UK's Bytes Technology H1 revenue rises 19%, beats estimates

Overview

• UK software and cloud solutions provider's H1 revenue grew 19% yr/yr, beating analyst expectations

• Gross profit for H1 rose 18% yr/yr, driven by changes to sales structure

• Company completed £25 mln share buyback and acquired CyberOne after period end

Outlook

• Bytes Technology expects FY27 GP growth in the low to mid-teens percent

• Company sees FY27 operating profit growth in the low to mid single-digit percent

• Company says demand drivers in software, AI, cyber security and infrastructure are strengthening

Result Drivers

• SALES STRUCTURE CHANGES - Co said changes to sales structure contributed to 17.8% gross profit growth in both public and private sector businesses

• SECTOR ALIGNMENT - Co completed sector alignment in July, focusing Bytes on private sector and Phoenix on public sector, supporting growth and clearer customer engagement

• STRONG DEMAND FOR SERVICES - Co said services gross invoiced income grew 41%, driven by higher demand for managed services and security, with technical delivery headcount up 17.4%

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 6 "strong buy" or "buy", 3 "hold" and 3 "sell" or "strong sell"

• The average consensus recommendation for the software peer group is "buy"

• Wall Street's median 12-month price target for Bytes Technology Group PLC is GBp450.00, about 2.6% below its October 12 closing price of GBp462.20

• The stock recently traded at 20 times the next 12-month earnings vs. a P/E of 17 three months ago

Reuters Recommended Reads

• Oct 12 - British recruiter Hays posts 14th straight net fee drop, shares fall

• Oct 12 - Microsoft president says milk faces more regulation than AI

• Oct 13 - AI models may soon self-replicate without access to data centers, Anthropic warns

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.

(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)