Bytes Technology mulling whether to go ahead with London IPO

Bytes Technology Group is considering whether to go ahead with an initial public offering on the London Stock Exchange.

Bytes is the UK arm of South African technology group Allied Electronics Corp., or Altron.

On 2 April, Altron had announced plans to demerge Bytes and then seek a dual listing in London and Johannesburg to "unlock value for Altron shareholders".

Bytes Group is a provider of IT software and solutions in the UK focused on cloud and security products.

Over financial years 2010-20, its gross profit increased from £12.6m to £79.2m, driven mostly by organic growth, together with two strategic acquisitions, in 2011 and 2017, respectively.

The company also described itself as "highly cash generative", clocking in with cash conversion of 125.9% for the financial year 2020.

Its core UK software market is sized at £23.4bn and is forecast to grow at a compound annual growth rate of 5.2% by 2024, the company said.

It already had a diverse range of blue chip customers with 4,929 clients as of fiscal year 2020 spread across the private and public sectors.

The company worked with custmers to identify their software needs, select the appropriate products, manage licence compliance and, ultimately, to optimise their software assets.

Strategic relationships and partnerhips were in place with more than 100 vendor partners and their distributors, including a "particularly" strong track record of working with Microsoft and one of the US giant's largest partners in the UK by sales.

Since 31 August 2020, Bytes's business had continued to perform in-line with management's expectations and in a manner consistent with the trends in place over the latter months of the first half of the 2021 financial year.