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MIDAS SHARE TIPS: Bytes Technology Ready to Rebound after a Tough Year

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

Microsoft technology first 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 understood, is a ₤ 1.1 billion company with about 1,200 staff members and 6,000 consumers.

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

Back in the 1980s, Bytes’ range was small. Early tech geeks used Microsoft to compose simple files and create spreadsheets on their computer systems, and Bytes sold the package that made it possible.

Since then the computer system world has actually changed beyond acknowledgment, with Microsoft alone using hundreds of services, from Outlook and Teams to develop ware, cloud storage and, lately, wiki.vst.hs-furtwangen.de Copilot, an artificial intelligence tool.

In safe hands: Bytes Technology has sales personnel who know their products inside out

Individuals can purchase many of these items straight, however services tend to go through agents, understood as resellers, who offer lower prices, advice and support when things go awry.

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

Customers tend to employ in between 500 and 2,500 staff – big adequate to need a lot of IT but not so big that they can sort whatever out themselves. That is where Bytes enters into its own.

Technology has actually become an essential tool for private companies and the public sector alike, however services have ended up being so complicated that even IT groups require specialists to help them exercise what to buy, when to purchase and how to utilize what they have actually bought.

Bytes staff are extremely trained, frequently starting there as graduates and spending years with the firm.

To an outsider, conversations between these salespeople and their clients can sound like PhD interactions – or gobbledegook. To those in the know, such in-depth settlements are a vital part of organization success.

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Bytes president Sam Mudd prides herself available high-level service to new and existing consumers and, although Microsoft is a major partner, she deals with a variety of providers, covering almost every technology need, including cyber security.

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

Investors took shock, Bytes stock plunged and, although Murphy was later cleared, the shares have remained depressed.

Mudd is undeterred, having spent recent months preparing a development plan developed to drive sales and earnings over the next 5 years.

Potential is clear. Despite its number one position, Bytes has just a 4 percent share of the market so there must be lots of opportunities to broaden.

Despite wobbles on Wall Street, need for software application is increasing too, with with forecasters suggesting yearly growth of about 10 percent.

Brokers anticipate Bytes earnings 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 regular and unique dividends too, forking out 8.7 p in ordinaries and 8.7 p in a one-off special in 2015, and expected to deliver 19.6 p for 2025, rising to 21.5 p next year.

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Midas verdict: Recent results from Microsoft and other tech titans may have dissatisfied financiers, however the days when we managed perfectly well without IT are long gone.

Bytes assists companies, charities and the public sector to navigate the digital minefield.

With a strong track record and a credibility for providing on its guarantees, the business must show resistant, even in today’s uncertain times.

That makes the shares a buy, at ₤ 4.65.

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