Positive FY update: Having cake, eating IT

The FY trading update informs us that with a 40% FY26 Adj. EBITDA margin, Beeks once again distances itself from its international IaaS peers and the wider UK tech group, which average 33.9% and 22.1%, respectively. As CEO Gordon McArthur reminds, Beeks ‘now has four differentiated offerings’ and enjoys ‘a strong pipeline across each’. FY27 has begun well, a point telegraphed by record £34m ACMRR. Beeks’ financial model matured in FY26: Proximity Cloud, Exchange Cloud, Public/Private Cloud were joined by Market Edge Intelligence. All are revenue generating; all are selling globally. The only wrinkle in the update is net cash, £0.6m below our initial estimate. This trailed the ‘significant upfront infrastructure investment…to support the new Exchange Cloud deployments’, several of which are now cash flow positive. In this, Beeks follows the wider IaaS industry, which, to reflect the AI imperative, is spending to update infrastructure and the customer offer. Beeks is a long-term secular growth investment play, with a ‘best of breed’ financial model, a strengthening moat and is executing on a global TAM. The debut of Market Edge Intelligence gives its financial model a new rung with software KPIs. In our view, none of this is reflected in a pedestrian 9.3x FY26E EV/EBITDA vs 13x for the IaaS cohort and 10.1x for UK tech peers.

Positive FY update: Having cake, eating IT

SAND debuted last week and has since notched up 38,336 peak concurrent users – a record. As #25 on Steam wishlists, SAND is a major release, coming after six and a half years of development. The launch dovetailed into tinyBuild’s upbeat AGM trading update (18 June), with news of ‘ahead of expectations’ revenue and confidence on delivering 2026 results ‘at least in line with expectations’. Taken together, tinyBuild is delivering on its pipeline with continued sequential momentum, underpinning expectations and with an expanding pipeline (note: Last Harbor). tinyBuild cautions on the challenging macro backdrop but is nurturing pipeline, focused on the back catalogue, and managing cash (low point: summer 2026). As CEO Alex Nichiporchik comments, the company is ‘finally seeing the payoff from the work we’ve put into new IP’. Recoveries are often punctuated by faltering, uneven performance, and wishlists do not turn into unit sales in a straight line, but the Steam ‘tell’ suggests that forecast risk is on the upside. Trading on 7.2x EV/EBITDA, we believe the share price does not reflect the recovery payback: better earnings/better rating.

A line in the SAND: Recovery is on

Beeks has announced three contract wins across its Analytics, Proximity Cloud and Private Cloud offerings, with a combined total value of c.£1.7m. This sits alongside the Market Edge Intelligence contract win earlier this week, a banner five-year contract with a US$4.8m (£3.6m) price tag at an unnamed ‘major global bank’. These contracts offer ‘expansion potential’ across the customers’ operations and Beeks’ customer base, and given the deployment model, Market Edge Intelligence smacks of a ‘land and expand’ bridgehead for new logos. The brace of contracts signals a structural move into a higher gross profit margin world. Recall at interim results CEO Gordon McArthur stated that Beeks entered H2 ‘with strong momentum’ – here is the £5.3m proof point. We trace the core software functionality back to the £4.2m Velocimetrics acquisition (April 2020), a price tag now dwarfed by these contracts. We make no changes to our forecasts as the contracts support FY26 estimates. Our view: Beeks is a long-term secular growth investment play, ‘best of breed’ financial model, with a strengthening moat and is executing on a global TAM. This is not reflected in the pedestrian 8.0x FY26E EV/EBITDA vs 13x for the peer group.

