Why Bytes Technology Shares Have Jumped over 12% Today

Bytes Technology Group (LON: BYIT), a UK and Ireland IT reseller selling software, security and cloud solutions, jumped over 12% today after its half-year trading update showed growth far outpacing plan, prompting the board to upgrade full-year guidance.

Shares closed at 401.8p yesterday and traded up to 456.2p in early dealing today, a new 52-week high, and last trading around 451p. The move takes the stock well clear of its previous 52-week peak of 443.4p and up sharply from its 52-week low of 244.5p. The group’s market capitalisation stands at approximately £999.5m.

Bytes had entered its 2027 financial year already guiding to a recovery from the prior year’s Microsoft-incentive squeeze, when changes to enterprise incentives from its largest vendor partner hit profit. This morning’s update showed first-half trading running far ahead of that plan, with invoiced income up around 19%, gross profit up around 18% and operating profit up around 6% year on year.

That outperformance let the board lift its full-year outlook from high-single to low-double-digit gross profit growth and broadly flat operating profit, guided in May, to low-to-mid-teens gross profit growth and low-to-mid single-digit operating profit growth. Net cash stood at around £68m at the half-year mark after £41.3m was returned to shareholders via dividend and buybacks, made up of a £16.3m dividend and £25.0m of buybacks, while cash conversion improved to around 45% from 34% a year earlier.

Chief executive Sam Mudd commented on the update:

We are pleased with the positive momentum in the first half across both our private and public sector businesses. 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.

Sam Mudd, Chief Executive Officer, Bytes Technology Group plc

Interim results are due on the 13th of October, which should give a fuller picture of whether the momentum is sustained.