The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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Not much of a surprise as The CEO said at the recent online investor meeting that JSE were very happy. The backup system would be a bonus He also mentioned that JSE were in regular contact with other exchanges. Didn't make any notes but believe he mentioned Hong Kong, Australia and Singapore. Beeks are onto a winner with Exchange Cloud, quite likely the next contract comes from one of the above, whilst western exchanges and regulators dither.
Very bullish report from Beeks this morning. Back to profitability, debt down and investment in improving platforms for clients including reducing costs for Beeks. Also another Proximity Cloud contract from a major international Tier 1 bank.
2024 is a significant year with 25% underlying growth. The CEO now sees greater than expected growth for 2025.
The greatest growth driver long term is likely to be Exchange Cloud. Three contracts already but regulatory approval is slowing progress. The Johannesburg exchange contract is in full operation and now effectively, a proof of concept trial for other exchanges and importantly regulators.
Superb interview with Gordon McArthur CEO/Founder at https://shows.acast.com/paulscottsmallcaps/episodes/beeks-financial-cloud-bks-paul-scott-interviews-ceofounder-g
Nice commentary on BKS by Paul Scott on his week-end podcast. Listen from 8:07mins although all is well worth a listen.
https://podcasts.apple.com/gb/podcast/small-caps-podcast-with-paul-scott/id1642339156
Not to mention exercise of options last week . Unbelievable! Actually it’s how this stock market works
Large buying yesterday ... rns today.
Which news please- no rns
Good news this morning. Despite delays with Exchange Cloud the company is ticking over.
With regard to NYSE, it seems that no movement likely before next year, most likely after the Johannesburg Stock Exchange contract has been installed and in operation. In my view, it could well be that permission from the authorities is not yet given. Presumably they want to see the successful operation of Exchange Cloud first, before giving approval. The current low level of the share price would also suggest that.
This contract secured with partner IPC. That's two of the top twenty exchanges secured. A slow regulatory process to actually getting revenues. With the message that installation can be done with existing stock, it suggests that this will be quicker to get into operation than the NYSE contract
There is something I purposely left out of my original take on the InvestorMeet presentation. Asked about the likely size of an Exchange Cloud contract, Gordon McArthur said that around 20 cabinets is possible. With the going rate for a cabinet @1m could well be 20m. Now I'm not sure whether that is dollars or sterling and per annum or perhaps over three years. Might have missed something that he said but have been too busy to watch again. My previous own estimation of a major exchange contract is a minimum of $10m per annum. Either way we are still talking pretty large numbers. Which are most likely going to be fluid in any case. Thereby allowing the exchanges involved, to add new clients in response to any demand. Gordon McArthur said that the potential clients number around 800-1000 for each exchange. He accepts that many will want to do their own thing (for which Beeks can offer Proximity Cloud).
Beeks are out in front on their own here, in terms of product offering with Exchange Cloud. Getting this right, should prove to be extremely rewarding.
A few notes on yesterday's InvestorMeet presentation.
Video as well as audio again as in October. Gordon McArthur, CEO and Fraser McDonald, CFO, were representing the company. Both appeared to be in good spirits, in contrast to the tension that was apparent at the previous presentation. With what is at stake for Beeks, that was understandable. Gordon McArthur, in particular, has had a plan, for where he wanted to take Beeks and now success is seemingly looming over the horizon.
Opened with a slideshow explaining the evolution of the Beeks' offering from Public Cloud to Exchange Cloud.
This was followed up by Fraser McDonald going through last year's numbers in yet another year of decent growth.
Then the Q & A session.
What did we learn from this?
No probing question on the IGN Exchange Cloud contract, so nothing new learned there. On reflection, it is likely that IGN might well consider such details as commercially sensitive. Which would mean the only indication of the size of this contract, could well be the increasing level of revenues.
On the subject of which, £25m looks likely for the full year and £30m plus next.
Exchange Cloud, is a slow process not just communication with IT departments. Discussions need to be held with numerous parts within an exchange company's organization. Mainly to protect their clients but also to protect themselves from the regulators.
Some of the discussions with Exchanges are being done jointly with IPC, who are a regular partner with Beeks.
Of the two Exchange Cloud contracts in negotiation, Gordon McArthur stated that it had been hoped to announce one with the results. Not to be, (but can't be that far away?) Incidentally, the negotiations are with a major exchange and a regional exchange. (Likely that the latter is closer to agreement, imho.)
