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BYTES TECHNOLOGY GROUP PLC - Audited preliminary results for the year ended 28 February 2022, proposed final and special dividends
2022/05/24 08:00:00Download PDF Stock report
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 Produced by the JSE SENS Department. 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