Bytes Technology Group has reported flat earnings for the first half of its financial year, but is confident it will deliver a full-year outcome within the range of market expectations.
On Tuesday, the software, security, cloud and AI services specialists reported gross profit of £82.4m for the six months ended August, an increase of 0.4%.
Profit from the public sector, more affected by Microsoft’s partner incentive changes, was up 1.6% and corporate — which adjusted to the new sales structure launched at the start of the year — was down 0.6%, the group said.
Software gross profit was 3.5% lower, but was offset by strong growth in services, which increased more than 40%, consistent with the group’s objective to grow services income and profit.
Operating profit declined 7% to £33.1m, with higher headcount, salary and national insurance costs only partly mitigated by lower variable remuneration.
Gross invoiced income was up 9.1% at £1.34bn, with 8.9% growth in software and 15.1% in services. Revenue was 2.5% higher at £108.1m.
Headline earnings per share (HEPS) to 12.03p from 12.67p before, and an interim dividend of 3.2p per share was declared.
CEO Sam Mudd said the group was well positioned to benefit from the structural demand drivers in its markets including cloud computing, cybersecurity and AI for the remainder of the financial year.
“We have a strong pipeline and have started the second half of the 2026 financial year well but are 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 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 positioned 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.
Bytes is a former Altron subsidiary. 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.
With Mudiwa Gavaza
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.