7:59 cut – BKS

Beeks Financial Cloud – FY Results

I have wrote about Beeks in the past, in particular a piece in June where I expressed concern over their ability to meet FY 2020 forecasts.

Today’s FY 2019 figures are unfortunately and (given they had been guided downwards throughout the year) somewhat surprisingly a small miss:

	Revenue (£m)	Adj. EPS (p)
Progressive (May)	7.51	2.68
Actual	7.35	2.58

Cenkos also cover Beeks and were predicting still higher revenue and especially EPS in their 23rd July note. One word of caution: I have 3 separate figures (Beeks, Progressive, Cenkos) for actual FY 2018 EPS so I cannot be sure the above are on the same basis.

The increase in dividend is also far behind expectations – technically the final dividend has been halved since last year, although the total dividend is ahead. This may imply weaker than expected cashflows, or merely reflect the cash acquisition of CNS.

The good news is that the ACMRR is stronger than I expected [edit: No it isn’t – I hadn’t adjusted correctly for recent acquisitions].

It is important to remember that, taken in isolation, these are an excellent set of results that continue a long run of high growth going back to well before the company was listed. However they do not measure up to the consensus forecasts or investor expectations implied by the current share price. What concerns me most is that there is no mention (that I have seen) that they have missed expectations in today’s report, or in the report they have paid Progressive for.

I will be looking at the 2020 forecasts in more detail later today, but in my initial view is that Progressive’s FY 2020 forecast of £10.7m revenue issued today has no credibility.

I do not hold and I expect to see a significant further fall in the share price this morning.