Software firm The Bytes Group unveils plans for London stock market float
Software firm The Bytes Group today unveiled plans for an initial public offering after posting a rise in revenue and profit thanks to the shift in home working.
The planned float would see the firm demerge from its South African parent company Altron and pursue a primary listing on the London Stock Exchange and a secondary listing on the Johannesburg Stock Exchange.
It comes after Altron announced plans in April to spin off its UK business in a plan designed to unlock value for shareholders.
Bytes, which employs more than 650 people in the UK, focuses on security and cloud products and boasts a number of blue-chip customers and is one of Microsoft’s largest partners in the country by revenue.
The company has grown sharply over recent years, cashing in on the ongoing shift to cloud computing as well as a rise in home working due to the coronavirus pandemic.
Bytes posted gross income of £505m in the six months to the end of August, up from £370m in the same period last year. Gross profit rose from £40m to £46m.
The Surrey-headquartered company said the IPO plans will allow Bytes to pursue its growth strategy independently with an enhanced market profile.
The board said it will initially target an annual dividend of between 40 per cent and 50 per cent of Bytes’ profit after tax.
“We are delighted to be taking these steps towards an expected flotation on the London Stock Exchange and Johannesburg Stock Exchange,” said chief executive Neil Murphy.
“After 22 years as an autonomous unit within a diversified technology services group, this marks an important chapter in the development of Bytes.
“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.”
On listing, Bytes said it expects to have a distributed shareholder base with at least 36 per cent held by new investors, with the balance held by Bytes management and existing Altron shareholders.
Bytes has appointed Numis Securities as sole sponsor, financial advisor and bookrunner for the listing.
If the float goes ahead it will be the latest in a string of planned London IPOs for tech-focused firms that have enjoyed a boom in trading during the pandemic.
Cyber giant Darktrace and tech reseller Music Magpie are both eyeing stock market debuts next year, while Deliveroo is also said to be mulling a float.