Bytes Technology Group says it remains “confident” of hitting full-year expectations, despite acknowledging that a recent sales restructure – along with Microsoft incentive changes – dented its first-half numbers
The LSE-listed software licensing, cloud and AI provider saw gross invoiced income hike 9.1% year on year to £1.34bn in the six months to 31 August 2025.
But gross profit was roughly flat at £82.4m, while operating profit rolled back 7% to £33.1m on the back of higher headcount, salary and NI costs.
“Internal and industry” headwinds
The 1,266-employee outfit battled two short-term headwinds during the period in the form of “internal and industry changes”.
Zooming in on the former, BTG’s gross profit declined by 0.6% as it “settled into” a new corporate sales structure launched at the start of its financial year.
The change – which saw BTG reorder its sales teams by seat count – required account managers to hand over around 750 relationships and establish pipelines in their new accounts, it stressed.
BTG’s Microsoft gross invoiced income growth slowed to 7.6% year on year during the period as it adjusted to the vendor’s well-publicised 1 January Enterprise Agreement incentive reductions.
The shake-up had a bigger impact on BTG’s public sector business, where gross profit rose 1.6%.
Echoing the sentiments of US-based peer Insight, BTG said it expects the changes to have a “smaller impact” in its second half, however.
This is partly because EA price increases set to go live on 1 November will make Microsoft’s Cloud Solution Provider model “relatively more attractive to customers”.
“Positive momentum”
In its interim results statement, CEO Sam Mudd hailed BTG’s “resilient performance”, adding that it built “positive momentum through the period as we settled into our new corporate sales structure”.
“We are particularly pleased that retention has remained very high, consistent with prior periods, amongst both our sales team and customer base which provides a solid foundation for future growth,” Mudd stated.
“We are also pleased with how our teams adapted to the changes to Microsoft’s partner incentives for EAs; successfully transitioning corporate customers to the higher-margin Microsoft CSP programme, and broadening our software portfolio and doubling down on services across the business, again providing solid foundations for future growth.”
All eyes will now be on the full-year results of peer Softcat, which recently indicated that it is continuing to enjoy gross and operating profit growth in the “teens” . They are set to be unveiled on 22 October.
Although its shares fell around 8% on the news, BTG said it remains “confident of delivering a full year outcome within the range of market expectations”.
