Beeks Financial Cloud Group (LSE:BKS) — Final Results

0:01 Good afternoon, and welcome to the BEEKS Financial Cloud Group PLC financial risk financial results investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged, and they can be submitted at any time using the Q and A tab situated on the top right corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and publish responses when it's appropriate to

0:32 do so. Before we begin, I would like to submit the following poll. And I would now like to hand you over to CEO, Gordon McArthur. Good afternoon to you. Thank you, and welcome, folks. Thanks for joining. Good afternoon. I'm gonna kick off and cover first few slides as usual. Then Fraser's gonna cover the financials as we go through the deck, and then we've got some questions already submitted at the end, so we'll cover them at the end. So let me just cover go into the first couple of slides. So, you know, a bit of background on what do we do, who are BKS. So cloud computing company, focused solely on capital markets. Cloud computing are infrastructure as a service. Different terms, same same thing.

1:20 We provide cloud computing resources, connectivity, and analytics for mission critical trading infrastructure, from small, small hedge funds, prop shops, brokers up to large, mid sized banks, and, most recently, some of the largest exchanges in the world. So we deploy infrastructure and financial data centers around the globe. We connect, to various trading venues within the data centers, and we connect our data centers together around the world using, Hawaii data network or the BKS back on that, we take from, various carriers around the world.

2:07 So where what does the business do in a little bit more detail? So the majority of our revenue comes from trading infrastructure. That is selling dedicated servers, virtual machines, networking to, various size of organizations. We also, as I said, have a backbone that connects all of our data centers, so we will sell that as a an value add service. About five years ago, we bought a company called the Losimetrics, which is now being rebranded as BEEKS Analytics. So we have a network and trading infrastructure analytics package, and we do a small amount of professional services as we deliver, some of the large projects that we that we get involved in. However, 90% of our revenue is derived from that core trading infrastructure deployment, whether it be, you know, private cloud, public cloud, or proximity to exchange. And and we'll cover, as we go through the deck, a little bit more detail on on the different product segments that we have.

3:12 So that slide kinda breaks it down into, you know, the product groups. So the business started in the kind of public and private cloud provision. Public cloud is, you know, completely shared infrastructure, shared networking, you know, shared hosts under virtual machine layers that clients can buy over the Internet or via a portal, spin it up, spin it down in five, ten minutes, and you have a an environment no different to an AWS or or Google or or Microsoft Azure. Just different in that. We connect it directly to all of the exchanges and various trading venues around the world. And that's been the the backbone of the company. Right? That you know, for the last since we IPO'd six or seven years ago now, that's where the majority of the growth has come from.

4:01 Still, I think it'd be 80% of our revenue, still performed very well over the last period. And these deals are can be month to month. Public cloud is month to month. Private cloud where we will design a little bit more of a bespoke environment for a maybe a slightly larger organization. We tie them into, you know, twelve, twenty four, thirty six month type terms of contract. And the size of these deals can vary from anywhere tiny to, you know, £1,000 a month to, you know, millions and millions of pounds a year. And as I say, it's still the majority of the lion's share of of the revenue pile that we that we delivered last year. And for those of you that have been following us for for any time now, Proximity Cloud, we is now kind of three years old, two and a half to three years old, I would say.

4:56 And is is our bespoke infrastructure for a single client. So it's a single tenant platform that is delivered in a bespoke cabinet solely and exclusively for the use of one organization and really was on the demands of the larger client who security and compliance departments do not like the shared infrastructure model. Doesn't matter how flexible it is. The fact that there are other clients on that infrastructure is a big red mark in terms of security and compliance. So so we released Proximity Cloud as a as a stand alone cabinet based infrastructure entering infrastructure a few years ago. And, again, you know, it's much larger ticket size in terms of we we talk about total contract value for Proximity Cloud because it tends to be a three to five year term. And these can be anywhere between one to five and even larger. Right? A million pounds of of TCV, anyway, you know, anywhere up to five. And as clients extend the usage of it, that that can certainly grow.

6:08 And Proximity Cloud is is the same technology stack as as the as Exchange Cloud. Right? It's the same underlying technology that sits in both product offerings. The difference is Exchange Cloud is packaged and is targeted at exchanges to give them a cloud environment and their own data center. You know, most of the world's matching engines run, especially in equities and and derivatives, run-in exchange data centers. They do not have a cloud platform within that data center. Right? And AWS or Google or Azure sits in their own their own data centers, which from a speed point of view and a connectivity point of view is just too far away for a lot of the participants to use for execution.

