Bytes posts FY26 top‑line growth as Microsoft incentive drag eases

(Sharecast News) - Software and security firm Bytes Technology reported further top‑line growth for the year ended 28 February on tuesday, with gross invoiced income rising 11.5% as both software and services delivered double‑digit increases.

Bytes Technology said revenue edged 1.6% higher to £220.5m, while gross profits improved 2.5% to £167.3m. Operating profits, on the other hand, fell 5.6% to £62.7m, which Bytes attributed to slower gross profit growth and increased investment in people to support future expansion.

The FTSE 250-listed group highlighted that gross profit trends had strengthened through the second half as the one‑year impact of Microsoft's incentive changes fell away and refinements to the private‑sector sales structure bedded in.

Public‑sector gross profits rose 7.4% despite the incentive changes, while private‑sector gross profits dipped 0.3% as Bytes reshaped its sales approach to improve customer centricity.

Bytes said cash at year‑end stood at £98.6m, with cash conversion of 105%.

The board declared a final dividend of 7p per share, taking Bytes' full‑year payout to 10.2p, and also announced a new £25m share buyback programme. Bytes returned £74m to shareholders during the year.

Looking ahead, Bytes said its FY27 outlook "remains consistent" with previous guidance, with management expecting to deliver "high single-digit to low double-digit percentage growth" in gross profits, while operating profits were expected to be "broadly flat" as it absorbs roughly £4.5m of cost normalisation relating to higher technology costs and a return to normal bonus levels.

As of 0900 BST, Bytes Technology shares were up 0.69% at 320.20p.

Reporting by Iain Gilbert at Sharecast.com

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