The leader of the pack: Beeks’ £5.3m payday

Fresh from delivering another set of ‘better than expected’ results, tinyBuild’s eight-year franchise Hello Neighbor reached a new all-time peak concurrent user (CCU) count on Steam and shipped c.100k units in one week. The burgeoning recovery in the video gaming sector is at that early stage when recovery is often punctuated by faltering, uneven performance (EPIC has just laid off 1,000 staff). But what if recovery is V-shaped and not a protracted ‘U’? The industry still faces multiple challenges but tinyBuild has rebuilt the business over the past three years and its lead indicators now suggest the recovery is stronger than expected. To be sure, wishlists do not turn into unit sales in a straight line, but this ‘tell’ suggests that forecast risk is on the upside. We review the latest KPIs, recap the financials, explore the key elements of tinyBuild’s recovery playbook and review peer datapoints to understand the wider market context. In all, valuation is the least concern for tinyBuild, harking back to the last three difficult years and giving nothing for recovery, in our view. The shares are idling on an undemanding EV/EBITDA 6.3x, vs sector 14.4x. We believe it’s time for investors to consider ‘a double whammy’: better earnings and better rating. Game ON.

From ‘bankruptcy’ to ‘growth’ in 2026?

Interim results are in line with guidance, and Beeks reiterates FY guidance. H1 FY26 features continued growth, with Annualised Committed Monthly Recurring Revenue rising by 15% Y/Y to £32.80m. The growth cadence is increasing: +5% Y/Y for FY25, +15% Y/Y now. H1 FY26 also reflects the effect of the new Exchange Cloud revenue-share model and timing of the Proximity Cloud wins, which shunts rev/rec into H2 FY26 and reduces H1 revenue to £14.65m (vs £15.79m last year). That leads to lower Underlying EBITDA, -28% Y/Y to £4.12m. Gross cash was £7m vs £7.4m as at 30 June 2025. CEO Gordon McArthur states that Beeks enters H2 ‘with strong momentum and a customer base comprising some of the world’s largest financial institutions, each with significant expansion opportunity.’ Beeks remains a long-term secular growth investment play, ‘best of breed’ financial model, with a strengthening moat and executing on a global TAM, not reflected in the pedestrian 8.3x FY26E EV/EBITDA.

H1 results in-line, FY guidance reiterated

Beeks’ trading update (for the six months to 31 December) is a comforting balm: H1 trading is ‘in line’ and Beeks reiterates FY26 guidance. This follows a busy period of contract wins, uptake at seven stock exchanges globally and a ‘record strength’ pipeline. CEO Gordon McArthur states that Beeks has ‘record levels of revenue visibility’, and the H2 focus is on ‘executing against a strong pipeline’. In H1, ACMRR swelled to £32.8m, and the growth cadence is increasing; +5% Y/Y for FY25, +15% Y/Y now. In these troubled times for the tech sector, Beeks is a long-term secular growth investment play, with a ‘best of breed’ financial model, strengthening moat and executing on a global TAM. In our view, this is not reflected in the pedestrian 9.6x FY26E EV/EBITDA valuation (UK tech 13x).

Trading update: In-line, doing fine

tinyBuild’s FY trading update breathes new life into the share. The company has beaten revenue, EBITDA and cash expectations. In addition, the 2026 pipeline, described as ‘strong’, looks set to usher in a new dawn for the company. It is too convenient to conclude that the positive FY outturn is simply the latest chapter as the wider video games industry ‘slowly climbs out from a deep trough’. Recovery is not guaranteed: Ubisoft’s ongoing downsizing saga illustrates that recovery is a function of a sure-footed management team and an evolved playbook, not simply waiting for the tide. The recovery at tinyBuild has growth momentum. tinyBuild has strong valuation support (EV/Sales a pedestrian 1.1x vs sector 3.5x). For investors, tinyBuild offers the prospect of re-rating and earnings upside through 2026, and beyond.

Breathing new life

Intuitive Investments Group’s final results headline with the significant progress at Hui10 Inc (99%+ of the group’s portfolio). Of the key metrics: a tripling of connected lottery shops to 7,016 from 2,222 last year; registered users to 861.1k in November 2025 from 243.1k in November 2024; lottery transaction value through Lucky World surged to ¥212,630,153 for the 11 months to November 2025, ¥719,663 in the prior year. There are strategic partnerships with China Poly Group and Sinopec Easy Joy, and post period yesterday’s news that UK investment manager Helikon Investments will provide £30m equity funding in staged payments. Net assets increased to £328.04m, though NAV/share saw a slight decrease to 150.3p (from 153.9p). Progressing to paperless lottery operations continues apace, as these results solidly underpin the investment case. Our intrinsic valuation of 1,284p (unchanged following these results) is based on a blended valuation of DCF, FCF and peer review.

