Bytes updates on ‘positive’ H1

Bytes Technology Group has continued to reward those investors that backed the channel player when it went public back in 2020 with an upbeat half-year trading update.

The firm has revealed that it enjoyed strong trading conditions in the six months to 31 August 2022, with all the key trackable metrics up, including year-on-year growth in gross invoiced income and gross profit of more than 20%. Adjusted operating profit grew in the high teens, with spending continuing in both the private and public sector customer bases.

Bytes also revealed that it was expecting a cash balance of around £35m at the end of the first half of the 2023 financial year, after accounting for tax and £25m of dividends.

The firm will release the full details of its first-half performance next month, but investors should be cheered by the insights shared today.

Neil Murphy, CEO of Bytes Technology Group, said its fiscal year had gone well so far and there were signs that the momentum would continue.

“We’ve made a very positive start to the year, extending our track record of delivering double-digit growth since our IPO [initial public offering] in 2020,” he said.

“Despite the difficult economic conditions, corporate and public sector organisations continue to invest in their IT systems. We are well placed to capture these growth opportunities thanks to our strong partnerships with many of the world’s leading software companies and high levels of customer service,” he added.

Those balanced comments about the ability to navigate future challenges echo statements made by some other publicly listed channel players that have also shared numbers in recent weeks.

Last week, Jesper Trolle, CEO of Exclusive Networks, used the firm’s first-half results to talk about the state of the market.

“We recognise the increasingly challenging macroeconomic environment worldwide, however, our strong start to the year carrying on into the second half of the year, robust forward indicators and the growing strategic importance of cyber security, provide us with good visibility for the rest of 2022,” he said.

Mike Norris, CEO of Computacenter, also talked of “robust” trading in its first half when it updated markets last week and commented on the state of the market going forward.

“Our customers’ commitment to investment in technology feels extremely robust, despite well-publicised and difficult economic conditions around the world,” he said. “This gives us confidence for 2023 and beyond.”

Andrew Belshaw, interim CEO at Gamma, was also able to talk about the ability of those with strong balance sheets and positive first halves to take that into challenging times, with rising inflation and a cost-of-living crisis.

“Gamma is well-placed to navigate the publicised macro-economic headwinds,” he said. “We are a leader in a market with long-term structural growth, have a high degree of recurring revenue and have been and will continue to be strongly cash generative. We have a robust balance sheet that will allow us to continue to invest in the business as well as support organic growth with selected acquisitions,” he added.