Bytes hits £1.8bn GII as new CEO Sam Mudd outlines continued focus around Copilot, Azure and security
“And what we're seeing within the market is that customer demand remains high around the critical areas of cloud adoption, backup storage and security, and the security theme in particular is a very longstanding one. We're confident about the future," Mudd tells CRN
Bytes Technology Group has announced robust financial results for the year ending 29 February 2024, after teasing growth "comfortably in the double digits" back in March.
Three months into her tenure, CEO Sam Mudd confirms that following the encouraging set of financial results, the rest of the calendar year will focus on continuing initiatives around Azure, Copilot, security and steadying the business.
The company achieved a 12.2 per cent increase in adjusted operating profit, driven by strong performance across all business areas.
Despite the challenging economic climate, Bytes also reported a substantial 26.7 per cent growth in gross invoiced income, rising to £1.8bn.
The group's gross profit also saw a notable increase of 12.5 per cent, reaching £145.8m, which the company attributes to expanding its client base in both public and corporate sectors and increased its market share among existing customers.
The market has responded positively to Bytes' first results announcement under Mudd, with shares up 2.8 per cent on yesterday's closing price.
Mudd attributes this success largely to Bytes' strong commercial and overall organisation and the retention of key cadres.
"I think that we've got tremendous, long tenure with several very experienced people in the business like Jack [Watson]. We've worked together for many years, decades in some cases, including with many account managers and directors," she tells CRN.
Over the past three months, Bytes has been boosting its leadership, most recently with the re-hire of Hayley Mooney, who returned to the business after five years spent as UK managing director of Crayon.
This level of commercial experience allows Bytes to stay close to its customers' needs and is one of the areas where the tech giant will be looking to do ‘more of the same'.
"Of course, we're bringing in new talent, we're progressing staff within the business. And with them, we'll be looking to do more of the same – continue that proximity with customers; knowing them well and having regular touch points, talking to them about their future strategies and expenditure, budget requirements, and just wrapping the right resources around each account."
The strong financial performance comes alongside a substantial reinvestment back into the business.
Shareholder return and reinvestment into the business
Bytes plans to give back 40 per cent of its earnings to shareholders off the back of a bumper year. The company has proposed a regular dividend of 6.0 pence per share, totaling £14.4m.
Due to strong performance, the group has also suggested an extra dividend of 8.7 pence per share, adding up to £20.9m.
The leadership team is directing reinvestments back into the business, particularly in the areas of "personnel, internal systems, vendor accreditations to help us navigate the complexities for future growth with our customers," Mudd confirms.
"And what we're seeing within the market is that customer demand remains high around the critical areas of cloud adoption, backup storage and security, and the security theme in particular is a very longstanding one. We're confident about the future."
On whether Bytes can sustain its organic growth trajectory and any potential acquisitions, Mudd maintains that the group is open to future buyouts, but target companies need to be firmly aligned in terms of culture and business objectives.
"Over the years we've been very clear about this strategy is to focus on the organic growth within the business. We've consistently produced the right results year after year," Mudd clarifies.
"We do remain open to opportunities if they present themselves but they've got to align culturally to our business. That's a really important aspect of of our success formula, and we've set the bar pretty high with acquisition many years ago. On that basis, yes, will will remain open. At the moment, the forward focus is on organic momentum."
In April 2023, Bytes acquired a 25.1 per cent stake in Cloud Bridge Technologies Limited for £3m.
Forward focus and Copilot initiatives
Bytes has been very clear that it'll continue to focus on its core expertise areas of Microsoft services, particularly around Azure and Copilot, as well as cybersecurity. Much like its competitors, Bytes is looking to build a strong business line around Microsoft's AI proposition.
According to Mudd, success here will also come from close customer relationships and a thorough understanding of business needs.
"In most cases, it's about educating. So we're working with our customers who are in the early stages of understanding what the barriers of technology are," she says.
"It's about looking at the preparedness that needs to go into potential deployment. So you're looking at security, this segmentation, you're looking at adoption and change management, these new ways of working in the customer environment. You've got to take everybody with you. And we're equipped to deal with all of those areas I've just mentioned."
"We've made a substantial investment in Copilot internally to make sure we are customer zero for Copilot, which is very much that strategic piece for us in terms of investing in Copilot," CTO David Rawle clarified to CRN in a separate conversation.
"Not just as an end-user device tool, but also using it structurally to be able to respond to customers better,align ticket workflows, pre sales requests etc.
"We're using it to enable the system to interpret requests and send it straight to the right person rather than having to triage that first line."