Bytes reports strong earnings and declares special dividend

Bytes Technology Group is banking on its relationship with large international software vendors to carry its business for the coming year, CEO Sam Mudd says. 

“The strength of our relationships with Microsoft and many other top-tier vendors, such as Adobe, AWS, Check Point, Dell, VMware and Service Now, allows us to seize exciting opportunities in cloud adoption, data and workload migrations, storage, security and virtualisation technologies,” Mudd said as her company reported earnings for the year to end-February. 

Such relationships have buoyed Bytes over the years, reflected in its growth and position as one of the JSE’s most valuable technology groups. For instance, 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.

Sales generated from Microsoft products and associated service solutions account for about 68% of Bytes’ gross invoiced income and about 50% of gross profit for the 2025 year.

“We continue to expand our collaboration with customers as they roll out emerging AI technologies like Copilot, working closely with their teams to embed these tools into their businesses to support growth and drive efficiency,” Mudd said.

Bytes reported higher full-year earnings, reflecting sustained demand for its software, solutions and services and, in light of the strong performance, has declared a special dividend.

The group, which is listed in Johannesburg and London, reported a 16.5% rise in headline earnings per share (HEPS) to 22.78 pence for the year. Gross invoiced income exceeded £2bn for the first time, increasing by 15.2% to £2.1bn, primarily driven by software. Operating profit was 17.1% higher at £66.4m, reflecting 8.9% corporate growth, 18.2% public sector growth and double-digit growth in software and services.

A final ordinary dividend of 6.9p was declared, resulting in a full-year dividend of 10p, up 15%. Due to the company’s strong performance and cash generation, the board proposed a cash return to shareholders with a special dividend of 10p per share, equating to £24.1m. The group had a strong balance sheet with closing cash of £113m.

Existing customers contributed 97% of gross profit, at a renewal rate of 109%, Mudd said.

The group continued to grow its physical footprint by opening offices in Sunderland and Portsmouth, expanding floor space in London and it acquired two buildings adjacent to its Leatherhead office towards the end of the year to cater to further expansion.

“We are well positioned to respond to the evolving demands we see in our markets, including cloud computing, cybersecurity, AI and managed services, and deliver another year of double-digit gross profit growth together with high single-digit operating profit growth in financial year 2025/26,” Mudd said.

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