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Bytes has indicated that it is looking to float on the stock market and start a fresh chapter.
The business is considering demerging from its South African parent Altron and going for a primary listing on the London Stock Exchange and a secondary listing of the Johannesburg Stock Exchange.
The software and cloud player is publishing a registration document that reveals the plans around proceeding with an initial public offering (IPO) and details of the strength of the business, which delivered gross profit of £79.2m, a 24.5% increase on the previous year, and adjusted operating profit of £31.7m, which were also up by 53.9% on 2019.
The firm employs a 650 strong workforce and has built up a varied customer base, with 4,929 customers in financial year 2020 (FY20) across the private and public sectors. The business has also established relationships with more than 100 vendor partners and their distributors.
Most people will associate Bytes with Microsoft, and the document will also mention the strong track record the firm has working with the software and cloud giant and its position as one of the vendor’s largest UK partners by revenue.
The document will also stress the experience of the current senior management team, with the CEO and CFO running Bytes as an autonomous business for the past two decades.
“We are delighted to be taking these steps towards an expected flotation on the London Stock Exchange and Johannesburg Stock Exchange. After 22 years as an autonomous unit within a diversified technology services group, this marks an important chapter in the development of Bytes,” said Neil Murphy, CEO of the Bytes Group.
“This pivotal moment reflects the achievements of the past and also signals our belief in our ability to deliver on our strategy and gain share in an exciting and rapidly growing market,” he added.
“Bytes has a highly motivated group of colleagues with an impressive track record of delivering software offerings and solutions to a diverse, loyal and growing customer base. We have traded strongly this year to date, as we have helped our clients adapt to new working patterns and this has resulted in a positive financial performance and continued growth in our customer base,” he added.
Murphy said that the business was well-positioned to continue to take advantage of the growth in the market spurred on by digital transformation, and it would keep growth coming in the future.
Altron is expected to shortly publish details of the demerger and convene an extraordinary general meeting of shareholders to get them to consider the plans.
What happens if the IPO goes ahead?
- Bytes will have a premium listing on the official list of the FCA and admission to trading on the main market for listed securities of the London Stock Exchange and the main board of the JSE by way of a secondary inward listing
- Upon admission, the company expects to have a distributed shareholder base comprising at least 36% held by new investors, with the balance held by Bytes management (5%) and existing Altron Shareholders. Altron will not be a shareholder going forward
- The company expects to be eligible for inclusion in the FTSE UK indices following admission.