MIDAS SHARE TIPS: Bytes Technology Ready to Rebound after A Hard Year

This spring Microsoft will turn 50. From simple beginnings in Albuquerque, New Mexico, it has actually turned into one of the biggest companies in the world, credited with changing the computing industry and, with it, our daily lives.

Microsoft innovation initially went on sale over here in the 1980s and, in 1982, Bytes Computer Supplies opened in Surrey, specialising in floppies and other accoutrements from the American group.

Today, Bytes Technology, as it is now known, is a ₤ 1.1 billion business with about 1,200 workers and 6,000 customers.

It floated on the Stock Exchange in December 2020, a fortnight before Britain’s very first Covid Christmas. Shares were priced at ₤ 2.70, market response was enthusiastic and, by January 2024, they were trading at more than ₤ 6.50. The past year has been less rewarding, and today shares are simply ₤ 4.65. At this level they are underestimated and need to rebound through 2025 and beyond.

Back in the 1980s, Bytes’ variety was small. Early tech geeks utilized Microsoft to compose simple files and produce spreadsheets on their computer systems, and Bytes offered the package that made it possible.

Since then the computer system world has changed beyond acknowledgment, with Microsoft alone providing hundreds of services, from Outlook and Teams to design ware, cloud storage and, lately, Copilot, an artificial intelligence tool.

In safe hands: Bytes Technology has sales staff who know their items completely

Individuals can purchase a lot of these products straight, but companies tend to go through agents, understood as resellers, who use lower rates, suggestions and support when things go awry.

Bytes is the primary Microsoft reseller in the UK, with customers varying from the police, fire service and local authorities to Harvey Nichols, Trainline and Findus food group.

Customers tend to employ between 500 and 2,500 personnel – large adequate to need a lot of IT however not so big that they can arrange whatever out themselves. That is where Bytes enters its own.

Technology has become a crucial tool for private organizations and the public sector alike, but services have become so intricate that even IT groups require experts to help them work out what to purchase, when to buy and how to utilize what they have bought.

Bytes personnel are highly trained, often starting there as graduates and spending years with the firm.

To an outsider, discussions between these salesmen and their customers can sound like PhD interactions – or gobbledegook. To those in the know, such thorough are a necessary part of organization success.

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Bytes primary executive Sam Mudd prides herself available high-level service to brand-new and existing clients and, although Microsoft is a significant partner, she deals with a series of suppliers, covering almost every innovation requirement, including cyber security.

A long-time staffer, Mudd took the helm last spring after former president Neil Murphy resigned, having bought shares in Bytes without telling the board.

Investors took scare, Bytes stock plummeted and, although Murphy was later on cleared, yogaasanas.science the shares have remained depressed.

Mudd is undeterred, having actually spent current months drawing up a development strategy developed to drive sales and revenues over the next 5 years.

Potential is clear. Despite its primary position, Bytes has simply a 4 per cent share of the market so there must be plenty of chances to expand.

Despite wobbles on Wall Street, demand for software is rising too, with with forecasters suggesting yearly development of about 10 per cent.

Brokers expect Bytes profits to increase 19 percent to ₤ 73 million in the year ending February 28, climbing up to ₤ 87 million by 2027.

The group has a history of paying ordinary and special dividends too, handing over 8.7 p in ordinaries and 8.7 p in a one-off unique last year, and anticipated to provide 19.6 p for 2025, rising to 21.5 p next year.

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Midas decision: Recent arise from Microsoft and other tech titans may have disappointed financiers, but the days when we handled completely well without IT are long gone.

Bytes helps business, charities and the public sector to navigate the digital minefield.

With a strong track record and a credibility for delivering on its guarantees, the company ought to show resilient, even in today’s uncertain times.

That makes the shares a buy, at ₤ 4.65.

Traded on: Main market Ticker: BYIT Contact: bytesplc.com