Beeks bullish amid growth plans and ‘solid’ H1 despite warning on FY profit

Chief executive Gordon McArthur said the 2017 flotation had a massive impact on the business. Picture: Layton Thompson.
Chief executive Gordon McArthur said the 2017 flotation had a massive impact on the business. Picture: Layton Thompson.
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Paisley-based Beeks Financial Cloud saw its share price tumble in early trading after revealing that full-year earnings are set to come in lower than previously forecast.

However, it hailed its first-half performance, with revenues showing a 36 per cent year-on-year jump to £3.5 million and underlying pre-tax profit up 46 per cent to £410,000.

Chief executive Gordon McArthur told The Scotsman that the results show a “solid” first half compared to last year, adding: “Everything is moving in the right direction and we’re happy with where we’re at overall.” He also stressed that it is a second-half weighted firm.

It unveiled its proposed maiden interim dividend of 0.20p, following the payment of a full-year dividend last year. McArthur noted that the firm has publicised its progressive dividend policy, “so we hope that grows as the business grows”.

The period also saw Beeks sign its first tier-one client, “representing a major milestone for the company with a strong pipeline of further institutional contracts”.

Beeks floated on the Alternative Investment Market in November 2017, and McArthur said this was a “significant” step forward both in the firm’s development and how it is perceived, including in conversations with potential clients.

“Over the last 18 months, we’ve seen a slow and gradual realisation that we’re not just some small business based up in Glasgow – we’re a proper PLC and properly scaling.”

The business expects full-year revenues to be broadly in line with expectations, and predicts underlying pre-tax profit will grow by about 25 per cent. The reduced forecast for the latter “reflects investment in platform infrastructure and operations, increased depreciation and amortisation as well as geographic expansion”.

During the first half the firm opened two new data centres – including Singapore, which is now revenue-generating – while a site in Brazil is in the planning stages and expected to be revenue-generating by the end of the year.

McArthur stated: “Our model is that we support everything from Glasgow and Scotland and will continue to do that as we grow.” The firm will then have a footprint in all the key trading centres around the world. It is also still mulling acquisition opportunities.

Ian McInally, analyst at house broker Cenkos, said it downgraded its forecasts, but recognises the need for further investment to let Beeks take on increasingly large tier institutional customers. The opportunities are “considerable”.