All eyes were on Bytes Technology Group this morning as it lifted the veil on full-year results showing a 27% top line rise.
Here, IT Channel Oxygen rounds up six key talking points following its publication.
1. Leaves challenging times behind
The publication of Bytes Technology Group’s full-year results caps off what new CEO Sam Mudd characterised as a “challenging couple of months” for the LSE-listed software provider (read where Mudd is placing her bets in this exclusive IT Channel Oxygen interview here).
The Microsoft partner said it “performed strongly” in its year to 29 February 2024 as gross invoiced income leapt 27% to £1.82bn.
After the abrupt resignation of previous CEO Neil Murphy in February put a dent in its share price, BTG is now trading in line (and even above) its peer group once again. At the time of writing, its PE ratio was 32.7, compared with 30.2 for Softcat, 29.5 for CDW, and 26.1 for Insight.
Its shares rose by 2% on the results this morning.
2. Public sector provides
BTG said its “exceptional level of growth” in FY2024 was stoked by some meaty wins in its public sector stomping ground, which provided 62% of its total GII (up from 60% a year earlier).
Public sector GII soared 33% to £1.14bn thanks to a couple of big Microsoft wins with the NHS and HMRC. Corporate GII swelled by a “very pleasing” 18% to £583m, meanwhile.
Winning or renewing these ultra-competitive public sector contracts hit BTG’s profit margins, however. Its gross profit margins fell from 9.0% to 8.0% (a figure that would have stood at 8.9% stripping out the two largest new contracts).
In absolute terms, BTG’s gross profit grew 12.5% to £145.8m, with average GP per customer advancing from £21,800 to £24,400.
3. Growth slows in second half
While BTG was never going to live up to its barnstorming first half, it is interesting to note that its GII growth decelerated from 38% to 14% between H1 and H2.
By our calculations, £741m of BTG’s £1.82bn FY 2024 GII was generated in the second half, compared with the £653m it hauled in the second half of its fiscal 2023.
Mudd, however, remained upbeat in her results commentary, stressing that “customers have continued to invest in their IT needs”, “despite the challenging economic climate over the past year”.
4. Getting comfy with Copilot
BTG is ‘eating its own dogfood’ when it comes to AI, revealing that it has committed to allocating Microsoft Copilot licenses across 63% of its internal staff (including all of its sales and marketing staff), following trials in its second half.
More broadly, Mudd claimed the reseller has seen “strong customer response to Microsoft’s AI products”.
“We continue to expand our internal skills through AI-dedicated teams in preparation for this to gain increasing momentum in 2024/25 and beyond,” she said.
5. Hire purpose
BTG’s headcount broke through the 1,000 mark in its fiscal 2024, with staff numbers swelling to 1,057 by year end (up from 930 a year earlier). Some 72 net new sales heads were added, while a London office was opened last March.
The imminent arrival of former Crayon UK boss Hayley Mooney – news of which IT Channel Oxygen broke last month – demonstrates BTG’s desire to attract external talent, Mudd said. The recent appointment of Clare Metcalfe as MD of BTG’s Phoenix Software business shows how it is intent on growing the careers of staff internally, she added.
6. Mudd mulls 2025
Despite not giving too much away about her expectations for the year ahead, Mudd offered an upbeat assessment of the business she is now heading up (read about her key priorities here).
“In 2023/24, we performed strongly, continuing our trend of double-digit growth across all key financial metrics,” Mudd said.
“Whilst we operate in highly competitive markets amidst challenging macroeconomic conditions, by nurturing our customer relationships, extending our strong vendor partnerships, and leveraging the technical and commercial skills of our teams, we remain confident in our ability to succeed and make further progress in 2024/25.”
