Our opinion on the current state of BYI

Bytes Technology was spun out of Altron and separately listed on the London Stock Exchange (LSE) and the JSE. At listing it had a market capitalisation of about R13bn which has subsequently grown to R26,5bn. Altron shareholders received GBP542m in shares and cash at the demerger in a significant release of value. It describes itself as "...one of the UK's leading software, security and cloud services specialists". The company is the biggest reseller of Microsoft products in the UK and receives about 60% of its revenue in annuity form. In its results for the year to 28th February 2023 the company reported revenue up 26,5% and headline earnings per share (HEPS) up 23%. The company said, "Customer appetite for security, cloud adoption, digital transformation, hybrid datacentres and remote working solutions underpinned the Group’s continued growth in FY23. - 96% of GP came from customers that traded with BTG last year (FY22: 93%), at a renewal rate of 116%". In an update on the six months to 31st August 2023 the company reported, "...continued growth in Gross Profit and Adjusted Operating Profit, both growing comfortably in double digits. This reflects BTG’s continued market share gains in both corporate and public verticals. Our net cash position at the end of H1 FY24 was £51.3 million, after paying £30 million of final and special dividends in the period". Technically, the share rose strongly after listing at around 6800c on 17th December 2020 to reach 12570c at the end of 2021. After that it was in a downward or sideways trend probably because of the correction on world markets. In the last two months to share has been rising sharply. We believe that this share is a solid rand-hedge and will perform well going forward.