Bytes Technology Group

Bytes Technology Group Dividend Analysis and Summary

• Final ordinary dividend: 7.0p per share (FY25 final: 6.9p; +1.4%).
• Interim dividend: 3.2p per share; full-year ordinary dividend: 10.2p per share (FY25: c.10.0p; +2%).
• Special dividend paid in FY26: 10.0p per share (discretionary, not part of ordinary run-rate).
• Ex-dividend date (UK): 16/07/2026; Record date: 17/07/2026; Payment date: 31/07/2026.
• Shares in issue at declaration: 236,370,093; expected cash outflow for final dividend: ~£16.5m.
• Dividend policy: distribute 40–50% of post-tax pre-exceptional earnings via ordinary dividends.
• FY26 EPS (basic): 21.4p; Ordinary payout ratio ~48%; dividend cover ~2.1x.

• Coverage: Full-year ordinary dividend of 10.2p covered ~2.1x by EPS (21.4p), comfortably within the 40–50% policy band.
• Cash backing: Free cash flow £65.9m and year-end cash £98.6m vs proposed final distribution ~£16.5m (ordinary dividends for FY26 c.£24m), with strong cash conversion of 105%.
• Balance sheet and liquidity: Net cash position; £30m undrawn RCF extended to May 2029 (option to 2030).
• Earnings trajectory: FY26 operating profit down 5.6% and EPS down 6.1% as Microsoft incentive changes and mix compressed margins (GP/GII fell to 7.1% from 7.8%). FY27 guidance: high single- to low double-digit GP growth, but operating profit “broadly flat” due to ~£4.5m cost normalisation. This implies ordinary DPS growth will likely track earnings rather than be strongly progressive.
• Quality of cash flows: Highly recurring customer base (c.97% of GP from existing customers; reported renewal rate 99%) and negative working capital model support dividend resilience.