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BYTES TECHNOLOGY GROUP PLC - Audited preliminary results for the year ended 28 February 2022, proposed final and special dividends

Release Date: 24/05/2022 08:00
Code(s): BYI     PDF:  
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Audited preliminary results for the year ended 28 February 2022, proposed final and special dividends

Bytes Technology Group plc
(Incorporated in the England and Wales)
(Registered number: 12935776)
LEI: 213800LA4DZLFBAC9O33
Share code: BYI
ISIN: GB00BMH18Q19
("BTG”, or “the Group”)

24 May 2022

 Audited preliminary results for the year ended 28 February 2022, proposed final and special
                                           dividends

                    Strong organic growth driven by robust customer demand


Bytes Technology Group plc (LSE: BYIT, JSE: BYI), one of the UK’s leading software, security and
cloud services specialists, today announces its financial results for the year ended 28 February 2022
(‘FY22’).

Neil Murphy, Chief Executive Officer, said:

"This is another record set of results for BTG, with positive contributions from all parts of the business.
During the year we continued to strengthen our market position, by deepening our relationships with
key software vendors and expanding our expertise in areas such as cloud, security and annuity
software and services. These steps enabled us to make meaningful progress against our strategy and
ensure our customers continue to receive the highest quality of service.

“I would like to thank all my colleagues who have done an outstanding job supporting our clients
through the past year. The progress we have made is a direct result of their efforts and would not
have been possible without them. With our growing customer base, strong reputation with key
vendors and focus on sustainable growth, our business remains well placed to deliver against our
strategy and capitalise on the exciting market opportunities ahead.”

Financial performance

 £’million                                     FY22 (year ended     FY21 (year ended           % change
                                                    28 February          28 February       year-on-year
                                                          2022)                2021)

 Gross invoiced income (‘GII’)1                       £1,208.1m               £958.1m             26.1%

 Revenue2                                               £447.9m               £393.6m             13.8%

 Gross profit (‘GP’)                                    £107.4m                £89.6m             19.9%

 Gross margin %                                           24.0%                 22.8%

 Operating profit                                        £42.2m                £26.8m             57.0%

 Adjusted operating profit (‘AOP’)3                      £46.3m                £37.5m             23.6%

 Cash                                                    £67.1m                £20.7m            223.7%

 Cash conversion4                                        131.9%                130.7%
  
 Earnings per share (pence)                               13.72                  8.52             61.0%

 Adjusted earnings per share5 (pence)                     15.46                 13.07             18.3%
 
 Headline earnings per share6 (pence)                     13.72                  8.52             61.0%

 Final dividend per share (pence)                           4.2

 Special dividend per share (pence)                         6.2


1  ‘Gross invoiced income’ (‘GII’) is a non-International Financial Reporting Standard (IFRS) alternative performance measure
   that reflects gross income billed to customers adjusted for deferred and accrued revenue items. GII has a direct influence on
   our movements in working capital, reflects our risks and shows the performance of our sales teams.

2  ‘Revenue’ is reported in accordance with IFRS 15, Revenue from Contracts with Customers. Under this standard the Group is
   required to exercise judgment to determine whether the Group is acting as principal or agent in performing its contractual
   obligations. Revenue in respect of contracts for which the Group is determined to be acting as an agent is recognised on a ‘net’
   basis i.e., the gross profit achieved on the contract and not the gross income billed to the customer.

3  ‘Adjusted operating profit’ is a non-IFRS alternative performance measure that excludes from operating profit the effects of
   significant items of expenditure which are non-recurring events or do not reflect our underlying operations. IPO costs,
   amortisation of acquired intangible assets and share-based payment charges are all excluded. The reconciliation of adjusted
   operating profit to operating profit is set out in the Chief Financial Officer’s review below.

4  ‘Cash conversion’ is a non-IFRS alternative performance measure that divides cash generated from operations, excluding IPO
   costs and less capital expenditure (together, ‘free cash flow’) by adjusted operating profit.

5  ‘Adjusted earnings per share’ is a non-IFRS alternative performance measure that the Group calculates by dividing the profit
   after tax attributable to owners of the company, adjusted for the effects of significant items of expenditure which are non-
   recurring events or do not reflect our underlying operations (‘Adjusted earnings’), by the weighted average number of ordinary
   shares in issue during the period. IPO costs, amortisation of acquired intangible assets and share-based payment charges are
   all excluded in arriving at Adjusted earnings. The calculation is set out in note 30 of the financial statements.

6  Headline earnings per share in the prior year is after deducting £8.1 million of one-off IPO-related costs

Group highlights for the year ended 28 February 2022

-       GII increased 26.1% to £1,208.1 million (FY21: £958.1 million), with growth spread across all areas
        of the business – software, hardware and services – as corporate client demand strengthened
        alongside continued growth from public sector customers.

-       Revenue increased 13.8% to £447.9 million (FY21: £393.6 million).

-       GP growth of 19.9% to £107.4 million (FY21: £89.6 million), reflected strong customer acquisition
        trends across both public and private sectors and increasing gross profit per customer.

-       Gross margin % has increased to 24.0% (FY21: 22.8%) in line with growth in GP exceeding growth
        in revenue

-       Operating profit increased 57.0% to £42.2 million (FY21: £26.8 million); noting that FY21 included
        one-off IPO costs of £8.1 million, whilst FY22 has an increased share-based payment charge
        compared to FY21.

-       AOP which, due to the above, is a better measure of underlying profitability increased by 23.6% to
        £46.3 million (FY21: £37.5 million).

-       Cash at the year end was £67.1m (FY21: £20.7m) reflecting the growth in profit and the high cash
        conversion rate of 131.9% (FY21: 130.7%)

-       Earnings per share increased 61.0% to 13.72 pence (FY21: 8.52 pence).

