Audited Results

About this update from Bytes Technology Group Plc

[{"type":"text","content":"\n \n 13 May 2025 \n Bytes Technology Group Plc \n (\"BTG\" or \"the Group\" or \"the Company\") \n   \n Audited results for the year ended 28 February 2025 \n Strong partnerships drive consistent growth \n   \n Bytes Technology Group plc (LSE: BYIT, JSE: BYI), one of the UK and Ireland's leading software, security, AI and cloud services specialists, today announces its financial results for the year ended 28 February 2025 (2024/25). \n   \n Financial performance \n   \n \n \n \n \n \n \n \n Year ended 28 February 2025 \n \n \n Year ended 29 February 2024 \n \n \n % change year on year \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Gross invoiced income (GII) 1 \n \n \n £2,099.8m \n   \n \n \n £1,823.0m \n \n \n 15.2 \n \n \n \n \n Revenue 2 \n \n \n £217.1m \n \n \n £207.0m \n \n \n 4.9 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Gross profit (GP) \n   \n \n \n £163.3m \n   \n \n \n £145.8m \n   \n \n \n 12.0 \n \n \n \n \n Operating profit \n   \n Operating profit/GP% \n \n \n £66.4m \n   \n 40.7% \n \n \n £56.7m \n   \n 38.9% \n \n \n 17.1 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Cash \n \n \n £113.1m \n \n \n £88.8m \n   \n \n \n 27.4 \n \n \n \n \n Cash conversion 3 \n   \n \n \n 113.8% \n \n \n 116.4% \n \n \n \n \n \n \n \n Earnings per share (pence) \n \n \n 22.78 \n \n \n 19.55 \n \n \n 16.5 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Final dividend per share (pence) \n   \n Special dividend per share (pence) \n \n \n 6.9 \n   \n 10.0 \n   \n \n \n 6.0 \n   \n 8.7 \n \n \n 15.0 \n   \n 14.9 \n \n \n \n \n   \n Financial highlights \n   \n -    GII exceeded £2bn for the first time, increasing by 15.2%, primarily driven by software. \n -    GP growth of 12.0%, with 8.9% corporate growth and 18.2% public sector growth, and double-digit growth in software and services. \n -    Operating profit increased by 17.1%, with the operating profit / GP margin increasing to 40.7%.   \n -    Final ordinary dividend of 6.9p, resulting in a full-year dividend of 10.0p, up 15.0%, together with a special dividend of 10.0p. \n -    Strong balance sheet with closing cash of £113m and 114% cash conversion. \n   \n 1 GII is a non-International Financial Reporting Standards (IFRS) alternative performance measure that reflects gross income billed to customers adjusted for deferred and accrued revenue items. GII has a direct influence on our movements in working capital. \n 2 Revenue is reported in accordance with IFRS 15 Revenue from Contracts with Customers. Under this standard, the Group is required to exercise judgement to determine whether the Group is acting as principal or agent in performing its contractual obligations. Revenue in respect of contracts for which the Group is determined to be acting as an agent is recognised on a 'net' basis (the GP achieved on the contract and not the gross income billed to the customer). Our key financial metrics of GII, GP, adjusted operating profit and cash conversion are unaffected by this judgement. \n 3 Cash conversion is a non-IFRS alternative performance measure that divides cash generated from operations less capital expenditure (together, free cash flow) by operating profit. In prior years, the measure divided 'free cash flow' by adjusted operating profit. Accordingly the previously reported cash conversion for the year ended 29 February 2024 of 104.3% has been revised to 116.4% above. \n   \n Operational highlights \n -    Existing customers contributed 97% of our GP in this year (2023/24: 97%), at a renewal rate of 109% (2023/24: 109%). \n -    Headcount growth of 17.8% to 1,245 (29 February 2024: 1,057), with focus on bolstering sales and service delivery teams while ensuring support areas also grow to support the expanding business. \n -    Continued to grow our physical footprint by opening offices in Sunderland and Portsmouth, expanding floorspace in London and, towards the end of the year, the acquisition of two buildings adjacent to our Leatherhead office to cater for our further expansion \n -    Renewed our Microsoft Azure Expert status for provision of managed services and secured more security and cloud specialism. \n -    Received multiple vendor awards, including from Palo Alto Networks, Axonius, Check Point, Sophos, Cato Networks, Bitdefender, Adobe and Druva. \n -    Both Bytes Software Services and Phoenix Software named among the UK's top 50 Best Workplaces 2024. \n \n Sam Mudd, Chief Executive Officer, said: \n   \n \"I am proud to report another strong set of results for BTG, marked by a significant rise in operating profit. This performance reflects robust and sustained demand for our comprehensive suite of software, solutions, and services. Despite a challenging macroeconomic environment, we have not only deepened our relationships with existing clients-securing a greater share of their IT spend-but also successfully expanded our footprint across both public and corporate sectors. \n   \n The Group continues to make investments in personnel, systems, services and new vendor accreditations to drive growth and support our customers to navigate the complexities of the evolving IT market where innovation, cloud and security are only becoming more important. The strength of our relationships with Microsoft and many other top-tier vendors, such as Adobe, AWS, Check Point, Dell, VMware and Service Now, allows us to seize exciting opportunities in cloud adoption, data and workload migrations, storage, security and virtualisation technologies. We continue to expand our collaboration with customers as they roll out emerging AI technologies like Copilot, working closely with their teams to embed these tools into their businesses to support growth and drive efficiency. \n   \n The sustained demand in structural growth areas such as cloud, security and AI, our commitment to customer service, our expanding technical capabilities and our high levels of accreditation underpin our confidence for continued strong growth in our financial year 2025/26. \n   \n I have been hugely impressed by the commitment and professionalism of all of our staff as they remained focused on delivering our strategic priorities in 2024/25, and wish to extend my gratitude for their hard work and dedication to the business. Finally, I would like to thank our clients for their support and entrusting their business to us. Together, our staff and customers are our lifeblood and will always be our top priority. \" \n   \n Outlook \n   \n The Group traded strongly in financial year 2024/25, while operating in highly competitive markets and despite challenging macroeconomic conditions. Our focus remains on executing our growth strategy by nurturing existing customer relationships, extending our strong vendor partnerships, and leveraging the technical skills of our service delivery teams. We are well positioned to respond to the evolving demands we see in our markets, including cloud computing, cybersecurity, AI and managed services and deliver another year of double-digit gross profit growth together with high single-digit operating profit growth in financial year 2025/26. \n   \n Analyst and investor presentation \n   \n A presentation for sell-side analysts and investors will be held today at 09:30 (BST) via a video webcast that can be accessed at: \n   \n https://sparklive.lseg.com/BytesTechnologyGroup/events/5e028343-b396-4384-a339-1cb2d82ae8eb/btg-plc-full-year-results \n   \n A recording of the webcast will be available after the event at bytesplc.com . The announcement and presentation will be available at bytesplc.com from 07:00 and 09:00 (BST), respectively. \n         \n   \n Enquiries: \n   \n \n \n \n \n Bytes Technology Group plc \n \n \n Tel: +44 (0)1372 418500 \n \n \n \n \n Sam Mudd, Chief Executive Officer \n Andrew Holden, Chief Financial Officer \n James Zaremba, Investor Relations \n \n \n   \n \n \n \n \n \n \n \n   \n \n \n \n \n Sodali & Co \n \n \n Tel: +44 (0)2072 501446 \n \n \n \n \n Elly Williamson \n \n \n   \n \n \n \n \n Jane Glover \n \n \n   \n \n \n \n \n Maria Zander \n \n \n   \n \n \n \n \n \n   \n Forward-looking statements \n   \n This announcement includes statements that are, or may be deemed to be, 'forward-looking statements'. By their nature, forward-looking statements involve risk and uncertainty because they relate to future events and circumstances. Actual results may, and often do, differ materially from forward-looking statements. \n   \n Any forward-looking statements in this announcement reflect the Group's view with respect to future events as at the date of this announcement. Except as required by law or by the UK Listing Rules of the Financial Conduct Authority, the Group undertakes no obligation to publicly revise any forward-looking statements in this announcement following any change in its expectations or to reflect events or circumstances after the date of this announcement.  \n _________________________________________________________________________________________ \n   \n Chief Executive Officer's review \n   \n Performance overview \n   \n At BTG we are driven by a clear vision: to help organisations succeed in a world of change, through trusted partnerships and transformative technology. I'm proud to say that in 2024/25 we lived up to this vision. Thanks to our great people, across Bytes Software Services and Phoenix Software, our loyal customers and our vendor partners, we helped more businesses and public sector organisations than ever to meet their objectives through innovative IT solutions. \n   \n In doing so we achieved another strong set of financial results, with a 15.2% increase in gross invoiced income, a 12.0% rise in gross profit, a 17.1% increase in operating profit and over 100% cash conversion. We have doubled all these income metrics in our five years as a listed entity, while achieving more than 100% cash conversion, enabling us to distribute the majority of these growing earnings to shareholders while maintaining a strong balance sheet - and, our track record of double-digit gross profit growth now runs well over a decade, with most of our current senior management with us throughout this period. \n   \n This strong performance comes despite the challenging economic climate, underpinned by our broad range of software and IT services offerings from leading vendors and software publishers, the robust nature of IT spending across the UK and Ireland, our highly diversified customer base and our ability to gain market share. We estimate that our share of the UK and Irish markets is around 4%, and we have updated our medium-term plan to ensure we continue to take advantage of this market share opportunity and our positive exposure to some of the faster-growing areas of IT budgets in cloud, security, data and AI. \n   \n Value proposition \n   \n Customers choose to partner with BTG because of the broad range of solutions and services we offer, including multi-cloud migration and adoption, digital transformation, storage, AI and a wide array of security products. Many have built long-standing relationships with us over many years, underpinned by our excellent software advisory expertise and knowledge around procurement routes, which enables us to guide customers on best value. We intend to double down on this strength by investing more in pre-sales and specialist technical skills, allowing us to service a larger market and scale up to meet our customers' needs. We are also actively monitoring opportunities to accelerate our capability through M&A, with a focus on cross-sell potential, vendor specialism and solutions expertise, benchmarking for quality and cultural fit against our existing business. \n   \n Examples of our services delivery capability include a consultancy team with expertise across the entire Microsoft Cloud and AI portfolio; our security operation centre and 24x7 Microsoft Cloud Solutions Provider (CSP) support offering; plus governance, risk and compliance (GRC), and software asset management (SAM) and IT asset management (ITAM) solutions, including licensing spend optimisation supported by our own IP in the form of Quantum and License Dashboard. The expansion of our IT services capability is further enhanced by the renewal of our Microsoft Azure Expert status for providing managed services, along with attaining 11 service delivery specialisations (four in security solutions) and six solution-partner designations from Microsoft. \n   \n We have seen strong interest in AI products, including Microsoft's Copilot for M365 and we continue to develop associated in-house services to support customer readiness and adoption. We will continue to expand our existing in-house AI-dedicated teams, creating repeatable sector-specific solutions with broader data and generative AI (GenAI) services across our vendor offerings as this income stream continues to grow. \n   \n In addition to our partnership with Microsoft, we have also continued to deepen our relationships with other key partners, and are especially pleased to have been recognised by leading industry vendors including Palo Alto Networks, HP, Nutanix, Check Point, Sophos, Cato Networks, Bitdefender, Adobe and Druva , reflecting the status and high esteem that the Group has with global technology leaders. These awards are highly competitive, and our success is testament to the expertise of our staff, our collaborative approach with partners and