6:58 Fine for, you know, generic hyper skills are fine for back office functions and things like that. But when it comes to trade execution, speed matters, and and you really need to be in the same same building as the exchange. So exchange cloud, couple of years old now, and really took the proximity cloud footprint and turned it into a multi homed environment. So that means we can deploy that into an exchange into an exchange's data center, light it up, and white label it as the exchange's cloud offering. You know, strapline here is we enable exchanges to become the cloud rather than, you know, moving to the cloud, which I think is a bit of a fallacy for high end matching. So, you know, a lot of the narrative over the last couple of years is is a significant opportunity that we see with Exchange Cloud, and and we'll cover it as we go through the presentation. But these deals, very large in size and scale, anywhere between 3,000,000 to 20,000,000 of TCV and and and can go larger. Right?

8:01 We'll talk a bit more about the success of the the Johannesburg Stock Exchange as as we go through, and then that's bumping up to the upper ends of of of what we see in terms of TCV. So, you know, if you kinda look at it, mean, we have small, medium, large type of deployments, right, various packaged solutions for various different use cases and customer types in our world. And, you know, for the relative relatively successful year across all three of the product lines. So just a quick high level view of the financials, and Fraser will go into much more detail as we go through. So year on year revenue was up 27%, monthly committed run rate, which is the kind of one of our key metrics that we monitor at the board. The overall health of the business up 18%, and very pleasingly, probably since over the following the first period since we IPO ed, you know, we are now cash generative, and our net cash has gone from 4.4 to 6,600,000.

9:05 So, you know, we if you look at the the diagram on on the right, I think that's not quite since IPO, but shows the the revenue growth. It's been fairly consistent since we IPO ed. We've always been you know, for some better years and some worse years and, you know, we'll talk to the investor with us earlier on today. You know, I think if you look on average, the business has grown on average 25 to 30% year on year since we IPO ed, and and that goes back beyond before IPO as well. We've always been relatively consistent on the overall revenue growth year on year, which is fairly unusual.

9:47 We've had some big exchange cloud and proximity cloud wins throughout the year as we've announced. A lot of land and expand success. And as we said, in the statement yesterday morning, we are in the kind of final stages of discussions and contracting with a number of the other large global exchanges around the world.

10:13 So this is a slide that we we we thought we would put in just to try and explain and give some context around why we think Exchange Cloud is the most important thing for us as a business going forward. What what what is the opportunity there? What does it look like? And this one is based on, you know, our kind of flagship client Johannesburg Stock Exchange, Jesse, who really were the first exchange to enable Exchange Cloud in their core matching engine data center. Right? And that was signed in June 2023. Now JSC are not, you know, by their own admission and by their own statistics, are not the largest exchange in the world. Right? And and when we first started, you know, putting Exchange Cloud together, we were trying to size the opportunity, and we looked at, you know, these emerging markets exchanges like GSE.

11:05 And we thought there's maybe a 2 to £5,000,000 opportunity for us in that first phase of the contract, right, the first four or five years. That's proven to be pleasingly very not very optimistic at all. So so GSE signed, the first part of the the deal in in June 2023. They have extended their contract a number of times now. They filled the capacity a number of times. They have a very significant pipeline of future business, that we're working on with them jointly. And as we announced in, in August, they've now signed for a second site. So what what a lot of the exchanges look at Exchange Cloud as a way to get small clients in trading, testing on Exchange fast and quickly without a lot of lot of effort.

12:00 But what we've seen in the GSE implementation is a lot of the big South African and and African banks and international banks have actually been the biggest drivers of growth. Right? They, you know, they are they all have footprints in collocation or they want their footprints in collocation,

12:18 and they've really embraced COLO two point o as GSE call it. So that has led to GSE licensing a second site because, you know, from a compliance and regulation point of view, banks need to have both primary and Doctor capability for their trading infrastructure. So we have signed a an ex another extension of the GSE the GSE contract we've announced in August for a second site. So what does it all mean? Right? You know, looking back at where we thought this contract would go a years ago when when, you know, we're first negotiating and signing it. It's grown materially. Right? And, you know, GSE fully expect to have 10 to 15 cabinets in the production facility in the next couple of years and five to 10 in that Doctor site.

13:07 So, you know, it's roughly a million dollars of TCV per cabinet. So, you know, we or we've revised our estimates for the GSE on an emerging market exchange upwards from two to five to 15 to 20. Right? So maybe three or four million pounds 3 to £5,000,000 per annum. And, you know, I think when we started on the exchange cloud journey, we looked at the big mega exchanges, New York's, London's, and and thought that's where the primary source of revenue come from. But, actually, I think we're equally as excited about the emerging markets. And GSE has really opened their eyes and a lot of the exchanges' eyes to the opportunity both for us and for them to onboard clients that wouldn't have traded on the exchange without having exchange cleared available.

