Bytes shares FY update as it investigates Murphy departure

Bytes has provided a market update on its fiscal year (FY) just weeks after its CEO was forced to resign over undeclared share trading.

The channel player has gone through a difficult patch having to bid farewell to Neil Murphy, who had been with the business for almost three decades after he stood down as CEO last month.

The firm managed to deliver gross and adjusted operating profit growth, with both expected to exceed 12% with gross invoiced income coming in at more than 25%.

Bytes reported a continued demand for software and services, with both enterprise and public sector customers continuing to spend over the fiscal year.

Sam Mudd, who was appointed interim CEO of Bytes Group after Murphy’s resignation, was able to update the markets on its progress for the 12 months ended 29 February.

“Our board, management and staff should be very proud of the performance delivered last year and celebrating a record year for the group. We remain committed to our successful strategy of delivering great customer service to our existing customers, acquiring new customers and increasing our share of their IT expenditure,” said Mudd.

“This strategy is underpinned by our strong vendor relationships and the commercial skills of our people and means we are well-placed to capture the significant growth opportunities ahead of us,” she added.

At the same time, the firm revealed more details of the circumstances surrounding the recent resignation of its CEO and revealed that it had launched an independent investigation to look at the resignation of Murphy and his undisclosed share transactions.

The firm shared a timeline of the lead up to the resignation with the problems triggered by a voluntary request for information from the Financial Conduct Authority, which queried some trades that had been handled by Murphy.

Murphy had indicated that he would share his responses to that request with the board, but on the day that was meant to happen, 24 February, he unexpectedly resigned.

“It transpired that  Mr Murphy  had engaged in unauthorised and undisclosed trading of the company’s ordinary shares on 66 trading days between  6 January 2021  to  10 November 2023 , totalling 119 transactions,” the firm stated.

PwC and Travers Smith are advising the committee investigating and the outcome will be shared with EY and the firm’s auditors.

“The independent committee will work with the Audit and the Remuneration Committees to ensure the proper disclosures are made, and a further prior year adjustment made, to the directors’ shareholdings table in this year’s directors’ remuneration report,” the firm stated.

“Once the committee has completed its investigation and reported to the board, the company will be able to provide a date for the release of its preliminary results for FY24. It is currently envisaged that this will be in late May or early June 2024.”

Murphy’s sudden decision to leave a business he had become synonymous with shocked the channel, and the board expressed similar emotions at the way things had turned out.

“Given  Mr Murphy’s  longstanding leadership position in the company, the board of directors is saddened as well as shocked by  Mr Murphy’s  actions, which it finds hard to comprehend. His actions were entirely at odds with the values of openness, honesty, and transparency which have been and which remain central to the group’s culture and to its ongoing success,” it stated.