The COVID-19 pandemic has created a profound shift in how people interact and world economies function. To this extent, while selective sectors were facing an unprecedented scenario with a notable liquidity squeeze, technology oriented businesses have found methods to hold steady and even thrive in a COVID-19 world.

Being an important player within the local digital sector, BMIT Technologies plc (BMIT) recently reported that following the coronavirus outbreak in Malta, it has experienced an increased uptake in cloud services, Artificial Intelligence (AI) based assistance, as well an increase in demand for cyber-security services.

Moreover, BMIT generated circa €24m in revenues during 2020, illustrating an increase of €1.6m or 6.9 per cent on a comparative basis. Indeed, management reported that the main drivers for such growth in revenue is attributable to a greater customers’ demand for connectivity and cloud services, with each segment increasing by 16 per cent over the prior year.

Additionally, the Group’s operating expenditure excluding depreciation and amortisation incurred during 2020, increased by approximately €1.1m or 8.6 per cent over 2019. More importantly, management reported that the rise in operating expenditure is predominantly attributable to BMIT’s growth in business and is also a reflection of the Group’s shift in service offering, in line with the aforementioned increase in demand for connectivity and cloud based services.

It is also important to clarify, that in view of the restrictions imposed by the relevant health authorities’ to contain the virus spread, BMIT experienced a decline in several expenses such as travelling, HR and marketing costs specifically related to events and conferences.

Notwithstanding the fact that BMIT reported strong financial results during 2020, the Group was still negatively impacted by selective segmental revenue streams. As many businesses implemented remote working policies, BMIT recently reported lower demand for on premise support during 2020.

However, in view of the Group’s capabilities within the industry, this was completely offset by a range of new services which were rolled out by BMIT to assist customers adjust to the COVID-19 realities.

Furthermore, while many businesses delayed major expansion and investment decisions, which impacted new demand for traditional data centre services, in the online gaming sector, management reported that a good number of online gaming operators continued to register stable or growing demand, with a positive ripple-on effect on BMIT. We deem this to be positive for the Group, more specifically given that as at December 2020, approximately 67 per cent of BMIT’s total revenue is derived within the gaming sector.

Additionally, despite the current unprecedented situation, the Group proposed a net dividend per share of circa €0.29, translating into a current net dividend yield of 5.5 per cent.

On a positive note, although the pandemic had a major impact on almost every businesses across the globe, this crisis has accelerated many organisations’ focus on attaining business resilience and financial flexibility against similar disruptive episodes, with this creating accelerated demand for cloud and security services.

In this regard, we believe that BMIT, being a local technology services provider, is well positioned within the industry to assist businesses to make the necessary business model adjustments, whilst continue focusing on additional growth opportunities, investments and internationalisation.