14:02 And we'll we'll I think there's more slides on emerging markets as we go.

14:10 We you know, we've we've been asked by a number of times, and I know it's a a fairly niche world and a bit of an ethereal world with it. It's not, you know, it's not an everyday conversation, not an everyday company. Like, it's some of it's quite difficult to understand. So we've put a a couple some text together about why why BKS in this space? Why are we winning? Why can't other people do it? You know, why is there not much more competition than there there seems to be? So, you know, from end to end across, you know, how we how we build the technology, you know, there's there's technological barriers to to doing this as as other IT companies. Right? Most networking without getting into the the weeds of technical understanding of this, most networking works on what's called a unicast basis. So, you know, point a talks to point b and vice versa.

15:04 That doesn't work in exchange land. Right? So exchanges have got use what's called multicast. Right? An exchange has an obligation, a legal responsibility that every member gets the same piece of information, pricing, or whatever it is at the same time. Right? So the only way of doing that is using what's called a multicast protocol. So multicast is based on a broadcast protocol that sends out to hundreds of thousands of endpoints the same information at the same time. There are very few networks around the world that use multicast other than in financial markets. So our networking, our entire stack is built around multicast networking. So hyperscalers really struggle to their networks are not built and suitable for a multicast type of setup. So, you know, from from the core underlying technology, we have built everything in Exchange Cloud and Proximity Cloud to match capital markets requirements.

16:01 Right?

16:03 Speed is important, so latency is minimized as much as we can. So everything we do from end to end is based around supporting and having high performance cloud capability for capital markets. We would never win a unicast based requirement for an email platform, a CRM platform, a back office platform because our technology equally is not built to to cope with it and and and to be in the best place to to do it. Our delivery model is very different as well, especially in Exchange Cloud. So the hyperscalers have been banging on for years about Exchange is moving to the cloud, and I don't blame them. Right? Because they they see it as a multibillion dollar opportunity to try and get execution into the cloud, but that's their their opportunity. Right?

16:51 If you look at the big big larger exchanges, their colocation and market data business is worth hundreds of millions of dollars to them. The hyperscalers want that. Right? And, you know, for for however long I can remember now, they've been talking about exchanges execution moving into the cloud. We don't think that's ever gonna happen. There's no real meaningful high end matching going on in the cloud despite the best marketing efforts of the hyperscalers. So we've taken that into consideration, and what we're seeing is you need a cloud platform. Right? Like, people want to embrace cloud computing and trading infrastructure. So we enable the exchange to white label our product and offer it as their own cloud platform. Right? So we sell once to the exchange. They're they're our client. We work with them supporting their end clients, but, ultimately, it's their cloud platform powered by BEEKS. So the delivery model is completely different.

17:48 What we are saying is we are not asking you to move and give all your revenue charge. What we are saying is we are giving you an extra source of revenue by giving you a clean platform that you go, a, make it easier for your participants to trade on your exchange, but also make money from. So it's a very different delivery model. We are now tried and tested. Right? We've got referenceability. We've got very happy clients. We've got clients that are more than happy to talk to each other. And it's quite strange in exchange land because a lot of them don't compete. Like, GSE don't compete with Singapore. They don't compete with Australia or Toronto. So they all talk. They all share stories. So, you know, we are we are now, I would say, the kind of known entity and and enabling exchanges to become the cloud.

18:37 And and this is a big deal. Right?

18:39 But this is us an exchange white labeling our our platform under their name, providing it to their clients that transacts billions and billions of dollars of trades per second. Experimenting in this area is not something that exchanges are gonna do. Right? That's why it's taken us a couple of years to get the first few onboard, the first few happy because, you know, it's having referenceability and performance metrics and stats that shows what that has what that has done for liquidity and flow on the exchange is a big deal. Right? And there generally isn't another product out there that's multi home based on exchanges becoming the cloud and sitting in their sitting in their environment. So we have built it we built it from scratch. It's got our own proprietary software in there, our own proprietary analytics in there.

19:39 So there's a lot there's a lot of barriers to entry and why another generic IT company can't just come along and compete with us in the exchange cloud space.