the customer success stories that we deliver. \n   \n Vendor alignment \n   \n We work with our vendors to align our sales efforts and service offerings with their strategic objectives, and they incentivise us accordingly. This means staying agile to adapt to vendors' incentive programme updates - an ongoing part of our business with which we are well accustomed. Microsoft channel incentives are frequently changed, and we have a good track record of reacting to these while maintaining gross profit levels. \n   \n This year, Microsoft communicated a particular amendment to its enterprise agreement program, reducing certain transactional incentives, in advance of it taking effect in January 2025. This provided time for us to prepare and to realign our software and services offerings, as we have often done in the past, with heightened focus on transitioning corporate customers to CSP and providing more services, both in line with our existing strategy. We were able to manage the impact in the final two months of our financial year with our gross profit growth in that period remaining in line with the overall gross profit growth rate for the full year. We were also pleased that Microsoft recognised that enterprise agreements remain a key part of public sector procurement, with a smaller rate reduction applied, which helped mitigate the impact of the changes as we entered the new financial year with March and April being higher volume months for public sector contracts. \n   \n Going forward we believe our wide vendor landscape and extensive range of products and services will enable us to absorb individual program changes such as this and drive our continued growth, and that our focus on customers with fewer than 5,000 employees remains a sweet spot with our vendors who value our efficient reach into this part of the market. \n   \n People \n   \n We are proud of the energy, enthusiasm and professionalism demonstrated by our people, now totalling 1,245 staff across multiple offices and regions. They do a tremendous job supporting our customers and providing outstanding service. We continue to focus on targeted recruitment and training, and on attracting talent into front-end sales, delivery teams and all supporting areas, and on apprentices through to senior roles to help with our ambitious growth plans. \n   \n As a management team, we are extremely pleased with the way our people continue to work hard in these challenging times, and embrace our collaborative, team-based culture. People are at the heart of business and following a year of external and internal transition I am committed to improving this year's Employee Net Promoter Score ('eNPS') of 57 which, while still above the industry average, is below the previous high level of 71. To harness the strength of our business further, and protect our culture as we grow, we will appoint our first chief people officer in the 2025/26 financial year. \n   \n In August 2024 we launched our fourth Share Save Plan, which has again been well received by our employees, with more than 50% participating in one or more of these plans. August 2024 also saw the vesting of our first Share Save Plan, which was launched in 2021, with participants now able to exercise their options and become shareholders in the BTG Group. \n   \n To support the growth in sales and people, we are investing in both our internal and customer-facing systems and in our office environments, including expanding our regional presence with new offices in Sunderland and Portsmouth and purchasing the two buildings immediately adjacent to our existing offices in Leatherhead, to cater for our further expansion. This will improve our staff user experience and drive internal efficiencies, while more closely supporting our customers and making it easier for them to do business with us. \n As an evolution of our customer-centric approach, we have realigned our corporate sales teams from a generalist structure into enterprise (>10k seats), corporate (2-10k seats), and mid-market (<2k seats) focused teams. This includes investing in senior leadership for these teams, to increase the relevance of their go-to-market approaches and customer experiences to their customer bases. This also bodes well with our vendors, especially Microsoft, which align in this manner and mirrors the successful segmentation we have operated in our public sector team for some time. \n   \n Sustainability \n   \n We are committed to implementing our strategy in a responsible