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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.
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.
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.
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.