalfull] 26/4/2018 22:39

I’ll second that. Gordon McArthur, CEO, very impressive at Mello 2018 in Derby.

Room packed...no seats or standing room, with a number of investors lining the corridor to hear. Tweeted photo.

Importantly spoke to a number of investors that now have a better understanding of the service Beeks provide...reflected in the afternoon share buying IMHO.

Kind regards
GHF

[glaws2] 26/4/2018 20:16

Bert impressive presentation at Mello

[greenroom78] 17/4/2018 07:35

RNS not showing on ADVFN...

Glasgow, [April 17], 2018 -- Beeks Financial Cloud Group Plc, a cloud computing and connectivity provider for financial markets, is pleased to announce entry into the Equities automated trading market by adding connectivity to IEX, the New York based U.S. stock exchange.



Beeks is now an approved extranet service provider for the Exchange's market data. Connectivity within the NY4 datacentre will allow Beeks' clients to source and trade U.S. Equities data, meaning Beeks can now supply Infrastructure as a Service (IaaS) and connectivity in all three of the key financial asset classes: forex, futures and equities.



Founded in 2012, IEX introduced its first trading venue in 2013 and launched as a U.S. stock exchange in 2016. IEX does not charge for market data or connectivity.



Gordon McArthur, CEO of Beeks Financial Cloud, commented, "Having established Beeks as a leading Infrastructure-as-a-service and connectivity provider to the Financial Markets, we are delighted to now be able to expand into the equities market through this agreement with IEX. The equities market represents a significant growth opportunity for Beeks and builds on our recent entry into Fixed Income and cryptocurrencies. We will continue to seek ways to expand our offering and better facilitate our clients."

[sharesoc] 04/4/2018 12:07

Beeks Financial present at our growth company seminar in London on the 18th April. More details and registration here:

[sharesoc] 27/3/2018 15:04

Beeks Financial Cloud present at our upcoming growth company seminar on the 18th April which may be of interest to potential investors and current shareholders:

[martywidget] 22/3/2018 07:32

Coverage yesterday also on Bloomberg website:

Eddie Murphy-Inspired Fintech Firm Signs With Winklevoss Crypto Exchange
By Joe Easton
21 March 2018, 12:36 GMT
From


`Trading Places' Inspired It, Now the Winklevoss Twins Beckon It
Joe Easton
22 March 2018, 6:23 AM
21 March 2018, 12:36 PM

[martywidget] 21/3/2018 10:35

And also given a mention here:

Wednesday 21 March 2018
Beeks gets all Crypto…..


SMALL CAP SPOTLIGHT: Bitcoin back in focus as Beeks Financial ties up with Winklevoss twins’ crypto exchange


{edit - Beeks enters cryptocurrency market with billionaire Winklevoss twins}

[martywidget] 21/3/2018 10:34

Aim-listed trading company Beeks Financial Cloud has just announced a tie-up with the Winklevoss twins
A tiny technology company listed on London's junior market has just announced a tie-up with internet entrepreneurs and bitcoin billionaires the Winklevoss twins.

Beeks Financial Cloud, which floated on Aim last November and has a current market value of around £32m, has announced a partnership with the Cameron and Tyler Winklevoss's Gemini cryptocurrency exchange.

[masurenguy] 21/3/2018 08:06

Beeks Financial Cloud Launches Crypto Connect Offering with Gemini Connectivity

Glasgow, March 21, 2018 -- Beeks Financial Cloud Group Plc, a cloud computing and connectivity provider for financial markets, is pleased to announce entry into the cryptocurrency market via a collaboration with Gemini Trust Company, LLC ("Gemini"), a next-generation digital asset exchange and custodian. Gemini is a licensed digital asset exchange and custodian built for both individuals and institutions. As a New York trust company regulated by the New York State Department of Financial Services (NYSDFS), Gemini is a fiduciary and is therefore subject to the capital reserve requirements, cybersecurity requirements, and banking compliance standards set forth by the NYSDFS and the New York Banking Law (NYBL).

The Beeks Cloud has nine data centres globally, providing low-latency infrastructure and connectivity for institutional capital markets. Via this new collaboration, Beeks can provide direct connectivity to Gemini via the Beeks Cloud, allowing Beeks' clients who are existing clients of Gemini to source and trade Bitcoin and Ethereum legitimately and securely.

