Bytes Technology Group (BYIT) H1 2026 earnings summary

Executive summary

• Gross invoiced income (GII/GRI) rose 9.1% year-over-year to £1,342 million, with gross profit up 0.4% to £82.4 million and operating profit down 7% to £33.1 million, reflecting Microsoft incentive changes and a new sales structure.

• Services and hardware segments delivered strong growth, offsetting some headwinds in software margins due to Microsoft incentive changes.

• High customer retention (98% of GP from prior-year customers) and strong vendor partnerships underpin future growth confidence.

• Interim dividend per share increased 3.2% to 3.2p, and a £25 million share repurchase program was launched.

• Maintained a strong, debt-free balance sheet and FTSE4Good Index inclusion highlights ESG commitment.

Financial highlights

• GII/GRI increased 9.1% year-over-year to £1,342 million; gross profit up 0.4% to £82.4 million; operating profit declined 7% to £33.1 million.

• Gross profit margin over GII/GRI fell to 6.1% from 6.7% due to Microsoft EA incentive changes.

• Administrative costs rose 6.9%, mainly from salary increases and headcount growth.

• Cash at period end: £82.3 million; cash conversion (rolling 12 months): 104.7%.

• EPS down 5.1% to 12.03p; profit after tax: £29.0 million (-4.6% YoY).

Outlook and guidance

• Confident in delivering full-year results within market expectations, with H2 performance expected to improve as Microsoft headwinds diminish and sales reorganization benefits materialize.

• GP growth of 7–8% for FY2027 seen as achievable as Microsoft incentive changes normalize.

• Cost growth will continue but at a more muted rate, with commissions expected to rise in H2.

• No major Microsoft incentive changes expected for next year beyond a price increase effective November 1, 2025.

• Well positioned to benefit from growth in cloud, cybersecurity, AI, and managed services.