19:51 So, yeah, I mean, just a little bit on emerging markets. So as I said earlier, we, you know, we when we on day one, we kinda targeted, and we continue to target the big, you know, very well known mega exchanges. But what what we've found is it's it's easy for a bank to do business in New York and London. They have staff there. They have offices there. They have entities there. But if you look at places like South Africa, you look at places like Mexico, Saudi Arabia, Malaysia, the banks maybe don't even have an entity. Right? How do you import infrastructure? How do you support trading on that exchange? Enabling your service to be available through the exchange is difficult.

20:39 So the our use case resonates a lot in emerging markets because people either underexploited and people looking at, you know, whether they're offering a service or looking to gain out for an exchange and trade themselves. But there's barriers to entry. So there's there's there's demand there from customers wanting to embrace cloud technology and these smaller exchanges that are maybe less well known. So I think if we we, you know, we look around the world and a lot of the engagements that we're having at the moment is with a lot of emerging market exchanges. And you go back to the GSE numbers, you know, if every emerging market exchange is gonna be worth 15 to 20 to 25,000,000, that is just as big an opportunity as the top 10 more well known exchanges.

21:27 And they can move faster. There's less red tape. There's less regulations. So we've got a real conscious effort into targeting these emerging market exchanges. And, you know, we've we've we've scaled up a little bit to to support that as well. So hired Adam Bradley, who's now head of APAC. So Adam ran the Australian Stock Exchange colocation facility commercially for ten, fifteen years, so very experienced, very well known. And Zach, who we've taken as head of presales for Exchange and Props Cloud, x AWS, x Nasdaq. So, again, good exchange experience. And Jerry, heads up The Americas, who's, you know, working with a a lot of the the larger North and South American exchanges.

22:16 So we'll continue to expand the head count with exchange based experience and particularly targeting emerging markets. One thing that we've kinda started calling out, we are in the early days of building out an AI and ML product, so based around our analytics product. So we capture a lot of very fine grained data from a bank or an exchange or whoever it is that's running our analytics products. But it's the the the amount of data is vast. It's very diff it's very, you know, granular level stuff. It's very difficult to do anything with. So we work with a number of clients to see if we capture that data at the edge, I. At the trading venues, and we allow you to run AI and ML models on it that we will build for you and with you, what do you wanna see from it? Right?

23:12 And the messaging back is is is a lot of similarity to you know, no matter who we talk to. So things like anomaly detection, you know, root cause analysis on, you know, problems within the exchange infrastructure or the banking infrastructure. And this is very difficult to do in real time because of the size and and the complexity of the data. So we're at the early stages of building out an AI and ML product around not just our proprietary analytics, but some of the other offerings out in the out in the marketplace where we will try and give real time at scale actionable insights on what is going on within trading infrastructures and machine, you know, some machine learning specialties there.

24:03 You know, we're probably six six months away from, you know, version one of the production product. You know, it's in development at the moment. We were not jumping on an AI bandwagon as we've never been that company, but there is certainly something there. How significant is we're I think we're in too early days to tell. So we will we're not bearing the house on it. We're investing some, you know, a few million dollars over the next few periods to get the product to a position where we can start, you know, POC ing and marketing with with a number of already identified clients on it. Alright. And I'll hand over to Fraser to start us through the numbers. Sure. Right. Thanks, Gordon. Good afternoon, everyone.

24:50 Fraser McDonald, CFO at BEEKS. So I'll I'll cover I'll cover some of the key financials and, obviously, happy to take questions on anything in terms of more detail towards the end. So, yep, you know, as as Gordon said, since IPO, we've typically grown about 25 to 30%. So, you know, another good year. You know, obviously, as the numbers get bigger, that that percentage gets harder to achieve. So, you know, 27% is, you know, has been a a good year, and that's that's been about £6,000,000 in terms of revenue growth. And pleasingly, that's, you know, relatively well split across public and private, which grew about 3,000,000 and then prox and exchange, which grew at a similar level. Proximity exchange, you know, again, is where we see you know, where we really, really grow. And just now that as a percentage of revenue is only about 12%.

25:35 So as we move forward, we expect that to be a bigger percentage as a of our overall revenue. Committed revenue again is up. So that's that's mainly the public private run rate business, which again has been consistent, and and that's up 18%. And, you know, this period has been quite a marked difference in terms of how our revenue growth has translated to profit. So our profit before tax is up 68%,

26:03 and that's really the fact that our operating margins have improved. So we are now getting that operational leverage. So where our revenue's grown at 27%, our overhead cost base has only grown by 5%. You know, that's that's why we've we've we've delivered better margins. And, just one of the main drivers for that, we we talked about this this time last year. You know, we're looking to control and make selected hires in terms of our headcount. So, you know, we've we've we've had a significant recruitment drive over the last couple of years, but we've we've largely built that team now. As Gordon says, there's been some strategic hires, and and that will continue. But, you know, we look at staff cost as percentage of revenue. That's 25% this year, which, you know, compared to last year was start over 30%. So that's that's how we've been able to get better operating margins.