Bitcoin and Ethereum are currently the two largest digital currencies in the world. Both Ethereum and Bitcoin are decentralised payment networks, with their own cryptographic currency, that allow anonymous payments to be sent across the internet without the need for a bank or other third party. Coded transactions are stored in a decentralised ledger, the blockchain, and are visible for everyone on the network to see. The direct connection will be available as part of a Beeks Crypto Connect package via the Beeks Marketplace, including a dedicated server and cross-connect within the NY4 datacentre. The launch is part of the on-going expansion of the Beeks offering, which now covers the Forex, Futures, Fixed income and Cryptocurrency markets.

Gordon McArthur, CEO of Beeks Financial Cloud, commented, "Cryptocurrency trading is growing in popularity and this is a service our institutional clients have been wanting for some time, as they seek a means to trade cryptocurrencies legitimately and securely. The high level of regulation on the Gemini Exchange provides our customers with an assurance of greater security in a volatile market. In a highly significant industry, this new service has the potential to be a valuable move for Beeks as we seek to expand our offering across the key markets for automated trading."

[the vampire] 21/3/2018 08:02

Enters Cryptocurrency field.

[cgequityinvest] 16/3/2018 14:55

GHF - thanks for the update. If i get the chance i will seek to clarify with management in April when they are up in Derby at Mello. As you say its not the most important figure at the moment given the rate of growth but is a useful comparitor with other fast growing companies in the market/my portfolio.

[glasshalfull] 16/3/2018 13:43

Yep, can’t recall seeing this before either. Decided to await results & Annual Report (as mentioned in my short write-up) to review accounting treatment.

Regards
GHF

[cockerhoop] 16/3/2018 12:32

Hi GHF,

I'm not sure I've ever seen a diluted adjusted EPS greater than an adjusted EPS?

Assuming they are the same adjustments? :-)

[glasshalfull] 16/3/2018 11:13

Morning folks,

Just saw the discussion on EPS. The Cenkos EPS figures is, as I previously stated, in respect of diluted adjusted EPS.

I’ve checked the broker note and it doesn’t provide a detailed breakdown, merely stating 4 x EPS figures: -

2018
Basic EPS = 2.0p
Adjusted EPS = 2.0p
Diluted Adj EPS = 3.4p
Diluted Adj EPS (a further one)= 3.4p

2019
Basic EPS = 3.4p
Adjusted EPS = 3.4p
Diluted Adj EPS = 4.9p
Diluted Adj EPS (a further one)= 4.9p

So, take your pick!!!

I’m not too bothered about the EPS figures at this time given that the period under review has been impacted by IPO costs, with my investment decision based on the EBIT margin, monthly run-rate, FCF & market opportunities of the company at this juncture in their public life.

Cenkos have reviewed Beeks using DCF modelling (discounted cash flow) & indicate +32% upside valuation on a zero growth rate (at a share price of 53p at time of their report).

Using a mid range they indicated a market cap of between £45m-£49m versus today’s market cap of £29.7m

Hope this assists.

Kind regards
GHF

[cgequityinvest] 16/3/2018 10:06

Shoe -

Stockopedia are showing "normalised eps" of 2.0p and 3.4p for 18 and 19 respectively.

Sharescope are showing 3.4p for '18 and 4.9p for 2019.

Both are showing the same Profit after tax numbers of 1.0 and 1.7.

Accordingly it must be due to interpretation of eps - i am guessing the higher numbers are adding back some form of amortisation but its strange that they dont have a similar standardised approach!

Access to the brokers note would probably help - can anyone spread any light on the issue?

[shoee62] 15/3/2018 10:02

Stockopedia have the consensus forecasts for EPS for 2018 at 2p per share, and 2019 at 3.4p, Fidessa have the same. Is that correct? I see GHF earlier post saying 3.4p in 2018 from Cenkos..? Thanks

[greenroom78] 15/3/2018 08:51

I've bought in here this morning, although had to use my spread bet account as HSBC hadn't heard of them so therefore couldn't offer it to me (yet). Shame as I'd have bought more than I have currently.

GHF - thanks for the heads up.

[davidosh] 12/3/2018 10:25

As previously mentioned Beeks Financial will have a stand and be presenting at our huge Mello2018 event in Derby on 26th April and all shareholders and potential investors are welcome to attend

BKS have never attended or presented at a Mello event before and we are very pleased to welcome them so this is an ideal opportunity to meet the management and hear about their strategy.

