Bytes Technology Group, which is still reeling from the ouster of its former boss, has reported double-digit growth and proposed a special dividend as it continues to benefit from strong demand for its services.
Gross invoiced income for the year ended February increased 26.7% to £1.8bn (R42.6bn), compared to £1.4bn previously.
Growth has been attributed to “strategically important” contract wins in the public sector, most notably with the UK’s National Health Service (NHS) and HMRC, as well as continued demand from corporate customers.
Revenue was 12.3% higher at £207m for the period, while gross profit rose 12.5% to £145.8m.
The group distinguishes between revenue and gross invoiced income based on gross income billed to customers versus revenue which is recognised on a net basis depending on whether the company acted as an agent or principal in delivering work for a customer.
Headline earnings per share rose 15.8% to 19.55p, while closing the period with cash of £88.8m, up from £73m. A final dividend of 6p per share and a special dividend of 8.7p have been proposed.
Market players cheered the earnings report with shares trading 3.3% firmer at R136.00 by 1.35pm on Thursday. Bytes is listed in Johannesburg and London.
In the light of the company’s continued strong performance and cash generation, the board considered it appropriate to propose a cash return to ordinary shareholders with a special dividend of 8.7p per share, equating to £20.9m, it said.
“I am very pleased to report another set of positive results for BTG, with a 12.2% increase in adjusted operating profit, driven by contributions from all areas of our business,” CEO Sam Mudd said.
Mudd took over as CEO of Bytes in early May after the ousting of long-time boss Neil Murphy earlier in the year due to a share trading scandal.
In February the UK firm, which was spun out of Altron in 2020, said Murphy had notified the board that he had made a number of trades in the company’s shares that had not been disclosed to either it or the market as required by listing rules.
Mudd has been running the group as interim CEO since then.
“Despite the challenging economic climate over the past year, our customers have continued to invest in their IT needs,” she said.
Gross invoiced income grew 26.7% as the group expanded its client base in both the public and corporate sectors and “increased our share of wallet” among existing customers, she said.
“Our strong relationship with Microsoft enables us to capitalise on exciting opportunities such as Copilot, Azure Virtual Solutions, and Business Apps. With continued demand for cloud adoption, backup, storage, and security solutions, these will be our key focus areas in 2024/25,” she said.
Bytes, valued at R33bn, is the biggest reseller of tech giant Microsoft’s products in the UK and is chasing a market of 42,000 private sector companies, which collectively spent about £105bn on IT in 2019.
The group increased headcount in the year by 13.7% to 1,057 to meet high levels of customer demand, with a focus on bolstering sales and service delivery teams, including an increase of sales heads by 72.
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