26:50 For those that follow a kind of rocky based profitability metrics, you know, the other thing to to draw your attention to is those higher profits being achieved by a similar sort of asset base or infrastructure base hasn't changed hugely. You know, we've we've invested on it, but the depreciation's offset that. So, you know, we're getting better return on capital employed. And again, as we move forward, you know, we we believe there's scope to get further operating margins in in the next couple of years as well.

27:22 Okay. So I think, again, in terms of cash, it's all it's all positive, it's all moving in the the right direction. So operating cash is up about 30 percent. We've had a similar level of investment. So, know, we are we are a CapEx business. You know, we put infrastructure on the ground, so we're always gonna have that element of CapEx. So the the CapEx spend's been about 4,000,000, in terms of PPE. We we, that's normally relatively consistent. So it will cost us round about £10,000 of of CapEx for every thousand pound of recurring revenue. But, you know, we'll we'll get that recurring revenue over a a five year period. So that's the kind of typical typical payback and the intangible assets. So as Gordon says, we're still building product. We're still building prox and exchange cloud, and that's been a similar level to last year at 2,900,000.

28:12 That's largely our internal software development team, we've built, and and, you know, that'll be relatively consistent in the next in the next year or so as well. It's been a good period in terms of paying down debt. So we we paid down about 2,400,000 of of of debt, term loan and asset finance. So we're actually only left with just over £1,000,000 of asset finance. So we've, you know, tidied up the balance sheet quite a bit over the year, and and, ultimately, that's allowed us to end the year 2,200,000 up in terms of of of net cash. So, know, we're we're we're generating cash now, which, again, is a position that we've not been in for the last last few years. Again, I think in terms of, you know, what we're gonna do for the current year, it it's kinda gonna be similar. Right? We're we're we are we are investing, but also have an eye on operating margins.

29:06 So things like security, we, you know, we it's obviously key for us. We don't we don't scrimp on security budgets. We got SOC type one this year, and we're gonna, invest in SOC type two for proximity exchange cloud. So that's that's part of this year's investment. Again, we will continue to invest in infrastructure, although we have, you know, just under £2,000,000 of stock. So, you know, so that should, you know, fulfill part of the pipeline this year. We will continue to develop proximity and exchange cloud, you know, backed by customer demand feature functionality with that with that development team. Gordon's talked about the analytics offering for for machine learning, and it will be incremental headcount. So maybe, you know, be more than last year, but we're budgeting 10 to 15 heads. No more than that. But on a call of an extra 10,000,000, which is the the consensus forecast, this year, you know, 10 or 15 heads.

30:03 We we we still enable us to deliver those better operating margins. So ultimately trying to balance investment, and, cash generation with margin improvement is is is where we're at as a business.

30:17 Over to you, Gordon. I think you might be on mute, Gordon. Yep. Still mute? Yep. Can you hear me now? Sure. Yeah. Sorry, folks. Jeez. Okay. So thanks, Fraser. So just to kinda reiterate some of the the the key messages we've we've talked about. So, historically, we've been relatively consistent, as we said, you know, 20 to 30% top line growth. Business is is cash generative. And, you know, as Fraser said, we're gonna concentrate and then, you know, ensuring that continues and increases.

31:03 We've now got a lot of strategic partnerships, strategic references, and case studies that we can utilize to you know, when new clients expand existing clients. And, you know, cloud technology and then in capital markets is is is not not actually showing any signs of slowing down. There's still a lot of workloads that will eventually move to the cloud both in the trading and, you know, front and back office of trading environments. Right? So so we're in a good we're in a good market segment that's growing and and will continue to grow for for a long time. Yeah. So what are we what are we working on in 2025?

31:44 Pipeline's strong. It's stronger than it's ever been. I think having been burnt a little bit in the past year, I mean, exchanges and banks take a long time to do anything quite rightly because it's big decisions, big stuff. The focus is to get the, you know, the the pipeline converted into orders and deployments, and the pipeline is way strong enough that, well, you know, we can convert it then. We're more than happy with the the the numbers that are out there in the public domain. So, you know, we continue to build feature function into Exchange, a proximity cloud. We continue to automate the private cloud part of the business rather than continually throw people at it. And, you know, we we have a big project on automation and how we streamline and make our deployments and our security and our patching and our maintenance more efficient, that drives down cost, right, and keeps cost under control. So and and, you know, we are investing in the AI ML side of the analytics platform.