-       Adjusted earnings per share increased 18.3% to 15.46 pence (FY21: 13.07 pence), which the
        Board believes is a more representative measure than basic earnings per share as it removed the
        impact of last year’s IPO costs, amortisation of purchased intangibles and share-based payment
        charges.

-       The Board is pleased to propose a final dividend of 4.2 pence per share and a special dividend of
        6.2 pence per share, which if approved by shareholders will both be paid on 12 August 2022 to
        shareholders on the register as at 29 July 2022.

Proposed dividends

As stated above, the Group’s dividend policy is to distribute 40% of post-tax pre-exceptional earnings
to shareholders. Accordingly, the Board is pleased to propose a gross final dividend of 4.2 pence per
share. The aggregate amount of the proposed dividend expected to be paid out of retained earnings
at 28 February 2022, but not recognised as a liability at the end of the financial year, is £10.1 million.
In light of the company’s continued strong performance and cash generation, the Board also
considers it appropriate to propose a cash return to ordinary shareholders with a special dividend of
6.2 pence per share, equating to £14.8 million. If approved by shareholders, the final and special
dividend will be payable on Friday, 12 August 2022 to all ordinary shareholders who are registered as
such at the close of business on the record date of Friday, 29 July 2022. The salient dates applicable
to the dividend are as follows:

    Dividend announcement date                                    Tuesday, 24 May 2022
    SARB approval for the special dividend to be obtained by      Tuesday, 19 July 2022
    this date
    Currency conversion and South African (SA) tax treatment      Friday, 22 July 2022
    announcement released on SENS by 11:00
    AGM at which dividend resolutions will be proposed            Tuesday, 26 July 2022
    Last day to trade cum dividend (SA register)                  Tuesday, 26 July 2022
    Commence trading ex-dividend (SA register)                    Wednesday, 27 July 2022
    Commence trading ex-dividend (UK register)                    Thursday, 28 July 2022
    Record date                                                   Friday, 29 July 2022
    Payment date                                                  Friday, 12 August 2022

Additional information required by the Johannesburg Stock Exchange:

1.     The GBP:ZAR currency conversion will be determined and published on SENS on Monday, 18
       July 2022.
2.     A dividend withholding tax of 20% will be applicable to all shareholders on the South African
       register who are not exempt.
3.     The dividend payment will be made from a foreign source (UK).
4.     At Tuesday, 24 May 2022, being the declaration announcement date of the dividend, the
       company had a total of 239,482,333 shares in issue (with no treasury shares).
5.     No transfers of shareholdings to and from South Africa will be permitted between Friday, 22 July
       2022 and Friday, 29 July 2022 (both dates inclusive). No dematerialisation or rematerialisation
       orders will be permitted between Wednesday, 27 July 2022 and Friday, 29 July 2022 (both dates
       inclusive).

Current trading and outlook
After a successful FY22 with a continuation of double-digit growth across key financial metrics, the
business carries strong momentum going into FY23. We have already made a good start in this new
financial year, although we remain mindful of the domestic and global macroeconomic pressures. Our
successful strategy of acquiring new customers and then growing our share of wallet, building on our
strong vendor relationships and the technical and commercial skills of our people, makes us confident
that the Group is well positioned for the remainder of the financial year, despite current macro-
economic uncertainties.

Analyst and investor presentation
A presentation for analysts and investors will be held today via webcast at 9:30am (BST). Please find
below access details for the webcast:

Webcast link:
https://event.on24.com/wcc/r/3782892/0FC8CC8B04493B351E5B86FCC0875BED

A recording of the webcast will be available after the event at www.bytesplc.com.

The announcement and presentation will be available at www.bytesplc.com from 7.00am and 9.00am
(BST), respectively.

Enquiries


Bytes Technology Group plc                                                 Tel: +44 (0)1372 418 500
Neil Murphy, Chief Executive Officer
Andrew Holden, Chief Financial Officer

Headland Consultancy Ltd                                                   Tel: +44 (0)20 3805 4822
Stephen Malthouse
Henry Wallers
Jack Gault

Forward-looking statements

This announcement includes statements that are, or may be deemed to be, ‘forward-looking
statements’. By their nature, forward-looking statements involve risk and uncertainty since they relate
to future events and circumstances. Actual results may, and often do, differ materially from forward-
looking statements.

Any forward-looking statements in this announcement reflect the Group’s view with respect to future
events as at the date of this announcement. Save as required by law or by the Listing Rules of the UK
Listing Authority, the Group undertakes no obligation to publicly revise any forward-looking
statements in this announcement following any change in its expectations or to reflect events or
circumstances after the date of this announcement.

Short-form announcement

This short-form announcement is the responsibility of the directors and is only a summary of the
information in the full announcement and does not contain full or complete details. Any investment
decision should be based on the full announcement that has been published on SENS
https://senspdf.jse.co.za/documents/2022/jse/isse/BYIE/FY22_SENS.pdf and is also available on our
website https://www.bytesplc.com/. The full announcement is also available at our registered office for
inspection, at no charge, during office hours. Copies of the full announcement may be requested by
contacting Headland Consultancy on telephone: +44 +44 (0) 20 3805 4822 or email:
bytes@headlandconsultancy.com

About Bytes Technology Group plc

BTG is one of the UK's leading providers of IT software offerings and solutions, with a focus on cloud
and security products. The Group enables effective and cost-efficient technology sourcing, adoption,
and management across software services, including in the areas of security and the cloud. It aims to
deliver the latest technology to a diverse range of customers across corporate and public sectors and
has a long track record of delivering strong financial performance.

The Group has a primary listing on the Main Market of the London Stock Exchange and a secondary
listing on the Johannesburg Stock Exchange.

Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)

Date: 24-05-2022 08:00:00
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