Bytes Technology, the London and JSE-listed specialist software, security, artificial intelligence (AI) and cloud services company, extended its track record of double-digit growth in the six months to August 31 and has made a good start to the second half of its financial year.
The interim dividend was raised 12.5% to 2.7 pence (R0.63) from 2.4 pence. The share price ratcheted up 5.6% to R110.90 on the JSE yesterday afternoon, putting the price up 42.5% over a year. Headline earnings a share increased 17% to 10.60 pence.
“The economic backdrop remains mixed. We have continued to see strong demand from our corporate and public sector customers for security, cloud adoption, digital transformation, hybrid data centres and remote working solutions,” CEO Nigel Murphy said in a statement.
This had allowed Bytes to invest in its business and it was able to grow its headcount by 10% to more than 1 000 people for the first time, he said.
The company was also well placed for the rest of the financial year after a good start to the second half, he said.
Cash increased 44.4% to £51.7m. Half-year cash conversion of 48.7% was in line with expectations, reflecting cash flow seasonal timing and weighting to the second half. The rolling cash conversion for the year to August 31 was 107.2%, meeting an annual target of 100%.
Ninety-eight percent of gross profit came from customers that traded with the company last year (97%), at a renewal rate of 113%. Operating profit increased 12.1% to £30.6 million (£27.3m).
“A shift to AI products will be one of the defining trends in the IT services sector, and we are well-placed to capitalise on that opportunity. We stand to benefit from our long-standing relationship with Microsoft, whose Copilot product we are trialling and will be available more widely in the near future. We are also looking forward to working with our other vendor partners that are developing AI software tools,” said Murphy.
Gross invoiced income in the six months increased by 37.6% to £1.08 billion, exceeding £1bn for the first time. This growth was underpinned by some large contract wins in the public sector and by continued demand from corporate customers.
“Strong levels of demand for security, cloud adoption, digital transformation, hybrid data centres and remote working solutions have underpinned the group’s continued growth in the first half,” said Murphy.
In April, Bytes acquired a 25.1% interest in Amazon Web Services (AWS) partner Cloud Bridge Technologies, to bolster its multi-cloud strategy.
BUSINESS REPORT