32:47 And doing all of that, you know, is is to grow not only the the the top line, but the bottom line. Right? We are now we're around twelve years. It's it's time to generate profit, generate cash, which we've shown we can already do. So I look again, as I say, a lot of workloads in capital markets still running house, still got a long way to go. We work with a number of banks who are just beginning their cloud journey, so it's a good it's a good area to be working on. There's significant opportunity through Exchange Cloud to become the de facto standard here. Right? And by doing that, the size and scale of the business by doing that alone, the size and scale of the business will change dramatically.

33:39 So we're profitable, generating cash. You know, we've got, you know, a strong pipeline ahead. We've got, you know, a lot of next year's numbers already delivered because of the recurring revenue model, and some of the deals that we signed last year already hit the numbers this year. So, you know, we are we've got good visibility of the year ahead. Been a huge increase in the ExchangeClient pipeline, and that will continue. You know? So there's some exchanges on the late stage of the journey. There's some, you know, early, some middle. So we'll continue to fill that sales funnel as much as we can. And, yeah, I just say we've we've got good visibility on the the '25 full year '25 number.

34:26 Alright. So that is all of the slides. Perfect. Gordon Fraser, thank you very much indeed for your presentation. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the top right corner of your screen. While the company take a few moments to read those questions submitted today, I would like to remind you that a recording of this presentation along with a copy of the slides and the published q and a can be accessed via our investor dashboard. I'm Gordon Fraser. As you can see, we have received a number of questions throughout today's presentation. And if I may now hand back to you and kindly ask you to read out the questions where appropriate to do so, and I'll pick up from you both at the end. Thank you. Yeah. Thank you. There's a lot of questions, so I'm not quite sure if we're gonna be able to get through them all, but we'll we'll try our best. There's some that I'm not gonna be able to answer either.

35:12 So first one, if BEEKS were to win a major contract with highly prominent exchange outside of The UK, might you be tempted or pressurized into looking at a listing on that exchange? Nope. Is it changing changing exchange listing is not not something that we're considering. So GSE disclosed on a recent webinar that BEEKS will be providing equipment with refreshes within two to three weeks for customers who, you know, You know, I quite understand that question. No. Like so the the GSE contract is four to five year term after the initial four to five years. Then if GSE sign another four to five year extension, then we will do a full hardware refresh of the of the clients that's underneath it.

36:00 But it's not a weekly thing. It's not a no. It's not. So yeah. So, you know, the hardware that the cost of the the the cost of the hardware that is deployed for GSE is already costed in for the the the life cycle of the contract. If they then extend for another four to five years, then we have another set of hardware costs on that refresh on that refresh of the contract. Well, that makes sense. Will you need to increase technical and support headcount to service solution exchange cloud one? No. No. I mean, we've got centralized support function that still has scale on it. So, no, I think we we don't there's not gonna be a material increase to the to the headcount to do that.

36:49 I'd like again, similar question, you know, what's additional headcount if we're seeing additional exchanges? How many additional staff? And do you have difficulty recruiting people? So as I said during the the presentation, we are trying to automate. Right? We you know, our head count over the last two years has been kinda flattish, Fraser. It's not hugely increased, has it? Not the last year. Two, three years ago is is when we did the the expansion. Yep. So but, I mean, I you know, listen. If you go and sign another three, four exchanges, there will be an incremental increase in headcount, but it's not like we need to double the staff count. We are we are investing in automation and ways to take people out of the equation, right, from deployment to support maintenance.

37:38 So we don't have a we don't have a material headcount jump in the imminent future. You have next question is you have different large markets with large potential. How do you split your sales resources between Exchange Cloud and Private Cloud? That's a good question. So we've kinda got two discrete sales teams. We've got what we call an internal sales team, and they really look at public private cloud. And then the the the folks that we've talked about, so Adam, Jerry, myself, Zach, we work in proximity and exchange cloud, more so exchange cloud myself. I tend to be involved at the the later stages of some of the bigger discussions. So so, yeah, that that's a split. Kinda internal team that does the small stuff and then the face to face folks in country or in territory that that do the larger relationship type selling.

