Microsoft reseller The Bytes Group to list in London

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Surrey-based software group The Bytes Group has filed to list in London and Johannesburg once it demerges from its South African parent Altron Electronics.

The Bytes Group is a cloud and security products specialist and one of Microsoft’s largest partners in the UK.

Bytes generated more than U$1bn of revenue for the tech giant in the US group’s 2020 financial year.

Of that, US$377mln was attributable to on-premise sales and US$675mln to cloud-based sales

Bytes add it also has strong relationships with hardware groups such as Cisco, HP, IBM and Dell and it almost 5,000 customers across both the public and private sector.

Chief executive Neil Murphy and finance director Keith Richardson have been in their roles for 20 and 25 years respectively.

Murphy said: “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.”

Over the past two years, gross invoiced income has increased from £343mln in the year to end February 2018 to £722mln in 2020 or average annual growth of 45%.

Operating profits over the same period rose from £11.5mln to £31.7mln.

Bytes said the business is cash generative and it intends to pay put between 40-50% of the group’s after-tax profit as dividends.

After listing, Altron will not be a shareholder said Bytes with at least 36% of its shares to be held by new investors with the balance held by Bytes management (5%) and existing Altron shareholders.

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