Bytes Technology delivered a resilient performance in the first half, trading substantially in line with the expectations it reported at the time of its AGM in July, the group said.
In a trading update on Thursday, the group said for the half-year ended August, gross invoiced income was expected to be about £1.33bn (R31.54bn), gross profit not less than £82m and operating profit not less than £33m.
The group’s net cash position at the end of the first half was about £82m, after paying £41m of final and special dividends and purchasing £1m shares in the period as part of the £25m repurchase programme announced in August.
Cash conversion in the first half reflected the group’s normal weighting to the second half, with strong cash conversion expected for the full year, it said.
‘We delivered a resilient performance, improving through the period as we successfully settled into our new corporate sales structure,” said CEO Sam Mudd.
“We have a strong pipeline and we expect continued momentum into the start of the second half, albeit mindful that comparatives will be impacted by the particularly strong trading performance we saw in the last few months of the prior financial year,” she added.
“We remain confident in our growth strategy and believe we are well positioned to benefit from the structural demand drivers we see in our markets, including cloud computing, cybersecurity and AI,” she said.
At its AGM on July 2, the group said trading across the first months of the 2026 financial year was affected by a challenging macroeconomic environment, leading to some deferral of customer buying decisions, particularly in the corporate sector.
The group recently evolved its corporate sales division, shifting from a generalist model to specialised, customer-segment-focused teams, in line with its commitment to customer centricity.
Mudd said in the AGM statement that the transition had resulted in a longer than expected readjustment period, but it positions the group to deliver more relevant solutions and drive sustainable services annuity income growth during the second half of the financial year and beyond.
“Also, as previously noted, the impact of changes to Microsoft enterprise incentives is weighted more to the first half due to high levels of renewals in March and April around the public sector year end and June around Microsoft's year end; while the benefit from services growth, where profit is spread over the contract term, builds up across the whole year,” she said.
For the six months ended August 2024 the group reported gross profit of £82.1m and operating profit of £35.6m.
Bytes, a firmer Altron subsidiary, is one of the UK’s leading software, security, cloud and AI services specialists. Listed in London and Johannesburg, it serves about 6,000 corporate and public sector customers, many of which have had long relationships with the group.
It expects to release its interim results on October 14.
With Mudiwa Gavaza
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