38:33 Do you have the right senior sales hire to capitalize on these opportunities? So sales resources, you know, I I'm a commercial guy. It's my background. Right? So I never wanted to have a massive sales force to to manage. We've got a good team. You know, we're looking to add maybe one more, and then I think we're bit right sized. And once we sign the exchange, it's it's up to them to sell it to their clients. So we effectively get an indirect sales team that is owned and managed by the exchange. So it's a good model. So AI AI question. So AI is a growing trend in enterprise IT. How can you rate this trend? So I think we've kinda answered it. Right? We are we are looking at a an at the edge AI real time analytics package. Right. And I'll I'll we get that for the moment.

39:32 Can you explain what a large exchange can do in revenues at maturity? Is pricing still milling the cabinet? Is it realistic that a large exchange at maturity could have 50 racks? Yes. And all the above. It's roughly a million dollars per cabinet over the four, five years, and there's no reason why a large exchange couldn't have 50 cabinets within five whatever, four or five years. Next question. What is the outlook for future revenue growth, particularly in full year '25, and how much comfort in terms of backlog or sales payment you have? And, again, I think we talked about it. Right? Without going into things I can't put in the public domain or that that's that's confidential and market sensitive. We got a recurring revenue model. We had deals we're seeing last year that we'll deliver into this year. So I think we've we've said that we're we've got good visibility for the year ahead.

40:30 Question from Paul. Can you talk about the size and scale of the payments business opportunity relative to other business streams? Listen. We do have it in payments. We've got a couple of larger clients in payments. It's not an area that we can differentiate differentiate that much in. So it's not gonna be capital markets trading infrastructure is always gonna be our main aim of payments. Payments is is is nice and interesting, but it's not the core of the business. Never will be. So next question from Steven. If BEEKS offers a point to point immediate service for exchanges, what did the exchange do to do before BEEKS came along, or is it just white label aspect that's open to exchange? So a good question, actually. So people an exchange would sell you data center space in the data center, but that's just an empty rack. So they will charge you anywhere between 3 to $10,000 a month per for power and space in their data center, and then the client had to go and do it all themselves.

41:44 So they they had a service offering. It's called colocation. Right? But it's it's it's not cloud. So and all exchanges will continue to offer colocation because there's there's certain clients like old, you know, tier one HFTs that will never use our platform. So exchanges will never stop offering colocation even even though they the license exchange cloud. It gives clients a choice between the two. From Tim, how many exchanges are currently talking to and how many in the final discussions? Can't go into that, I'm afraid, Tim. Stuart from that. So they uninitiated what's the origin of the company name. Don't know if I could ever I wouldn't say that publicly. No. I don't know.

42:33 Do it. Find out yourself. It's not difficult to figure out. What is expected launch timeline for the Mystic Exchange group? I can't I wish I could go into more detail, but we're under NDA, so I can't I'm afraid. Just you know, you need to look out for announcements as of when. ARR was 20,000,020 million a half year with an additional 500 k added in August. Annualized growth of 10% from half year. Do you see that rate of growth increasing through the year? Yes. Easy. I mean, it always does make our, you know, annual run monthly run rate is the key the key metrics and, you know, increases almost every month. Yeah. So that that's the one that the the the annualized committed that's grown up on just under 20% for the year.

43:26 Fraser, do you wanna take the next one, Alan's question about Yeah. I think he's asking about overheads. So so staff, I think the question is what's your overhead cost? So staff cost about 7.4, of yeah. That's the majority of our admin expenses and our our p and l. So the total is 9.7 and the 7.4 staff. So that's the that's the biggest element. The rest is things like travel, you know, the cost of being on aim, audit fees, legal fees, all those types of overhead costs. Andrew geez. We've got more questions. Appreciate you can't be specific. Would you be disappointed if one of the large exchange claim contracts mentioned that the results was not awarded before the calendar in the calendar year? I'm not gonna answer that. I've answered things like that before, then I get slotted for it. Like, a year down the line, Gordon said this, so I'm not gonna answer that.

44:22 What why with potentially a couple more exchanges signing, what then stops you being bought by by hyperscaler? I don't listen. I I don't think a hyperscaler is an exit. Right? Maybe I don't I doubt it, but too small. I mean, I I think we've always been honest. There'll be an exit at some point. Still a way away, but, whether it's a hyperscaler, I I would doubt more likely private equity. Are there specific factors in South Africa driving GSE adoption that may not be present elsewhere? As I kinda cover, it's difficult to do business in South Africa if you're not a South African com company. Right? You don't have an entity. Customs is difficult. It's it's a difficult I would you know, even South Africans would admit it's a difficult place to do business in. So but a lot of that is just an emerging markets problem. Right? So it's not I wouldn't say it's specific to South Africa. I think it's more genetic to emerging markets where, you know, West certainly western organizations don't have the the infrastructure they do in Europe and America.

