Bytes Technology Group plc is commencing a £25m share repurchase programme in a bid to boost shareholders.
The software, security, AI and cloud services specialist, based in Surrey, saw its shares lose a third of their value in one day in early July after it issued a profit warning.
Beginning that day, 2nd July, at around 508p, by its end its share price stood at 353p: fast-forward six weeks, and it stands at 379p.
However there could now be good news for shareholders after the firm said it plans to buy back shares up to a maximum value of around £25m then cancel these, effectively reducing its total allotted share capital.
“The company’s capital allocation policy prioritises enhancing business growth, both organically and through select inorganic opportunities as they arise, whilst maintaining an appropriate level of liquidity headroom and returning excess capital to shareholders,” it stated.
“After considering the company’s strong balance sheet position and prevailing share price, the board believes that it would be beneficial to return capital to shareholders through a share repurchase.”
In issuing the profit warning in early July, Bytes said trading across the first months of the year had been impacted by a challenging macroeconomic environment, leading to some deferral of customer buying decisions, particularly in the corporate sector.
Last year Bytes began investigating the shock resignation of its former CEO Neil Murphy after he was accused of unauthorised trading in the company’s shares.
The investigation ultimately found 119 unauthorised transactions on 66 trading days between January 2021 and November 2023 which sent the London-listed stock plummeting.
However it would rebound as the software company announced a 12.3% rise in annual revenue to £207m and 12.2% leap in adjusted operating profit to £63.3m.
Sam Mudd (pictured), installed as interim CEO, was appointed to the role on a permanent basis in May 2024 while two independent non-executive directors were also added to its board. Its share price rose above 500p on that news, and it was holding steady around that mark until early July.
Bytes has now entered into an agreement with Numis Securities Limited for the share repurchase programme, which will take place in two equal tranches of up to £12.5m in the second half of 2025.
Deutsche Numis and Peel Hunt will manage the purchases on a discretionary basis, purchasing shares within certain pre-set parameters and making their trading decisions independently of Bytes, the firm said.