Bytes Technology Group (BTG) has announced impressive financial results for the first half of 2023, showcasing robust growth and strategic advancements in the software, security, AI, and cloud services sector. The UK and Ireland-based company’s Chief Executive Officer, Neil Murphy, expressed delight in their strong performance, highlighting the critical role of a skilled workforce and strong vendor relationships.
Key Financial Metrics for H1 FY24
| Metric | H1 FY24 | H1 FY23 | % Change YoY |
|---|---|---|---|
| Gross Invoiced Income (GII) (£ million) | £1,081.6m | £786.2m | 37.6% |
| Revenue (£ million) | £108.7m | £93.5m | 16.3% |
| Gross Profit (GP) (£ million) | £75.3m | £65.5m | 15.0% |
| Gross Margin % (GP/Revenue) | 69.3% | 70.1% | -1.1% |
| GP/GII % | 7.0% | 8.3% | -16.9% |
| Operating Profit (£ million) | £30.6m | £27.3m | 12.1% |
| Adjusted Operating Profit (AOP) (£ million) | £33.9m | £29.8m | 13.8% |
| AOP/GP % | 45.0% | 45.5% | -1.1% |
| Cash (£ million) | £51.7m | £35.8m | 44.4% |
| Cash Conversion (%) | 48.7% | -2.8% | N/A |
| Cash Conversion (Rolling 12 Months) (%) | 107.2% | 65.3% | 64.0% |
| Earnings per Share (pence) | 10.60 | 9.06 | 17.0% |
| Headline Earnings per Share (pence) | 10.60 | 9.06 | 17.0% |
| Adjusted Earnings per Share (pence) | 11.71 | 10.11 | 15.8% |
| Interim Dividend per Share (pence) | 2.7 | 2.4 | 12.5% |
The standout performance for H1 FY24 was driven by a 37.6% year-on-year increase in Gross Invoiced Income (GII), surpassing £1 billion in the first half of the year for the first time in the company’s history. This remarkable growth can be attributed to strategic contract wins, particularly in the public sector, notably with the NHS and HMRC, as well as continued demand from corporate customers.
While Gross Profit (GP) showed an impressive 15.0% increase to reach £75.3 million, the GP margin remained stable at 69.3%. A significant highlight was the company’s operating profit, which surged by 12.1% to £30.6 million. Adjusted Operating Profit (AOP) followed the upward trend with a 13.8% increase to £33.9 million, representing 45.0% of GP.
Earnings per share demonstrated solid growth at 17.0%, reaching 10.60 pence. The company’s strong performance is further evident in the substantial 44.4% increase in cash, totaling £51.7 million.
The first half of 2023 witnessed substantial demand from both corporate and public sector customers for services related to security, cloud adoption, digital transformation, hybrid data centers, and remote working solutions. This demand has allowed BTG to invest in expanding its workforce, crossing the 1,000 employee milestone for the first time, while equipping them with the skills necessary to advise customers on the latest software, services, and hardware offerings.
Furthermore, Bytes Technology Group anticipates a promising future in the IT services sector, with a shift towards Artificial Intelligence (AI) products set to be a defining trend in the coming years. The company is strategically positioned to capitalize on this opportunity, thanks to its longstanding relationship with Microsoft. Notably, the company is trialling Microsoft’s Copilot product, an AI assistant feature for Microsoft 365 applications, which is set to be available more widely in the near future. Additionally, the company is looking forward to collaborating with other vendor partners developing AI software tools.
In line with its dividend policy to distribute 40% of post-tax pre-exceptional earnings to shareholders, Bytes Technology Group announced an interim dividend of 2.7 pence per share. This marks a 12.5% increase from the previous year’s interim dividend of 2.4 pence per share. The aggregate amount of the interim dividend expected to be paid out of retained earnings at the end of August 2023, but not recognized as a liability at the end of the half-year, amounts to £6.5 million.
The following dates are relevant for shareholders concerning the interim dividend:
Bytes Technology Group remains vigilant about the mixed economic backdrop and global geopolitical uncertainties. Despite these challenges, the company’s proven strategy of acquiring new customers and expanding its share of the market, coupled with strong vendor relationships and the expertise of its employees, positions them favorably for the remainder of FY24. BTG continues to pursue opportunities for growth in the ever-evolving IT services sector.
The company will be hosting a presentation for analysts and investors, scheduled for today via webcast at 9:30 a.m. BST. During this presentation, the company will delve deeper into their financial results and outlook. A recording of the webcast will be available after the event at www.bytesplc.com. The full announcement and presentation will also be accessible on their website at www.bytesplc.com from 7:00 a.m. and 9:00 a.m. BST, respectively.
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