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Bytes Technology Group's Share Price Slumps Amid Adjustments

Strategic Insights

— 1 min read

Bytes Technology Group, a UK software, security, cloud, and AI services company with a secondary listing in South Africa, saw its share price plummet over 10% on the Johannesburg Stock Exchange (JSE) Tuesday after reporting a 7% drop in operating profit. Despite this, the company raised its interim dividend by 3.2% to 3.2 pence. The share price has been struggling, trading at R85.30 around midday, which is 22.6% lower than the R110.16 it traded at a year ago.

Key Takeaways:

  • Bytes Technology Group's operating profit dropped by 7% as it navigated changes to Microsoft partner incentives and adjusted to a new sales structure.
  • The company raised its interim dividend by 3.2% to 3.2 pence, despite the decline in operating profit.
  • Gross invoiced income (GII) increased by 9.1% to £1.34 billion, with 8.9% growth in software and 15.1% in services.
  • Gross profit (GP) increased by a relatively small 0.4% to £82.4 million, with segmental exceptions including public sector GP growth of 1.6% and GP growth in corporate of -0.6%.
  • The company's headcount was up 12% year-on-year to 1,266, with a strong pipeline and a solid foundation for future growth.
  • Bytes Technology Group remains confident of delivering a full-year outcome within the range of market expectations.
  • The company has received multiple vendor awards, including those from Axonius, Barracuda, Checkpoint, Sophos, Varonis, and VMWare.

Statistics:

  • Share price traded at R85.30 around midday, which is 22.6% lower than the R110.16 it traded at a year ago.
  • Net profit fell 5.1% to 12.03 cents a share from 12.67 cents at the same time last year.
  • Gross invoiced income (GII) increased 9.1% to £1.34 billion, with 8.9% growth in software and 15.1% in services.
  • Gross profit (GP) increased by a relatively small 0.4% to £82.4 million.
  • Headcount was up 12% year-on-year to 1,266.
  • Closing cash was £82.3m, up 15.1% over the previous year.

Sources:

  • Bytes Technology Group's investor statement
  • Johannesburg Stock Exchange (JSE) market data
  • Business Report news article

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