Shares in Bytes Technology Group rose on Friday after it said it is to embark on a share buyback programme to return capital to shareholders.
The company’s share price jumped 8.4% to close at R93.99 on the JSE on Friday, taking its gains to 15% in the past month, though year to date it is down 4.7%.
The software, security, cloud and AI services specialists said on Friday it would repurchase ordinary shares of 1p each up to a maximum aggregate consideration of £25m.
Bytes said given its strong balance sheet position and prevailing share price, the board believed it would be beneficial to return capital to shareholders through a share repurchase. The purpose of the programme is to reduce Bytes’ share capital and the company intends to cancel all the shares purchased.
It has entered into an agreement with Numis Securities and Peel Hunt to purchase Bytes’ shares in two equal tranches of up to £12.5m each. Deutsche Numis and Peel Hunt will manage the purchases on a discretionary basis, purchasing shares within certain preset parameters and making their trading decisions independently of Bytes.
The purchase of shares will be carried out on the London Stock Exchange and is expected to be completed during the second half of 2025.
In July the company, which is a former Altron subsidiary, saw almost a third of its value wiped out on the stock market as the technology group highlighted reduced tech spending by corporate customers.
Bytes said on July 2, ahead of its annual general meeting, that it expected first-half gross profit to be at a similar level to that of 2024 and operating profit to be marginally lower, followed by more normalised growth in both metrics in the second half. Spooked by the statement, shares in the UK firm fell 29.46% that day, trading at their lowest levels since April 2023.
In a statement issued before the AGM, CEO Sam Mudd said the group was navigating a more challenging macro environment.
Trading in the first months of the year was affected by the environment, leading to some deferral of customer buying decisions, particularly in the corporate sector.
This business is important for Bytes. The group 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, which is listed in London and Johannesburg, serves 6,000 corporate and public sector customers, many of which have had long relationships with Bytes. With Mudiwa Gavaza
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