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Bytes Technology Group Reports 17.8% Gross Profit Growth and Reaffirmed Outlook

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BYITGBX 462.79 0.13%

Bytes Technology Group plc (LSE: BYIT) delivered double-digit growth in the six months ended 31 August 2026, driven by strong performance across its software, hardware, and managed services divisions. Gross profit grew 17.8% year over year, supported by a 23.1% rise in public sector gross profit and a 14.6% increase in the private sector. Revenue climbed 18.7%, while operating profit rose 6.6% after absorbing planned cost normalisations, including restored bonus levels and share-based payments.

The company benefited from structural sales reorganisations launched in the prior fiscal year, which aligned operations to target customer segments more effectively. Existing clients generated 98.2% of gross profit during the period, with renewal rates reaching 115.7%. To broaden its managed cyber security offerings, the group also agreed to acquire CyberOne in October 2026, subject to regulatory approval. Meanwhile, cash conversion stood at 45.7%, and the board declared an interim dividend of 3.3p per share, marking a 3.1% increase from the prior year.

Looking ahead, management reaffirmed its upgraded full-year guidance issued in September 2026. The group expects full-year gross profit growth in the low to mid-teens percentage range, alongside low to mid single-digit operating profit growth. Investors will be observing the integration of CyberOne once national security clearances complete, as well as the impact of revised partner incentive structures introduced by Microsoft.

Key points

  • Gross profit for the six months ended 31 August 2026 grew 17.8% year over year, with public sector gross profit up 23.1% and private sector gross profit up 14.6%.
  • Revenue rose 18.7% and operating profit increased 6.6% after absorbing roughly half of expected £4.5 million in cost normalisation.
  • The company declared an interim dividend of 3.3p per share, an increase of 3.1% compared to the same period last year.
  • Full-year guidance was reaffirmed, projecting low to mid-teens percentage growth in gross profit and low to mid single-digit growth in operating profit.
  • The business agreed to acquire cyber security provider CyberOne in October 2026, subject to regulatory clearance.

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Questions and answers

What were Bytes Technology Group's half-year financial results for 2026?

Bytes Technology Group plc reported a 17.8% increase in gross profit and an 18.7% rise in revenue for the six months ended 31 August 2026. Operating profit increased 6.6%, and the company raised its interim dividend by 3.1% to 3.3p per share.

Did Bytes Technology Group update its full-year earnings guidance?

The company reiterated its upgraded full-year guidance, expecting gross profit to grow in the low to mid-teens percentage range and operating profit to increase in the low to mid single-digit percentage range.

What acquisition did Bytes Technology Group announce?

Bytes Technology Group agreed to acquire CyberOne, an award-winning managed cyber security provider built on Microsoft technology. The transaction was signed in October 2026 and remains subject to UK regulatory clearance.