Shares in Bytes Technology Group plc have lost a third of their value in one day following a profit warning.
The software, security, AI and cloud services specialist, based in Surrey, said trading across the first months of the year has been impacted by a challenging macroeconomic environment, leading to some deferral of customer buying decisions – particularly in the corporate sector – ahead of its AGM.
Last year Bytes began investigating the shock resignation of its former CEO Neil Murphy after he was accused of unauthorised trading in the company’s shares.
The investigation ultimately found 119 unauthorised transactions on 66 trading days between January 2021 and November 2023 which sent the London-listed stock plummeting.
However it would rebound as the software company announced a 12.3% rise in annual revenue to £207m and 12.2% leap in adjusted operating profit to £63.3m.
Sam Mudd (pictured), installed as interim CEO, was appointed to the role on a permanent basis in May 2024 while two independent non-executive directors were also added to its board. Its share price rose above 500p on that news, and it was holding steady around that mark until this morning.
After dropping 33% in one day, it now stands at 353p.
“We evolved our corporate sales division, shifting from a generalist model to specialised, customer-segment-focused teams, in line with our commitment to customer centricity,” it stated this morning.
“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 28th February 2026 and beyond.”
“For the first half, the board now expects gross profit to be at a similar level to last year and operating profit marginally lower, followed by more normalised growth in both metrics in the second half.”
Mudd said: “In recent weeks, we’ve navigated a more challenging macro environment, compounded by the near-term effect of transforming our corporate sales team. While this has affected trading, our value proposition remains strong.
“We’re seeing continued engagement, a healthy pipeline and remain confident that as these sales team changes bed in, we will be a stronger business, better aligned to meeting our customer needs and drive sustainable growth.”