manner, with sustainability rooted in everything we do. Our Sustainability Framework aims to deliver positive outcomes for our stakeholders across the key themes we have identified as most relevant for the environment in which we operate. Within each theme - financial sustainability, corporate responsibility, stakeholder engagement and good governance - we set ourselves focus areas that drive our activities. Through our staff-led working groups, we allocate time and resources to various environmental initiatives and to corporate social responsibility activities. We remain committed to supporting diversity throughout our business and are proud of the balance represented across our people. We continue our efforts to align with broader diversity targets to reflect the society in which we, and our stakeholders, operate. More details of our sustainability initiatives are set out below. \n   \n Dividend \n   \n Our dividend policy is to distribute 40-50% of the Group's post-tax pre-exceptional earnings to shareholders by way of normal dividends increasing from 40% in 2023/24 to reflect share-based payments no longer being treated as exceptional. Accordingly, we are pleased to confirm that the Board has proposed a final dividend of 6. 9 pence per share and an additional special dividend of 10.0 pence per share that, subject to shareholder approval, will both be paid on 25 July 2025 to shareholders on the register at 11 July 2025. \n \n   \n \n   \n Continued focus on environment, social and governance \n   \n Our approach to responsible business and environment, social and governance (ESG) is aimed at helping to build a sustainable future and create long-term value for the Group and its stakeholders. Our strategy is underpinned by our purpose and values, which foster an aligned culture across the organisation. During the period, we continued to progress our ESG initiatives in the following ways. \n   \n Achieved Science Based Targets initiative validation and improved rating scores \n   \n At the end of June 2024, we received Science Based Targets initiative (SBTi) validation for our near-term and net zero carbon reduction targets - and, we continue to align our activities to our Scope 1 and 2 targets for 2025/26. As part of the continual commitment to disclosures and transparency, we made our annual submission to the CDP for 2024/25 and were pleased to receive a B rating - an increase from a C rating in 2023/24. This comes in addition to our ISS ESG Corporate Rating, which also increased in 2024/25 from a C- to a B-, and which is well within the top decile for our peer group. To move our sustainability goals forward, we initiated a carbon literacy awareness programme to educate, inform and engage employees. \n   \n We continue to monitor the progress of the IFRS S1 and S2 standards being adopted by the UK Government through the UK Sustainability Reporting Standards, and will align with these as required. The standards will incorporate the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), so we expect to be in a good position to transition, having fully complied with the TCFD's recommendations in our previous Annual Report. Within our businesses, we are supporting the evolution to greener transport to reduce business travel and commuting emissions. The Group successfully implemented an electric vehicle scheme in 2023/24, which has continued to expand across the business in 2024/25. Our York office added solar panels early in 2024/25, which continues to support carbon reduction and increases energy security. Self-generated energy is also being assessed for our other owned offices. \n   \n Strong inclusive culture \n   \n Employee support and wellbeing continue to be key focus areas for the Group, with our hybrid working policy supporting a healthier work-life balance. We continue to measure the impact of our wellbeing initiatives through the annual employee net promoter score (eNPS) survey. Understanding diversity within our business has also been a focus across the Group, with the roll-out of voluntary self-reporting for gender, ethnicity, disability and neurodiversity. A more detailed understanding of the demographics of our business will help to attract and retain talent and support innovation through diversity of thought. \n   \n Our strong culture remains a driving force behind our successful growth. We continue to support this through staff events and incentive trips and by developing our people with continued learning and training