Shares in Bytes Technology Group shot up almost a tenth on Thursday as the company reported a strong trading performance in the first half, boosted by demand for cloud computing, cybersecurity and artificial intelligence (AI).
The group, which is one of the UK’s leading software, security, cloud and AI services specialists, said gross invoiced income and adjusted operating profit growth was “comfortably in the double digits”, at about 13.5% each.
Gross profit growth was about 9% for the half year to end-August, it said in a trading update on Thursday. Its net cash position at the end of the first half was £71.5m after paying £35.3m of final and special dividends in the period.
“Cash conversion in the first half reflects our normal weighting to the second half, with strong cash conversion expected for the full year,” it said.
“We delivered a strong performance in the period and I am grateful to our teams for their efforts. We remain confident in our growth strategy and believe we are well positioned to benefit from the structural demand drivers we see in our markets, including cloud computing, cybersecurity and AI,” CEO Sam Mudd said.
The group will publish its half-year results on October 15.
For the year to end-February, the group reported double-digit growth and proposed a special dividend as it continued to benefit from strong demand for its services.
Gross invoiced income for the year to end-February increased 26.7% to £1.8bn, which the group attributed to “strategically important” contracts secured in the public sector, most notably with the UK’s National Health Service, as well as continued demand from corporate customers. Revenue was 12.3% higher at £207m.
In the light of the company’s strong performance and cash generation, the board proposed a special dividend of 8.7p a share, equating to a total payout of £20.9m.
Mudd took over as CEO of Bytes in early May after the ousting of long-time boss Neil Murphy earlier in 2024 due to a share trading scandal.
In February the 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 it or the market, as required by listing rules.
The company’s share price rose the most since June 2023, up 9.53% to R120.14.
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