Bytes Technology Group (BYIT) investor relations material

Executive summary

• H1 FY27 gross profit rose 17.8% to £97.1m, with double-digit growth in both public and private sectors; FY27 guidance was upgraded in September and reiterated.

• Existing customers generated 98.2% of gross profit; the renewal rate was 115.7%, and new customer wins contributed £1.8m of gross profit.

• Strategy is shifting toward customer-centric solutions and recurring services, supported by stronger service demand and investment in technical capacity.

Financial highlights

• Gross invoiced income rose 19.6% to £1,605.2m; revenue increased 18.7% to £128.3m and gross profit grew 17.8% to £97.1m.

• Operating profit increased 6.6% to £35.3m; profit before tax rose 3.6% to £40.0m and profit after tax increased 3.1% to £29.9m.

• Basic EPS rose 6.1% to 12.76p, reflecting higher profit after tax and a lower average share count following buybacks; the interim dividend increased 3.1% to 3.3p per share.

• Administrative expenses increased 24.7% to £62.0m, reflecting higher employee costs, commissions, bonuses, systems investment and project-related fees.

Outlook and guidance

• FY27 guidance is low-to-mid-teens gross profit growth and low-to-mid-single-digit operating profit growth; guidance excludes CyberOne.

• October Microsoft incentive changes are included in guidance: higher rewards for growth products and CSP are expected to be positive despite lower rebates on some legacy products.

• FY27 cost normalisation is ~£4.5m, with around half absorbed in H1 and costs weighted toward H2; November sales hires are expected to build capacity for FY28.

• From FY28, operating profit is expected to track gross profit more closely as costs normalise and capacity becomes productive; CyberOne is forecast to enhance EPS in FY28.