Bytes Technology Group (BTG) has stressed it expects to return to “normalised growth” in its fiscal second-half after a profit warning knocked 25% of its share price.
The first four months of the LSE-listed software licensing giant’s fiscal 2026 have been impacted by a “challenging macroeconomic environment”, it said in an AGM statement this morning.
The Microsoft ally – which smashed the £2bn top-line barrier in its fiscal 2025 – now expects first-half gross profits to be in line with last year and operating profit to be “marginally lower”.
The announcement immediately knocked 25% off BTG’s share price, sending it to its lowest level since 2023.
It comes despite LSE-listed peer Softcat raising its full-year guidance in late May.
In the AGM statement, BTG CEO Sam Mudd said the more challenging backdrop had been “compounded by the near-term effect of transforming our corporate sales team”.
This transition – which is designed to shift BTG from a generalist to a specialist model – had taken longer than expected, BTG said.
“While this has affected trading, our value proposition remains strong,” Mudd stated.
“We’re seeing continued engagement, a healthy pipeline and remain confident that as these sales team changes bed in, we will be a stronger business, better aligned to meeting our customer needs and drive sustainable growth.”
The impact of well-publicised changes to Microsoft enterprise incentives is weighted more to the first half due to high levels of renewals in March and April around the public sector year end and June around Microsoft’s year end, BTG added.
Talking to IT Channel Oxygen last October, Mudd said the Microsoft changes, while “more severe than previous years”, will have “no material impact on us in this financial year or the next”.
Mudd goes into more depth on how BTG sees the Microsoft changes in this more recent interview. “It was a very transparent move for Microsoft and they’ve been very open with partners about this. It’s more about the services and taking the customer on the journey, and less about the transaction,” she said.
BTG said it expects to return to” more normalised growth” in both gross profit and operating profit in the second half.
