Bytes Technology Group is enjoying “strong momentum” in the early weeks of its current financial year, its CEO said as she unveiled a fiscal 2026 profit dip.
The LSE-listed software licensing specialist saw gross invoiced income (GII) for its year to 28 February 2026 rise 11.5% to £2.34bn.
Operating profit fell 5.6% to £62.7m amid the fall out of well-published Microsoft incentive changes and an internal sales rejig, however.
That compares to the 27.3% underlying operating profit growth registered by perhaps its closest like-for-like peer, Softcat, in its interim results.
In her results commentary, CEO Sam Mudd struck an upbeat tone as she confirmed expectations that operating profit will come in flat in its current year (despite it absorbing £4.5m in “cost normalisation”).
Gross profit growth is expected to accelerate from 2.5% to “high single-digit to low double-digits” in 2027, she added.
“We have now passed the anniversary of the Microsoft incentive changes and the tough comparative from the private sector sales realignment, and have seen strong momentum continue into the early weeks of FY27, reinforcing our confidence in the year ahead,” she stated.
Bytes-sized breakdown
Breaking down its top line, BTG saw software gross invoiced income bounce 11.4% to £2.23bn.
Internal and external services GII rose by 15.5% to £39.3m and by 36% to £37.1m, respectively, while hardware GII dropped back 6% to £31.2m.
Headcount rose 6.9% to 1,331.
Despite acknowledging the short-term pain it caused in the early part of BTG’s fiscal 2026, Mudd said segmenting its private sector customers by size will enable it to sell more services in partnership with vendors including Microsoft.
“Customers of different sizes consume services differently,” she said.
The firm will “further sharpen” its go-to-market by making its Bytes and Phoenix brands exclusively focused on the private and public sectors, respectively (Bytes currently generates 87% of GP from the private sector and Phoenix 98% of its GP from the public sector), Mudd said.
Summing up the performance, Mudd characterised its fiscal 2026 as “a year of adaptation and evolution against a more challenging market backdrop”.
