Software and services deliver for Bytes

Bytes Technology Group managed to navigate through a challenging period and tap into software and services growth to deliver decent numbers for its FY25.

The channel player delivered a 11.5% improvement in GII for the 12 months ended 28 February, with a 11.4% improvement in software sales and a 24.6% climb in services contributing to that performance.

Gross profit improved to 2.5%, which was an achievement given the 0.3% decline that had been recorded in H1. The second half, which came in 4.6% up, benefitted from the firm getting through the adverse impact of Microsoft incentive changes. Public sector business was up by 7.4%.

Decisions made to invest in people to support future growth had an effect on operating profit, which was 5.6% down on the previous fiscal year.

Sam Mudd, CEO of Bytes, said the priority of the fiscal year had been on solidifying the business and making investments to support future growth: “This has been a year of adaptation and evolution against a more challenging market backdrop.

“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.

“We maintained our share of wallet with existing customers, as they invested in their IT requirements. We continued to expand our client base in both the public and private sectors, with significant framework wins in defence, and private sector enterprise client wins in retail and the energy sector, while continuing to drive momentum through the year,” she said.

The firm took steps to improve the position of the business, including introducing a fresh private sales structure, to get closer to vendors and customers, with positive signs that this move was working growing as it moved through the second half.

Efforts to keep and deepen relationships with existing customers could be seen, with 97% of gross profit coming from those established links, with the firm able to deliver a 99% renewal rate. There was also a £5m contribution from fresh customers.

The investments in staffing saw headcount increase by 6.9% to 1,331, as sales and service delivery teams were bolstered to strengthen Bytes capabilities.

Mudd said the business was in a prime position to tap into the growth areas, including AI, and continue supporting and growing its customer base.

“As agentic AI and associated technologies continue to be deployed, our customers need an integrated delivery model,” she said. “This will almost always need a deep understanding of the domain the customer operates in, and the associated data and services, to help the customer adapt within the changing technological landscape. We are well positioned, as a Microsoft Frontier Partner, to be the partner for our customers on this journey.

“Our passionate, talented, dedicated and experienced staff remain central to our success. Their ability to provide high-quality licensing advice, technical enablement and support continues to differentiate us in the market and gives us confidence as we look ahead,” she added.