opportunities. There has been an expansion of our apprenticeship scheme into more areas of the business and into degree-level apprenticeship programmes. We engage with staff through various channels and several improvements have been made based on their ideas and initiatives. During 2024/25, we continued to support our communities through donations, fundraising events and volunteer days, such as with the Wildlife Aid Foundation, the Rainbow Trust and St Leonard's Hospice. \n   \n Board composition and committee memberships \n   \n On 25 March 2024, Erika Schraner was appointed as senior independent director and Interim Chair of the Audit Committee, following the resignation of Mike Phillips as an independent non-executive director. At the same time, Shruthi Chindalur assumed the role of designated non-executive director for employee engagement. Sam Mudd was appointed as Interim CEO on 21 February 2024 and as CEO on 10 May 2024. \n   \n On 1 June 2024, two additional Board appointments were made, and the ESG Committee was established. Ross Paterson was appointed as an independent non-executive director, Chair of the Audit Committee and a member of the Nomination, the Remuneration and the ESG Committees. Anna Vikström Persson was appointed as an independent non-executive director, Chair of the ESG Committee and a member of the Audit, the Nomination and the Remuneration Committees. \n \n   \n \n \n \n Chief Financial Officer's review \n \n \n \n \n \n \n \n Year ended 28 February 2025 \n   \n \n \n Year ended 29 February 2024 \n   \n \n \n Change \n   \n \n \n \n \n Income statement \n \n \n £'m \n   \n \n \n £'m \n   \n \n \n % \n   \n \n \n \n \n Gross invoiced income (GII) \n \n \n 2,099.8 \n \n \n 1,823.0 \n \n \n 15.2 \n \n \n \n \n GII split by product: \n \n \n \n \n \n \n \n \n \n \n \n \n \n   Software \n \n \n 2,005.3 \n \n \n 1,722.0 \n \n \n 16.5 \n \n \n \n \n   Hardware \n \n \n 33.2 \n \n \n 41.4 \n \n \n (19.8) \n \n \n \n \n   Services internal 1 \n \n \n 34.0 \n \n \n 31.5 \n \n \n 7.9 \n \n \n \n \n   Services external 2 \n \n \n 27.3 \n \n \n 28.1 \n \n \n (2.8) \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Netting adjustment \n \n \n (1,882.7) \n \n \n (1,616.0) \n \n \n 16.5 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Revenue \n \n \n 217.1 \n \n \n 207.0 \n \n \n 4.9 \n \n \n \n \n Revenue split by product: \n \n \n \n \n \n \n \n \n \n \n \n \n \n   Software \n \n \n 146.0 \n \n \n 130.4 \n \n \n 12.0 \n \n \n \n \n   Hardware \n \n \n 33.2 \n \n \n 41.4 \n \n \n (19.8) \n \n \n \n \n   Services internal 1 \n \n \n 34.0 \n \n \n 31.5 \n \n \n 7.9 \n \n \n \n \n   Services external 2 \n \n \n 3.9 \n \n \n 3.7 \n \n \n 5.4 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Gross profit (GP) \n \n \n 163.3 \n \n \n 145.8 \n \n \n 12.0 \n \n \n \n \n   GP/GII% \n \n \n 7.8% \n \n \n 8.0% \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Administrative expenses \n \n \n 96.9 \n \n \n 89.1 \n \n \n 8.8 \n \n \n \n \n Administrative expenses split: \n \n \n \n \n \n \n \n \n \n \n \n \n \n   Employee costs \n \n \n 78.1 \n \n \n 71.2 \n \n \n 9.7 \n \n \n \n \n   Other administrative expenses \n \n \n 18.8 \n \n \n 17.9 \n \n \n 5.0 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Operating profit \n \n \n 66.4 \n \n \n 56.7 \n \n \n 17.1 \n \n \n \n \n \n \n \n \n Operating profit/GP% \n \n \n \n \n \n \n \n \n \n \n   \n Add back: \n \n \n     40.7% \n   \n   \n \n \n  38.9% \n   \n   \n \n \n   \n \n \n \n \n   Share-based payments \n \n \n 5.1 \n \n \n 5.7 \n \n \n (10.5) \n \n \n \n \n   Amortisation of acquired intangible assets \n \n \n 0.9 \n \n \n 0.9 \n \n \n - \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Adjusted operating profit (AOP) \n \n \n 72.4 \n \n \n 63.3 \n \n \n 14.4 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n Interest income \n Finance costs \n Share of profit of associate 3 \n \n \n 8.5 \n (0.3) \n - \n \n \n 5.1 \n (0.4) \n 0.2 \n \n \n 66.7 \n (25.0) \n (100.0) \n \n \n \n \n Profit before tax \n \n \n 74.6 \n \n \n 61.6 \n \n \n 21.1 \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Income tax expense \n \n \n (19.8) \n \n \n (14.7) \n \n \n 34.7 \n \n \n \n \n Effective tax rate \n \n \n 26.5% \n \n \n 23.9% \n \n \n \n \n \n \n \n Profit after tax \n \n \n 54.8 \n \n \n 46.9 \n \n \n 16.8 \n \n \n \n \n \n \n \n \n \n \n \n   \n 1 Provision of services to customers using the Group's own internal resources. \n 2 Provision of services to customers using third-party