Bytes Technology annual profit falls; splits CFO and COO roles

(Alliance News) - Bytes Technology Group PLC on Tuesday reported lower annual profit as it adapted to structural change in the IT market, but its shares rallied.

The Surrey, England-based enterprise software firm saw its pretax profit decline 6.4% to GBP69.8 million for the financial year that ended February 28, from GBP74.6 million a year earlier.

But revenue for the year rose 1.6% to GBP220.6 million from GBP217.1 million.

Gross profit was up 2.5% to GBP167.3 million from GBP163.3 million, as the one-year adverse effect of the Microsoft incentive changes ended in January 2026 and the strategic refinement of the private-sector sales structure to strengthen medium-term growth had settled.

Administrative expenses grew by 7.6% to GBP104.3 million from GBP96.9 million.

Bytes declared a final dividend of 7.0 pence, up 1.4% from 6.9p, but this was insufficient to boost the total payout. Total dividend nearly halved to 10.2p from 20.0p. Bytes announced a new GBP25 million share buyback.

Earnings per share and headline EPS dropped 6.1% to 21.4p from 22.8p.

Commenting on the results, Bytes Chief Executive Officer Sam Mudd said the group had delivered its 2026 results against a more challenging market backdrop, during a period of structural change in the IT market.

"We focused on optimising our business for continued growth, segmenting our private sector sales team to better align with our customers and vendors, managing Microsoft's transition of incentives to consumption-based and service-led funding, and increasing our services portfolio and associated profits, in line with our strategy," Mudd said.

Bytes also said it has decided to split the combined roles of chief financial officer and chief operating officer, held by Andrew Holden. Holden will stand down as CFO once a suitable replacement has been appointed, at which date he will step down from the board. Holden will remain with the company and transition into the COO role.

Looking ahead, Bytes maintained its outlook for the 2027 financial year. In March, it said it expected 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.

Shares in Bytes were up 6.4% to ZAR74.67 on Tuesday morning in Johannesburg, and they rose 6.2% to 337.60p in London.

By Artwell Dlamini, Alliance News senior reporter South Africa

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