Do come and join us at this quality two day event and there will be at least 65 other companies to meet plus some fabulous keynote speakers.

[glasshalfull] 11/3/2018 16:24

Appreciate the positive comments. Hope it assists further research.

Mas - Yes, at long last a smashing company on my doorstep. How fortunate!

Competition - You are correct in observing that the market is very fragmented.

Appears only a few competitors of note such as Fixnetix, FCM360, FXecosystem, Guavatech & Pico Trading.

Cenkos state,

“Management believes that Beeks is currently the only pure play cloud solutions provider and are unaware of any competitors that have the capacity to deliver the range of self-service solutions that can enable clients to be up and trading within 24 hours.

Beeks data centre rack space, cross connects and security solutions are all available to prospective clients immediately.”

In addition I would add that my research indicates that Beeks various packages are priced extremely competitive to other providers. I’d hazard that others may require to price accordingly to support a higher cost base.

Hope this helps.

Kind regards
GHF

[the vampire] 11/3/2018 14:58

GHF, thanks for your effort.I have recently been building a position here and i am optimistic Beeks will significantly grow.

[yupawiese2010] 11/3/2018 11:21

GHF. - likewise many thanks for your input its much appreciated, especially as I reside overseas & cannot attend company presentations.

[masurenguy] 11/3/2018 10:28

G - thanks very much for your excellent and succinct feedback following your visit to the company. It is much appreciated especially since they are physically less accessible to us Sassenachs located a long way south of the border.

Did you obtain any insight into their competitive environment or is this so fragmented that it really does not appear on their radar?

[glasshalfull] 11/3/2018 08:57

Beeks Financial Cloud

Site visit

I visited Beeks (BKS) Glasgow HQ & also Network Operations Centre (NOC) on Friday (09.03.2018) as it’s located fairly close to me. Ideal opportunity & great timing as it was a fortnight after release of their interims (to 31.12.2017). Should make mention that I thought it impressive that their interims had been released so quickly, only 7-weeks after the period end. Quite a few companies could learn from this.

The visit allowed me to get a better feel for their proposition & development. It also provided me the opportunity to speak with the wider team of employees. Gordon McArthur (CEO) & Simon Goulding (CFO) were extremely hospitable & welcoming, as were the extended team, allowing me to view the main critical trading infrastructure operation in monitoring the impact of the US Non-Farm Payrolls where markets experience a considerable spike each month following release of the numbers. No issues encountered with systems coping admirably. I observed that the demand went up 6/7-fold (to my untrained eye) before normalising.

This is the major market spike event each month & Gordon indicated that this is a predictable event but the NOC team are monitoring from 2200hrs on Sunday evening through to 2200hrs on Friday evening & ensuring access at all times and especially at times of considerable market volatility.

(I’ve placed a couple of snaps on Twitter @glasshalfull1)

Below is a short overview of the company. I don’t plan to prepare a comprehensive one at this time, my preference to wait for release of FY2018 results & their Annual Report later in the year before placing fingers on keyboard.

Irrespective, investors will be pleased to know that Beeks will be attending & presenting at Mello 2018 in Derby so chance for investors to apprise the investment opportunity first hand. I believe the wonderful Tamzin (PI World) may be filming them at Mello, great for investors & prospective investors unable to attend.
I can’t recommend the event highly enough & will be there from the Wednesday evening through to the Friday night.



Background

As previously mentioned my attraction, was drawn to Beeks as they are profitable & exhibit a strong & growing recurring revenue model. They have also signalled that they are looking to establish dividend payments following release of FY2018 results.

Beeks were established in 2011 & their recurring revenue model or Infrastructure as a Service (known as an IaaS model) finds 95% of their customers paying monthly & therefore the company is strongly cash generative & revenue recognition is high.

This model has allowed company to make two acquisitions to date & invest in their infrastructure during 2016 & 2017 to support growth.
They provide a low-latency service for algorithmic or automated trading, providing critical connectivity & server infrastructure for institutional and retail clients. Essentially, this means that they provide over 6,000 retail traders & c.170-180 financial institutions with connectivity for automated trading – FX (80%) & Futures (20%) from 9 data centres around the world.

Algorithmic & automated trading appears a fast growing segment & on speaking with Gordon & Simon, both confirmed there are tens of thousands of financial institutions around the world that could be potential clients. FX and derivatives brokers to hedge funds. Many financial institutions have commenced providing automated trading services to their clients and many utilise automated trading services. In other words, they are only just scratching the surface at the moment.

