BEEKS FINANCIAL CLOUD GROUP PLC BEEKS FINANCIAL CLOUD GROUP
SOFTWARE AND COMPUTER SERVICES
19 June 2023
BKS.L
116p
Market Cap: £76.1m
SHARE PRICE (p)
180 |
160 |
140 |
120 |
100 |
80 |
60 |
12m high/low | 166p/110p |
Source: LSE Data (priced as at prior close)
KEY DATA
Net (Debt)/Cash | £3.4m (at 31/12/22) |
Enterprise value | £72.7m |
Index/market | AIM |
Next news | Trading update, July |
Shares in Issue (m) | 65.6 |
Chairman | Mark Cubitt |
Chief Executive | Gordon McArthur |
Finance Director | Fraser McDonald |
COMPANY DESCRIPTION
Beeks provides low-latencyInfrastructure-as-a-Service (IaaS) for automated trading of financial products.
www.beeksgroup.com
PERLPARA
BEEKS FINANCIAL CLOUD GROUP IS A RESEARCH CLIENT OF PROGRESSIVE
ANALYSTS
Blaine Tatum
+44 (0) 20 7781 5309 btatum@progressive-research.com
Gareth Evans
+44 (0) 20 7781 5301 gevans@progressive-research.com
www.progressive-research.com
Reference client signed in South Africa
Beeks has today announced the signing of a contract with the Johannesburg Stock Exchange (JSE) for the deployment of an advanced managed Infrastructure-as-a-Service (IaaS) solution. The announcement contains no detail on the potential contract size, and we make no changes to forecasts at this stage. Nevertheless, we believe the JSE is a useful reference client win and being the second (blue-chip) Exchange customer for the Exchange Cloud suite, the deal further highlights the momentum building in the Beeks business.
- Beeks is deploying Exchange Cloud with the JSE. With its partner IPC, Beeks has signed a contract with the JSE for the deployment of an advanced managed Infrastructure-as-a-Service(IaaS) solution for the JSE on a white-labelbasis. Called Colo 2.0, the solution enables clients (in this case the JSE) to market low-latencyconnectivity and hosting solutions on a co-locationbasis directly to their own customers. Essentially the deal represents a revenue opportunity for the JSE - the Exchange providing a Cloud-basedoffering to its own customers. The project requires no cash investment from Beeks, with hardware being delivered from Beeks' existing inventories (valued at £2.4m H1 23).
- A reference client win, and the second Exchange customer for Exchange Cloud. Founded in 1887 and with a current market capitalisation of cUS$460m, the JSE is Africa's largest stock exchange by market capitalisation, and claims to be the 16th largest exchange in the world.
- Momentum building in Exchange Cloud. Beeks' interim results announced in February 2023 signalled the group was undergoing final contractual negotiations with two further material Exchange Cloud clients following 12- and 18-monthsales cycles. We understand that today's announcement represents the successful conclusion of one of those negotiations. The JSE is the second Exchange client for the suite, following the ICE Global Network (part of the group that owns the NYSE) contract announced in September 2022.
- Forecasts maintained. We leave estimates unchanged following the announcement. With the close of FY23 less than a fortnight away, we expect the deal to have a minimal impact on current year estimates. For FY24, we believe that the transaction helps to underpin our 19% YoY revenue and 30% YoY EBITDA growth forecasts.
FYE JUN (£M) | 2020 | 2021 | 2022 | 2023 | 2024 |
Revenue | 9.4 | 11.6 | 18.3 | 24.5 | 29.1 |
Adj EBITDA | 3.3 | 4.1 | 6.3 | 8.4 | 10.8 |
Fully Adj PBT | 1.4 | 1.6 | 2.1 | 3.2 | 3.7 |
Fully Adj EPS (p) | 2.5 | 3.0 | 4.2 | 4.2 | 4.9 |
EV/Sales (x) | 7.8 | 6.3 | 4.0 | 3.0 | 2.5 |
EV/EBITDA (x) | 21.8 | 17.6 | 11.5 | 8.7 | 6.7 |
PER (x) | 47.3 | 38.8 | 27.7 | 27.5 | 23.7 |
Source: Company Information and Progressive Equity Research estimates.
This publication should not be seen as an inducement under MiFID II regulations.
Please refer to important disclosures at the end of the document.
