Bytes Technology Group (LSE:BYIT), the UK and Ireland software, security, AI and cloud services specialist, said trading ran ahead of expectations in the half year to 31 August, prompting an upgrade to its full-year guidance.
Gross invoiced income is estimated to have risen about 19% year-on-year in the period, with gross profit up around 18%.
Operating profit growth lagged at an estimated 6%, reflecting previously flagged cost normalisation: higher technology spending on strategic projects and a return to more typical bonus levels.
The board now expects full-year gross profit growth in the low to mid-teens, with operating profit growth in the low to mid single digits.
Net cash stood at about £68m at the half-year end, after the group returned £41.3m to shareholders through a £16.3m final dividend and £25m of share buybacks.
Cash conversion reached around 45%, up from 34% in the prior-year half, though the group noted its normal weighting toward the second half.
"Customer demand for software, cloud and security solutions has remained strong, and AI is becoming a more meaningful driver of growth in our core business areas", said chief executive Sam Mudd.
Bytes Technology Group will publish its half-year results on 13 October.
News Intelligence what this means for the company
Bytes Technology upgraded full-year profit guidance after gross invoiced income and gross profit both grew roughly 19% and 18% respectively in H1—outpacing the 6% operating profit growth, which was held back by planned cost normalisation (higher tech spending and bonus normalisation). The company enters the second half with £68m net cash and a 45% cash conversion rate, having already returned £41.3m to shareholders.
The upgrade reflects genuine operational momentum in software, cloud and security demand, though the widening gap between gross profit growth (18%) and operating profit growth (6%) underscores that margin expansion remains constrained by deliberate investment and cost normalisation. The board's guidance for low-to-mid-teens gross profit growth but only low-to-mid single-digit operating profit growth for the full year signals that near-term profitability leverage is limited despite strong top-line momentum.
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