Data Center charges went up in January, Beeks have increased their prices from March 1.
We had already been told that the staff number was now 106. Also learned that the software development team will not be getting any larger. Therefore their costs as a proportion of revenues are set to decline.
Gordon McArthur was reticent at first about giving an indication of likely Exchange Cloud contracts. He did concede maybe five over the next two to three years. Had already said that Beeks were in contact with many interested exchanges. Also that once established, it will be easier to get new exchanges to sign up.
On closing he said "We look forward to a more exciting growth trajectory going forward." (Take note, that can be interpreted as being far greater than a pretty impressive 35%).
No market reaction to the presentation. Though I was pleased with it and have topped up with a few more.
No surprises today. Costs are rising due to increased investment. We have been told about Exchange Cloud contract negotiations with two further material exchange clients. That would suggest that the IGN period of exclusivity will be ending this year.
The Investor Presentation will be this Wednesday @ 12pm. With Beeks so close to what could prove to be the start of a major upward shift in revenues and profits, has to be worth sparing the time for. InvestorMeet do offer a recording post presentation.
Would hope to see revenue growth, perhaps news of a contract. Maybe some news of the IGN (ICE) Exchange Cloud contract, even if it is just a timetable. We have to bear in mind that Beeks are not doing the selling with this white label job, it is down to IGN. In my mind am looking at June when IGN and Beeks agree on the size of the initial installation. Would presume that some spare capacity will be included. With the Exchange Cloud system assembled, installed and in operation by the year end. Margins are going to be lower, therefore critical that Beeks get their pricing right. If this is a success and IGN do indeed seek a global roll out, it will be a massive game changer for Beeks. Even before considering the potential demand from other exchanges.
Had a look at the Beeks' website yesterday, they are looking to hire new senior talent, to service their ever growing list of clients. Not a sign of a stalling business.
Perhaps ICE have advised how many clients they have already signed up to their pending Exchange Cloud installation in NJ. Beeks have already said 12-18 months before revenues start for Exchange Cloud. This one is likely to be very large, enough to take 18 months. Once running, revenues should comfortably dwarf Beeks' existing US revenues in total.
Tipped by Regency Capital
10% rise today. Anyone have a clue why ?
The market doesn't seem impressed. Why is that?
Not much has gone wrong here.
Why the sells?
Taken a while to write my take, on what was said at the InvestorMeet presentation on Oct 13. This time it took place with video as well as audio. Beeks were represented by Gordon McArthur, CEO and Fraser McDonald, CFO.
The event took place with commentary to a slideshow covering the events and numbers for the last financial year. As usual the most interesting part was the Q & A session that followed. The snippets below were said to random questions but have been sorted.
In response to a question regarding staff numbers, the CEO responded with "just over 100". The year end number was 89, which reflects the continuing growth of Beeks. As Gordon said "23 is the year of sales execution". In response to another question, he didn't hold back when said, "would have liked one or two more contracts".
With regard to a question on anything new, we were told that there is "no new product development on the horizon. We will be investing to improve existing products."
On the subject of inflation/energy costs, we were informed that, Beeks "can pass on power costs to monthly charged customers. Proximity customers supply their own energy."
There would appear to be a question mark with passing on increasing costs to some Private Cloud customers. With Fraser McDonald on a question regarding doing things better, letting slip the remark "writing good contracts that will allow price increases."
Regarding the recent release of Exchange Cloud, Gordon said "high hopes going forward". There were no numbers given with the announcement of the ICE (IGN) contract advised by rns on September 12. It was revealed in this session about Exchange Cloud, "about 12-18 months to billing". Which suggests they could prove to be very large, indeed potentially Beeks largest contracts to date.
We also learnt "that ICE have been incentivised to promote Beeks products". I would assume that means commission from selling Proximity Cloud to their own clients, that want to expand and develop their cloud usage. No further information available "ICE have a period of exclusivity, can't disclose details apart from already issued."
All food for thought, it would appear that Exchange Cloud could have an impact on costs in year 23 but no revenues. Therefore one or two other contracts would be welcome short-term. We will have to wait to get an idea of the potential value of this first Exchange Contract. The secrecy surrounding it, does suggest that very substantial is quite likely.