19 June 2023 | ||||||
Financial Summary: Beeks Financial Cloud Group | ||||||
Year end: June (£m unless shown) | ||||||
PROFIT & LOSS | 2020 | 2021 | 2022 | 2023E | 2024E | |
Revenue | 9.36 | 11.62 | 18.29 | 24.47 | 29.12 | |
Adj EBITDA | 3.33 | 4.14 | 6.31 | 8.36 | 10.85 | |
Adj EBIT | 1.18 | 1.67 | 2.36 | 3.59 | 4.29 | |
Reported PBT | 0.68 | 1.26 | 0.07 | 2.89 | 3.41 | |
Fully Adj PBT | 1.43 | 1.61 | 2.06 | 3.23 | 3.75 | |
NOPAT | 1.29 | 1.84 | 2.50 | 3.95 | 5.15 | |
Reported EPS (p) | 1.13 | 3.07 | 1.43 | 3.99 | 4.75 | |
Fully Adj EPS (p) | 2.45 | 2.99 | 4.19 | 4.22 | 4.90 | |
Dividend per share (p) | 0.20 | 0.00 | 0.00 | 0.00 | 0.00 | |
CASH FLOW & BALANCE SHEET | 2020 | 2021 | 2022 | 2023E | 2024E | |
Operating cash flow | 3.26 | 3.26 | 4.70 | 6.99 | 8.00 | |
Free Cash flow | (0.67) | (3.80) | (7.68) | (0.81) | (0.76) | |
FCF per share (p) | (1.02) | (5.80) | (11.70) | (1.24) | (1.16) | |
Acquisitions | (0.75) | (1.02) | 0.00 | 0.00 | 0.00 | |
Capex | (3.54) | (6.75) | (12.09) | (6.86) | (7.96) | |
Shares issued | 0.00 | 5.01 | 14.76 | 0.00 | 0.00 | |
Net cash flow | (0.91) | (0.31) | 6.79 | (0.81) | (0.76) | |
Overdrafts / borrowings | (2.18) | (1.49) | (2.30) | (2.30) | (2.30) | |
Cash & equivalents | 1.43 | 3.37 | 10.16 | 9.35 | 8.59 | |
Net (Debt)/Cash | (0.75) | 1.89 | 7.86 | 7.05 | 6.29 | |
NAV AND RETURNS | 2020 | 2021 | 2022 | 2023E | 2024E | |
Net asset value | 6.72 | 13.77 | 30.77 | 35.08 | 41.83 | |
NAV/share (p) | 10.24 | 20.99 | 46.92 | 53.50 | 63.80 | |
Net Tangible Asset Value | 6.76 | 10.39 | 16.27 | 17.91 | 19.17 | |
NTAV/share (p) | 10.30 | 15.85 | 24.81 | 27.32 | 29.24 | |
Average equity | 6.17 | 10.24 | 22.26 | 32.32 | 35.25 | |
Post-tax ROE (%) | 23.2% | 15.7% | 9.2% | 10.0% | 10.6% | |
METRICS | 2020 | 2021 | 2022 | 2023E | 2024E | |
Revenue growth | 24.1% | 57.5% | 33.8% | 19.0% | ||
Adj EBITDA growth | 24.3% | 52.4% | 32.5% | 29.8% | ||
Adj EBIT growth | 42.1% | 41.1% | 52.3% | 19.6% | ||
Adj PBT growth | N/A | 27.9% | 56.8% | 16.1% | ||
Adj EPS growth | N/A | 40.2% | 0.6% | 16.1% | ||
Dividend growth | N/A | N/A | N/A | N/A | ||
Adj EBIT margin | 12.6% | 14.4% | 12.9% | 14.7% | 14.7% | |
VALUATION | 2020 | 2021 | 2022 | 2023E | 2024E | |
EV/Sales (x) | 7.8 | 6.3 | 4.0 | 3.0 | 2.5 | |
EV/EBITDA (x) | 21.8 | 17.6 | 11.5 | 8.7 | 6.7 | |
EV/NOPAT (x) | 56.2 | 39.6 | 29.1 | 18.4 | 14.1 | |
PER (x) | 47.3 | 38.8 | 27.7 | 27.5 | 23.7 | |
Dividend yield | 0.2% | N/A | N/A | N/A | N/A | |
FCF yield | (0.9%) | (5.0%) | (10.1%) | (1.1%) | (1.0%) |
Source: Company information and Progressive Equity Research estimates
2
19 June 2023
Disclaimers and Disclosures
Copyright 2023 Progressive Equity Research Limited ("PERL"). All rights reserved. Progressive's research is commissioned by the subject company under contract and is freely available to the public and all institutional investors. Progressive does not offer investors the ability to trade securities. Our publications should not, therefore, be considered an inducement under MiFID II regulations. PERL provides professional equity research services, and the companies researched pay a fee in order for this research to be made available. This report has been commissioned by the subject company and prepared and issued by PERL for publication in the United Kingdom only. All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable; however, PERL does not guarantee the accuracy or completeness of this report. Opinions contained in this report represent those of the research department of PERL at the time of publication, and any estimates are those of PERL and not of the companies concerned unless specifically sourced otherwise. PERL is authorised and regulated by the Financial Conduct Authority (FCA) of the United Kingdom (registration number 697355).
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Beeks Financial Cloud Group plc published this content on 19 June 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 19 June 2023 14:04:06 UTC.
