Publicly-listed Bytes Technology Group has given a market update on its annual results, and the progress of its investigation on the potentially illegal share trades of its ex-CEO, who recently resigned.
The software, security and cloud services specialist said it had seen “double-digit” profit growth in the year ended 29 February, 2024.
“The group once again delivered growth comfortably in double digits in its key metrics of gross profit and adjusted operating profit, and cash conversion in line with the group's target of 100%, resulting in a cash position of approximately £89m at the year end,” said the firm.
Both profit metrics are “expected to exceed 12%”, with gross invoiced income growth of “over 25%”. “This reflects the very strong demand for software and IT services we continued to see from both corporate and public sector clients, despite the well-documented macroeconomic headwinds,” it added.
On former CEO Neil Murphy, who resigned on 21 February, 2024, the firm said: “Mr Murphy's resignation was prompted by a voluntary request for information from the Financial Conduct Authority (FCA), which was sent to Mr Murphy on 14 February, 2024. The request indicated that Mr Murphy may have conducted additional transactions that were not disclosed to the market or the FCA since the company's IPO.
“Mr Murphy informed the board that he would share his draft response to the FCA's inquiries at a scheduled board meeting on 21 February 2024. However, on the morning of this meeting, Mr Murphy unexpectedly resigned with immediate effect, indicating that he had failed to make disclosures related to his share dealings, and this was announced by the company on the same day.”
The company went on: “It transpired that Mr Murphy had engaged in unauthorised and undisclosed trading of the company's ordinary shares on 66 trading days between 6 January, 2021 and 10 November, 2023, totalling 119 transactions. This revelation came as a shock to the other board members, especially considering the company's previous investigation during 2023, into an unrelated share dealing disclosure matter, which had clearly highlighted to all board members the importance of absolute accuracy and transparency, in all matters related to share dealings by directors, and persons closely associated (PCA) with them.
“Subsequently”, the company added: “On 12 March, 2024, Mr Murphy's lawyers provided the company with additional information outlining 15 additional transactions on ten different trading days conducted by Mr Murphy on behalf of his wife, between 29 December, 2021 and 20 November, 2023.
“The company disclosed this information to the London Stock Exchange and Johannesburg Stock Exchange on 13 March, 2024. Additionally, on 12 March, 2024, Mr Murphy, through his legal representatives, reiterated that there were no further relevant transactions.”
It added: “Given Mr Murphy's long-standing leadership position in the company, the board of directors is saddened as well as shocked by Mr Murphy's actions, which it finds hard to comprehend. His actions were entirely at odds with the values of openness, honesty, and transparency which have been and which remain central to the group's culture and to its ongoing success.”
As for the previous investigation mentioned in relation to potentially unauthorised trades, the company said: “Earlier in FY24, the board undertook an externally facilitated review of the circumstances relating to a share purchase by a PCA of former non-executive director Alison Vincent not being notified to the company.
“On 14 July, 2023, the company issued a notification to the market detailing a purchase of 608 ordinary shares by a PCA of Alison Vincent that had taken place on 29 March, 2022. The company was not properly notified of the full details of this trade until 30 May, 2023.”
Regarding the company’s full results for the last year-end, these are expected to be posted between “late May or early June 2024”, the firm said.
