Bytes Technology Group Plc announced the £19.4m purchase of cyber security firm CyberOne alongside interim results on 13 October, as first-half Revenue rose 19% and operating profit grew 6.6%. On 30 October it issued a notice on the currency Exchange Rate for its interim dividend.

What happened

Bytes (LSE:BYIT), a constituent of the FTSE All-Share index in the software and IT services sector, reported on the six months to 31 August 2026. Revenue increased to £128.3m from £108.1m and Gross Profit rose 18% to £97.1m. Operating profit reached £35.3m, up from £33.1m, and pretax profit was £40.0m, up 3.6%.

Earnings per share rose 6.1% to 12.76p. The Interim Dividend was lifted to 3.3p from 3.2p, payable on 20 November to holders on the register at 6 November. The recent notice concerns how that payment will be converted for holders, and is routine in nature.

Chief executive Sam Mudd said: "The changes we made to the Business last year are evident in our performance." He described a shift from a licensing-led reseller to a customer-centric, solutions and services-led business.

Why it matters for investors

Gross profit growth outstripped operating profit by a wide margin. According to AskTraders, operating profit as a share of gross profit dropped to 36.4% from 40.2%, which management attributes to cost normalisation as bonuses and share-based pay returned to usual levels. About half of the roughly £4.5m full-year cost fell in the first half.

Cash stood at £68.4m with no debt, down from £82.3m, after £41.3m was returned to shareholders, including completion of a £25m buyback.

The group has also had to absorb changes to Microsoft's partner incentives. Those made in January 2025 have now annualised, but a further set took effect in October 2026. That leaves a live question over the second half, which the company already expects to face a tougher comparison and slightly higher costs.

CyberOne, founded in 2005, is a managed cyber security provider with more than 80 staff, its own accredited round-the-clock security operations centre and about 90% recurring income. Beyond the initial £19.4m in cash, up to £18.0m more may be payable over 16 months depending on performance. Mr Mudd said: "Security is where our customers' budgets are increasing fastest."

In our analysis, the deal adds recurring income in a growing category, in line with the services shift management describes. It will not help this year's reported profit much: Bytes expects Amortisation of acquired intangibles to offset the deal's operating profit in FY27, with a positive contribution to Earnings Per Share in FY28.

How the shares have performed

The shares rose from 401.8p to 450.0p on 17 September, when guidance was raised, according to AskTraders. On 13 October they opened at 480.4p, 3.9% above the 462.2p prior close, and touched 494.2p before falling back to 466.0p by 8:07am.

Alliance News, via AJ Bell, reported a 0.6% decline to 459.60p that morning, and the Johannesburg listing up 0.9% at ZAR 100.30. Those are the latest prices we retrieved, so they should not be read as current. The swing within a single morning shows that the results and the deal received a mixed initial response.

What to watch next

Full-year guidance, excluding CyberOne, is for gross profit growth in the low to mid-teens and operating profit growth in the low to mid-single digits. Completion of CyberOne depended on clearance under the National Security and Investment Act, expected by the end of October, but we did not see a completion notice in the list retrieved.

The interim dividend Record Date of 6 November is the first fixed date ahead, and payment follows on 20 November. Bytes is also adding sales capacity in November, so its effect on the second half may become a topic at the full-year results.