The impact of contracts that don't allow price increases could have an adverse on margins in the current financial year. Which might mean that year-end 24 could be the start of increasing profitability. Who knows, perhaps ICE have somebody in an office somewhere in their empire, crunching numbers. The only answer that makes sense is to acquire Beeks. Giving Mr Gordon McArthur an offer he can't refuse...
ICE Global Network Inc named as first Exchange Cloud customer
Following the announcement on 13 June 2022 of the launch and first customer for Exchange Cloud, Beeks can now confirm the customer is ICE Global Network. ICE Global Network ("IGN") has signed a multi-year deal with a period of exclusivity, with the collaboration enabling the customer to provide their client base with compute and analytics, on demand.
This could be huge, exchanges across the globe dealing with futures, energy, agriculture etc. No wonder Beeks have granted IGN (ICE) a period of exclusivity.
https://www.theice.com/about/exchanges-clearing
Exchange Cloud is a multi-home, fully configured and pre-installed physical trading environment that has been fully optimised for global Exchanges to offer cloud solutions to their end users. The successful collaboration between ICE Global Network and Beeks Group's Exchange Cloud provides a pre-integrated market-leading solution with security at the forefront.
IGN can now deliver additional value to their clients with Beeks Group's Exchange Cloud infrastructure, compute and analytics offering private cloud services at their NY4 data centre in Secaucus, New Jersey with plans to further expand the service in IGN data centres around the world.
A news item on the Beeks website from April 14, I missed. A bespoke, (multi-tenanted?), private cloud system for an outstanding UK payments technology infrastructure provider.
https://beeksgroup.com/news/form3-appoints-beeks-to-underpin-their-payments-technology-platform/
About Form3
Form3 design, build and run the technology that powers the future of payments. Founded In 2016, Form3 set out to revolutionize the world of payment processing and disrupt the traditional payment infrastructure model, with an always on, cloud-native, Payments-as-a-Service platform.
Today, Form3 is trusted by some of the UK and Europe’s biggest Tier1 banks and fastest-growing fintechs to handle their critical payments architecture. Form3 was named Best Cloud Payments Platform 2021 by Paytech and Fintech Finance, Most Influential Fintech Company in 2021 by The Financial Technologist and ranked in the Top European Fintechs to Watch by Sifted 2020.
There could well be the possibility of future Beeks collaboration with Form3. As this company is expanding into the US payments market. They have also advised, on Jul 7, that they been invited by the US Federal Reserve to participate in the pilot program for FedNow, which launches next year.
Beeks are likely to issue an update, on their Full Year, within the next few weeks.
Following the successful completion of the significantly oversubscribed fundraise in April 2022 to accelerate development of Beeks' offering, Exchange Cloud is now formally launched,
with a major equities exchange already under contract to deploy later this year.
Additional proof of concept implementations and discussions are underway with potential customers.
Gordon McArthur, CEO of Beeks Financial Cloud commented:
"Our product development has always been driven by customer demand and we created Exchange Cloud specifically to meet the needs of top exchanges around the world. During early-stage Proximity Cloud discussions with some of the top ten financial exchanges in the world, we identified a demand for a secure, multi-client cloud environment which they could offer to their customers. We believe the end-user compute market within exchange data centres to be considerable, and there to be no comparable offering currently in the market.
"We are delighted by the early win of this top exchange, which will contribute towards underpinning our FY23 expectations, but more significantly we believe the opportunity for Exchange Cloud to be potentially transformative for our business."
Early good news, if not the best of days market-wise. A contract already agreed for deployment later this year. Beeks' level of business, now means that these contracts individually do not require a formal announcement. The company is in discussion with all the major exchanges offering a product that is currently unique. Should the share price fall short term, I would regard this as an opportunity rather than a concern.
Another titbit of information from the InvestorMeet presentation was that Beeks will be expanding their coverage of global data centres in response to demand.
A client requires data services from Washington DC. Also partner IPC have requested data centre services from Amsterdam, Geneva, Zurich and Mexico, which are expected to be in place sometime during the second half of this year. In my view this is likely to lead to an expansion of current contracts or possibly new ones being signed.
Another data centre mentioned as a future possibility is Johannesburg. Which suggests that there might be initial contact from an existing or a potential new client regarding this.
SP showing 9 tick ups so far today after £15m fund raise.
Coffee Can share for sure.