Glasgow-based Beeks Financial Cloud has posted a 46 per cent increase in interim revenues and declared its prospects “never more promising” despite a fall in profitability.

The company, which supplies technology that speeds up online trading in financial products, generated revenues of £7.7 million during the six months to the end of December following the introduction of its new Proximity Cloud product for large organisations. Since its launch in August, Proximity Cloud has secured three multi-year contracts with a total initial value of more than $5.2m (£3.8m).

However, underlying profits fell by 18% and at the pre-tax level Beeks made a loss of £270,000, compared to a profit of £500,000 in the same period a year earlier. Chief financial officer Fraser McDonald said the decline was the result of investment in Proximity Cloud and its next iteration, Exchange Cloud, which is due to launch in the next few months.

“Myself and [chief executive Gordon McArthur] are not sitting here worrying about underlying profitability because the business we are in is not particularly price sensitive,” Mr McDonald said. “We’ll be second-half weighted again as we typically are, and quite a few deals [to be announced in February] will land this side of the financial year so they will come with additional revenue and profit.”

He added: “As we deliver on some of these big contracts, that is when the margin will start coming up again.”

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AIM-listed Beeks, which also operates an international network of 22 data centres, said the new products will considerably increase its addressable market.

Proximity Cloud is a single-use platform that banks, brokers or investment managers can use for their own purposes without being hosted in a Beeks data centre. Exchange Cloud is the next step up in that it allows multiple organisations to use the same infrastructure.

“Version two is still the same underlying product, but we have tailored it to exchanges,” Mr McArthur said. “A lot of the exchanges we have been talking to, some of the bigger equity exchanges around the globe, they are looking for a cloud service they can sell to multiple of their own clients.”

The company has completed a planned move from its former offices in Hillington to new headquarters near Braehead where it currently employs 96 people, nine of whom have been hired since the start of the new year.

“That is another reason for the short-term pressure on margins,” Mr McDonald said. “We have grown a lot – headcount has doubled over the last 18 months.

“A lot of that is in the product development area, so we have got almost 30 developers now building out these products which is a big focus and where a lot of the opportunity lies.”

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Working with the University of Strathclyde and Glasgow Caledonian University, Beeks has set up its first formal graduate recruitment programme which is expected to initially enrol about half-a-dozen software developers. Mr McDonald said the new headquarters with superior amenities will allow the company to better compete against major global banking groups and other employment rivals based in the city.

Though the new headquarters has space for up to 200 staff, the pace of expansion is expected to be more sedate than in recent months.

“It will probably be steady,” Mr McDonald said. “We are at the kind of level now that we will be adding staff as revenue grows. Not major recruitment drives, but slow and steady growth.”

Mr McArthur, who founded Beeks as a three-man operation in 2010, said the company is on course for record trading in the third quarter with more than $8.3m in total contracted business to date. Shares in Beeks, which joined the AIM market in 2017, closed yesterday’s trading 1.5p lower at 144.5p.