Bytes Technology Group (Bytes) reported a solid set of results with adjusted headline earnings per share increasing by 18% to 129.6c (109.4c), a more accurate measure of the information technology group's sustainable earnings.
Operating profit improved by 16% to R325 million (R281 million) with group revenues improving by 18% to over R4 billion for the first time, with organic growth accounting for over 70% of the increase.
David Redshaw, Chief Executive Officer of Bytes, said: "I am particularly satisfied with the net finance income of R7 million in comparison with a net expense of R15 million in the previous year, and expect further improvements in this area in the coming year.
"Last year was yet again characterised by increased levels of competition and margin pressures, exacerbated in the case of several of the group's operations by a worsened exchange rate. Nevertheless, we continue to maintain a high level of confidence that opportunities to sustain growth will continue in the IT market," he said.
"Strong cash flows remained a feature during the year, producing a positive net cash position at year-end of R149 million, after expenditures of R65 million on acquisitions and the investment of around R58 million in our growing finance operation. Based on this, we have increased the dividend payment by 24% to 56c per share from 45c per share last year with cover, based on adjusted headline earnings, reducing slightly to 2.3 times."
Redshaw said the board decided in October last year to exit the Plato business in the United Kingdom and as a result has impaired the investment in this operation, thereby negatively impacting attributable earnings by R56 million.
"With the disposal of the company anticipated within the next month or so, this closes the chapter on this unsatisfactory investment," said Redshaw.
"Consequently, basic earnings per share decreased by 19% to 85.9c (105.7c), reflecting the effect of the Plato impairment. Yet, it is encouraging to note that the group's operating profit in the United Kingdom (notwithstanding the loss of R7.2 million sustained by Plato) increased by almost 100% to R35 million (R18 million), partially on the back of acquisitions," he said.
In reviewing the results, Redshaw pointed out that virtually all the Bytes operations (excluding Plato) recorded good results, with the exception of Specialised Solutions where several factors contributed to a slight worsening of results. However, he believes Specialised Solutions is well positioned to achieve meaningful growth in the period ahead.
He also mentioned the improvements achieved in the group's Systems Integration and Managed Services businesses and said good results were maintained or improved on by Document Solutions, People Solutions, Outsource Services, Digital Healthcare Solutions and Communication Systems.
"During the year under review we have acquired four businesses, the most noteworthy being Xclusive Solutions and Vantage Business Systems, two Xerox concessionaires in the United Kingdom. We are looking at further acquisitions both locally and internationally in the ensuing year and our first post year-end transaction was the acquisition of an operation that will complement our healthcare IT business."
Redshaw proudly referred to the group's achievements in the Financial Mail/Empowerdex Top 200 Listed Companies Empowerment rankings, where Bytes moved up to number eight overall and was ranked number one in the ICT sector.
"These achievements are the result of very significant efforts throughout the group over the past five years and bear testimony to the progress made in the group's transformation initiatives," he said.
In looking ahead at the new financial year, Redshaw said he anticipates a further year of progress for the group and while he expects some of the challenges to continue, the group has many opportunities open to it to ensure ongoing growth.
"Our strength is our relationships with technology partners which will continue to assist in attaining this objective," said Redshaw.
Share
Editorial contacts