45:28 Jesse has been a real success. We don't hear much really in to what extent is the partnership been a success. So you gotta remember the partnership is, you know, it is NYSE. Right? But it's it's ICE Global Network, so it's a service provider part of NYSE. We continue to have discussions with, you know, NYSE on on other things. It was never gonna be massive for us. It's not like, they don't they don't enable it in an IZ data center. It's it's third party data center. So, you know, it's you know, as with the ads, it's it's we we make a a bit of money out of it, but we continue to have different you know, other discussions with the IC that might be more material going forward. Andrew can't answer the question about the exchange rate contract we're on the NDA for, I'm afraid.

46:26 What are the key risks the company anticipates in the coming financial year in terms of market regulatory or competitive challenges? I mean, that depends what the way you're asking. Like, you know you know, competitive, we we always keep an eye out. Right? But we don't see we don't see anyone kinda starting the journey to try and compete in the Exchange cloud space as of yet. Maybe that will change. Regulatory, we don't you know, we we're not that highly regulated as a as a service provider, cloud service provider. Right? We we've invested a lot in SOC two and security and a load of other certifications to allow us to kinda get through and, onboarding. But, you know, that that's a difficult question to answer, so I'll move on.

47:15 Thierry, do you see potential multicast outside the stock no. Not really. Outside the exchange vertical. No. Not really. Yeah. I mean, multicast is not a new thing. It's been around forever. It's just it's very, it's very suited to to financial markets. Given the latest referenceability for exchange, credible pipeline close fast and the sales conversion may be faster. I like the question, George, and we do hope so. We we are seeing signs of the sales cycle shrinking. They will still be long because exchanges are exchanges. Right? And banks are banks. There is certain process and procedure that we just had to follow to. But the more we get, the more we become a standard, the easier it becomes. How long have you had have you got how long have you left?

48:06 I don't know if I can go through and fix all of these kind of questions are repeated. I think, Ian's asking if we, could be our it could be our gate of existence to innovate in software financial markets and the 2.9 increase in intangible assets come off the bottom line. I think that's should we expense our development costs? We we follow the accounting standards on that. If we are you know, we're building a product that we've got useful economic life out of, we are entitled to do that. And I think that's that's the way we'll continue to do it. How many so one for Steve. How many new exchanges can be added in any one year? I mean, I would say three to four. Like, that that that feels like a because we we you know, you've got to continue supporting and growing the existing ones. Right? So, three to four a year, and that's that's a you know, that that'd be more than happy if that would do not be a year.

49:24 One from Matthew. Could you comment on customer consultation? I mean, we do have we have a very large client, a very large ISV, more of a strategic partner than a client. We spend a lot of money with them. They spend a lot more money with us. That revenue stream from them is probably capped at the moment. Like, they've they've got all of the banks and brokers on the on a platform that they're probably gonna get. So, you know, you know, I will I probably fall to below 20% of revenue over the next year in a bit as we continue the revenue growth in other other areas. Last one.

50:13 Your growth rate across your growth rate should accelerate your growth rate should accelerate driven by growth across three product lines. Is there a ceiling to the growth rate that you can achieve? Is there a ceiling to the growth rate we can achieve? No. No. Answer is simply like that. You know, if we if we have to grow faster, we will hire people. We will buy more infrastructure. We will do what we need to do. Right? So there's no there's no natural clip. So that's that's most of the folks. There's a few more, but I've kinda repeated repeating earlier ones and ones that are, as I say, I cannot can't answer due to NDAs and all sorts of stuff. So I think that is us.

51:03 That's great, Gordon Fraser. Thank you very much indeed for addressing all those questions for investors today. And, of course, the company can review all questions submitted today, and we will publish those responses on the investment company platform. But before we direct investors to provide you with their feedback, which I know is particularly important to you and the company, Gordon, could I please ask you for a few closing comments? Yep. Of course. So listen. Thanks for joining, folks. Thanks for listening to us again. And, you know, I think we've had a a good year. We you know, the forecast suggests we're gonna have to have another record breaking year to get there. We've got good visibility. The business is doing well. We've got a great team, strongest team we ever had, some real good customer referenceability and and a pipeline that a few years ago, we would have died for. Right? So we're in a good place, and, you know, we've got, hopefully, another good year ahead. And, yeah, we look forward to it.

51:57 Fantastic. Gordon Fraser, thank you once again for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback in order that the board can better understand your views and expectations? This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of BEEKS FINANCIAL CLOUD GROUP PLC, we would like to thank you for attending today's presentation, and good afternoon to you all.