Bytes Technology Group (BYIT) H1 2025 earnings summary

Executive summary

• Achieved strong H1 FY25 results with 13.7% GII growth, 9% gross profit growth, and 16.3% rise in operating profit, despite challenging macroeconomic and political conditions in the UK and a slower corporate sector.

• Expanded public sector contracts, now 70% of GII, maintained high customer renewal rates, and invested in talent, systems, and vendor accreditations to support future growth.

• Focused on cloud, cybersecurity, and AI (notably Copilot), with over 130,000 Copilot licenses sold and strong vendor partnerships.

• Continued commitment to ESG, achieving SBTi validation, expanding diversity and sustainability initiatives, and establishing a board-level ESG committee.

• Opened new offices in Sunderland, Portsmouth, and expanded London office to support regional growth and technical capability.

Financial highlights

• Gross invoiced income rose 13.7% year-over-year to £1,230.2m; gross profit up 9% to £82.1m; operating profit up 16.3% to £35.6m.

• Earnings per share increased 19.5% to 12.67p; interim dividend up 14.8% to 3.1p per share.

• Cash balance at period end was £71.5m after returning £35.4m to shareholders; cash conversion for H1 was 56%, with a rolling 12-month cash conversion of 112%.

• Gross margin (GP/Revenue) increased to 77.8% from 69.3%; operating profit/gross profit ratio improved to 43.4% from 40.6%.

• Profit before tax up 24.6% to £41.5m; profit after tax up 19.7% to £30.4m.

Outlook and guidance

• Confident in delivering FY25 plan, with continued investment in growth areas, strong vendor relationships, and technical capabilities.

• Double-digit gross profit growth remains an aspiration, though recent guidance is more cautious given 9% H1 growth.

• No material impact expected from upcoming Microsoft or vendor incentive changes in the current or next financial year.

• Market share remains below 4% of estimated TAM, indicating significant growth potential.

• Public sector pipeline remains healthy post-election, with no evidence of pull-forward demand.