Bytes Technology Group (BYIT) H2 2026 earnings summary

Executive summary

• Achieved gross invoiced income of £2.3bn, up 11.5% year-over-year, with gross profit rising 2.5% to £167.3m, despite Microsoft incentive changes impacting margins.

• Strategic organizational changes included segmentation of sales teams, sector alignment, and a focus on customer-centricity to drive future growth.

• Services gross profit grew 38%, reflecting increased demand for advisory, managed, and AI-related services.

• Maintained high customer renewal rates (99%) and stable customer numbers, with new customers contributing £5m to gross profit.

• Continued strong partnership with Microsoft, which contributed 50% of gross profit.

Financial highlights

• Gross invoiced income: £2.3bn (+11.5% YoY); gross profit: £167.3m (+2.5% YoY).

• Gross profit margin over GII declined to 7.1% (down 0.7pp), mainly due to Microsoft incentive changes.

• Operating profit was £62.7m, down 5.6% from the prior year, reflecting lower GP growth and ongoing investment.

• Cash conversion remained strong at 105%, with year-end cash balance of £98.6m after £74m returned to shareholders.

• Ordinary dividend increased 2% to 10.2p per share; £25m share buyback completed and new £25m buyback launched.

Outlook and guidance

• Entering FY 2027 with strong sales momentum; expect high single-digit to low double-digit gross profit growth.

• Operating profit expected to be broadly flat, absorbing £4.5m of cost normalization.

• No further major Microsoft incentive changes anticipated in the short term, supporting margin stability.

• Continued investment in services and sector-led go-to-market strategies.