Bytes Technology shares tumble 20% after flagging trading challenges
Bytes Technology Group PLC said on Wednesday its performance for the first months of its financial year was hurt by challenging market conditions, coupled with changes to its corporate sales team.
In a statement before its annual general meeting on Wednesday, the Surrey, England-based enterprise software firm said it expects gross profit to be at a similar level to last year and operating profit to be marginally lower, followed by more normalised growth in the second half to February 28, 2026.
For the six months that ended August 31, 2024, gross profit rose 9.0% to £82.1 million from £75.3 million a year before, and operating profit was up 16% to £35.6 million from £30.6 million.
Shares in Bytes were down 22% at 395.00 pence each on Wednesday morning in London. In Johannesburg, they were down 22% at R 94.85 each.
Bytes said trading across the first months has been hit by a ‘challenging macroeconomic environment’, resulting in some deferral of customer buying decisions.
The company said the shift in its corporate sales division from a generalist model to specialised, customer-segment-focused teams also hurt performance.
‘While this transition has resulted in a longer-than-expected readjustment period, it positions us to deliver more relevant solutions and drive sustainable services annuity income growth during the second half of the financial year ending 28 February 2026 and beyond,’ Bytes said.
The impact of changes to Microsoft enterprise incentives is weighted more to the first half ending August 31, Bytes said, due to high levels of renewals in March and April around the public sector year-end and June around Microsoft Corp’s year-end.
‘In recent weeks, we’ve navigated a more challenging macro environment, compounded by the near-term effect of transforming our corporate sales team,’ Chief Executive Officer Sam Mudd said, adding: ‘While this has affected trading, our value proposition remains strong.’
Bytes said it will provide the full-year guidance in October.
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