FY results show progress on all fronts

The seventh Exchange Cloud contract is the first multi-year, multi-stock exchange contract. The nuam contract, announced 15 December, sets a new industry benchmark by integrating the Santiago Stock Exchange (Chile), Bolsa de Valores de Lima (Peru) and Bolsa de Valores de Colombia under a single market architecture. This becomes Latin America’s first fully integrated multi-country exchange. Once again, we see the revenue share model supporting shorter sales cycles and expanding the Exchange Cloud opportunity. In our view, increased referenceability will help close further pipeline deals. We leave estimates unchanged at this juncture as ‘go live’ is Q3 FY26, with revenue recognition following shortly thereafter. We see Beeks as a long-term secular growth investment play, with a ‘best of breed’ financial model and a pedestrian 10x EV/EBITDA valuation (UK tech 14.1x).

Beeks slays it: First multi-year/multi-stock exchange contract

A blue-riband day for IIG as it signs an agreement with UK investment manager Helikon Investments to provide £30m equity funding in staged payments. With this, IIG has the cash to finance Hui10’s paperless lottery play roll-out. Sir Nigel Rudd, chair of IIG plc, commented that this gives Hui10 the financial resources to deliver at national scale and is a ‘validation of our strategy to invest in platforms with long-term growth potential’. This trails the 4 December agreement with YSEPay to provide Hui10 with a facility to fully cover Hui10’s expected growth in real-time settlement for the Lucky World platform, which addressed working capital requirements. Our view is unchanged: IIG shareholders have a considerable opportunity from the asset-light, cash-generative Hui10 business. Our intrinsic valuation of 1,284p is based on a blended valuation of DCF, FCF and peer review.

£30m equity investment for Hui10

Today’s brace of contracts (£1.9m and £2m) trail two contract wins last week ($1.5m and £2m) – all underscoring the ‘strong start to the financial year’. The contracts are for Proximity Cloud and Private Cloud, so illustrate momentum across the portfolio and the upside potential afforded by each Exchange Cloud installation. With revenue recognition commencing in H2 FY26, the contracts underpin FY26 estimates, which we leave unchanged. Beeks is gaining from industry tailwinds (cloud adoption, compliance, data sovereignty, cybersecurity, sustainability, analytics, payment modernisation, AI in risk management), which have enabled it to carve out a moat as market leader in cloud infrastructure for financial markets and payments. We see Beeks as a long-term secular growth investment play, with a ‘best of breed’ financial model and a pedestrian 9x EV/EBITDA valuation.

Four contract wins underscore momentum

Lucky World lottery transaction value soared to ¥93.3m in the nine months to September 2025, vs ¥554k last year, while UGO Scratchcard sales surged to ¥7.4m, vs ¥4.0m last year. These are the key points from IIG’s latest trading update, for its FY ended 30 September. To put this rampant growth in context, Chinese annual lottery ticket sales grew +7.6% in 2024. Hui10 is making ‘significant’ progress as it digitises the touchpoints to China’s national lotteries, moving them towards paperless play. The roll-out of Hui10’s technology commenced in July, and since then there has been ‘growth across all key performance metrics’. While there is much to do as policy change edges nearer, the opportunity remains substantial and is now more achievable: the Chinese national lottery is the world’s second largest by revenue, at over US$85bn annually in 2024 from circa 100 million of the 1.1 billion Chinese adults. This market gives Hui10 a dramatic scale-up opportunity to grow revenue, earnings and cash very quickly through digitising the Chinese lottery user experience. IIG shareholders have a considerable opportunity from the asset-light, cash-generative Hui10 business. Our intrinsic valuation is 1,284p (prior 969p), based on a blended valuation methodology of cash (DCF and FCF) and peer review.