Beeks came to the market in November 2017 via an IPO at 50p where they raised £3.5m net of expenses. Despite the positive interims released in February the share price is only +10% on the issue price (55.5p). Market cap is £27m & the company had £2.55m net cash at 31.12.2017.

It should also be noted that Major Holders (over 3%) account for 83% of the equity with Gordon McArthur retaining a 61.8% stake.

I would draw anyone interested in the company to their admission document with p7-19 providing an excellent overview of their proposition; the market; why Beeks & competitive landscape.



Results

They released H1 2018 results in February 2018 which confirmed further strong growth & a positive outlook for FY 2018 (30.06.2018).



H1 2018 metrics confirmed: -

*Revenue increased by 40% to £2.57m (H1 2017: £1.83m)

*Good revenue visibility maintained with Annualised Committed Monthly Recurring Revenue up 50% at £5.93m (H1 2017: £3.96m), in line with management expectations

*Gross profit up 62% to £1.20m (H1 2017: £0.74m)

*Gross profit margin 46% (H1 2017: 40%)

*Underlying* EBITDA increased by 92% to £0.63m (H1 2017: £0.33m)

It’s this annualised committed monthly recurring revenue growth that is particularly significant. The IaaS model provides reliability to revenues & immediate payment from the vast majority of clients. As mentioned, 95% pay monthly, so no bad debts & strong cash generation.

As shown during the last few years, the business is highly scalable & will allow margins to grow further. BKS have experienced high growth in their institutional client base which accounts for c. 80% of turnover. Not only are they gaining more clients, but this client base is also delivering an increased spend. The company have a broad spread of clients & no single client provides a dominant proportion of revenue.

This enabled Beeks to report an exit run-rate of monthly committed revenue of £494k at 31.12.2017 or £5.9m annualised.

Year-End Revenue Run Rates

Worth reiterating the year end exit run-rates: -

2014 = £900k

2015 = £1.6m

2016 = £3.4m

H1 2017 = £4m

2017 = £4.7m

H1 2018 = £5.9m

& Cenkos are forecasting: -

2018 (at 30.06.2018) = £7.2m

2019 = £9.8m

Cenkos noted that CAGR between 2014-2019 will be c.65% if they deliver as per forecasts & the CAGR of adj EPS between 2016-2019 would therefore be over 76% placing Beeks on a PEG of 0.2

The Future

H1 2018 results confirmed a positive outlook for the full year with a continuation of revenue growth. While they are focusing in growth opportunities in Asia there is also an opportunity for them to offer further services to existing & prospective clients through additional levels of security (DDoS) protection (worth Googling DDoS attacks) & also the development of back-up services to clients.

Importantly, the infrastructure investment they undertook in 2016/17 currently provides them with 6 racks of unused capacity on their platform which is spread over various data centres. Each unused rack is currently capable of generating an average of £38,000 per month of recurring revenue, or in total around £3m of annualised revenue with little additional cost.

I would envisage that the company will continue to focus on acceleration of organic growth by growing the client base while supplementing this with small bolt-on acquisitions or perhaps in the fullness of time, a move into other asset classes/additional markets.

Conclusion

A very worthwhile visit to the company & I came away greatly impressed with CEO, CFO & team members I met.

Setting up trading infrastructure & additional services are complex & time consuming for small institutions & individuals, so they appear to have developed an excellent niche & a cost-effective solution which would otherwise require clients to set-up & maintain networks. The BKS set-up is extremely fast with customers up and running within minutes.

There is also an opportunity for them to develop further services & add some small bolt-on acquisitions. Per the CEO, any acquisition must exhibit growth, be profitable & add value to the business. It was highlighted that most sales have occurred through word of mouth so they are looking to expand the sales team in the near term & are also viewing expansion in Asia & China.

Cenkos have PBT forecast of £1.2m this year (to 30.06.2018) & £2.1m PBT in 2018/19. I observed a team that are well incentivised & aligned in growing the company over the months & years to come. It was clear from my visit that the CEO has much loftier ambitions of growing the institutional investor base significantly from current numbers & should this occur then profitability should increase rapidly…& the share price will react accordingly!

Declaration

I have a modest holding in Beeks…so please DYOR & take my musings with the proverbial pinch of salt.

Kind regards,
GHF