Bytes Technology annual gross profit up despite Microsoft hit

(Alliance News) - Bytes Technology Group PLC said on Tuesday that strong performance in the second half of its financial year helped cushion the blow from changes to Microsoft enterprise incentives.

The Surrey, England-based enterprise software firm reported operating profit of GBP62 million for the financial year that ended February 28, from GBP66.4 million a year earlier.

But gross profit was up 2.3% to GBP167 million from GBP163.3 million.

Bytes said it had delivered financial performance that is in line with its expectations.

It said the 2026 results were dampened by changes to Microsoft's enterprise incentives and the phasing effects of the private-sector sales realignment.

"Encouragingly, performance strengthened in the second half, with gross profit growing c.6.% year-on-year in January and February 2026 against a strong comparator," the company said.

For the 2027 financial year, Bytes expects high single-digit to low double-digit percentage growth in gross profit, with operating profit broadly flat as it absorbs GBP4.5 million of cost normalisation.

From July 2026, Bytes said it will further align its "go-to-market" approach, with Bytes Software Services focused on the private sector, and Phoenix Software on the public sector.

Bytes plans to release its annual financial results on May 12.

Shares in Bytes were up 0.9% to ZAR69.78 on Tuesday morning in Johannesburg.

By Artwell Dlamini, Alliance News senior reporter South Africa

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