contractors. \n 3 Cloud Bridge Technologies, 25.1% share of profit of associate. \n   \n   \n Gro ss invoiced income \n   \n GII reflects gross income billed to our customers, with some small adjustments for deferred and accrued items - mainly relating to managed service contracts where the income is recognised over time - and has a direct influence on our movements in working capital. However, it does not capture all the IT spend we help our customers with because, in some cases, our vendor partners invoice the customer directly and pay us a fee which is a percentage of their sales value, and which we recognise within our GII, revenue and GP. \n   \n GII has increased by 15.2% year on year, exceeding £2bn for the first time to reach £2,099.8m (2023/24: £1,823.0m), driven by software and with continued strong growth in public sector which contributed 65% of total GII (2023/24: 62%). While growth has reduced compared to 2023/24 (26.7%), the prior year was boosted by some exceptionally large public sector contract wins. These are now in their second year and have become established in our annuity income, with the agreements running over three to five years. \n   \n Revenue \n   \n Revenue is reported in accordance with IFRS 15 with hardware and internal services reported gross (principal) and software and external services reported net (agent), which means revenue reflects changes in the mix of business but is often not a good indicator of underlying growth. \n   \n This reporting of revenue as a mix of GP and GII across the four income streams has given rise to a 4.9% increase, because the growth in software GP (reported net) i s outweighed by the reduction in the hardware GII (reported gross). So, given revenue is a mix of metrics, we focus on GP to provide a consistent measure of our sales and profit performance. \n   \n Gross profit \n   \n GP, our primary measure of sales performance, has grown by £17.5m, up 12.0% year on year to £163.3m (2023/24: £145.8m), with the second six months showing strongly at more than 15% growth (compared to 9% in the first half). \n   \n Breaking this down by income stream, the Group's two most strategic focus areas, software and internal services, have both achieved double-digit growth. Software GP is up by 12.0% to £146.1m (2023/24: £130.4m), and with only a very small decline in GP/GII%. This achievement includes the effects of the first two months of Microsoft incentive changes, where we have implemented mitigation plans to help offset the impact. \n   \n Internal services GP is up by 27.9% to £8.7m (2023/24: £6.8m), as we continue to invest significantly in our delivery staff to drive our security, cloud and AI solutions. We have been supported in these areas by increasing levels of Microsoft funding, for both internal investments and customer engagements. \n   \n Hardware GP declined by 6.1% to £4.6m (2023/24: £4.9m), with strong growth in the second half offsetting a large decline in the first six months. \n   \n We have seen good performances from both public and corporate sectors, each contributing around half of the £17.5m growth in GP in absolute terms. Public sector growth has been achieved while bidding under highly competitive tenders, either for single contracts or for several contracts in aggregate, the latter enabling us to gain multiple new clients from a single bid. Despite more pressure on margins under this process, public sector GP has grown by 18.2%. Our corporate GP has grown by 8.9%, increasing by 14.8% in our second half after seeing lower growth in the first half, in part driven by the weaker hardware performance during that period. \n   \n The growth in the public sector again demonstrates the Group's strategy of winning new customers and then expanding share of wallet. Our objective is to ensure we build our profitability within each contract over its term - typically three to five years - by adding additional higher-margin products into the original agreement as the customers' requirements grow and become more advanced. Adding AI products such as Copilot will become part of these contract expansions going forward. This process is also enhanced by focusing on selling our wide range of solutions offerings and higher-margin security products, while maximising our vendor incentives by achieving technical certifications. We track these customers individually to ensure that the strategy delivers value for the business, and for our stakeholders, over the duration of the contracts. \n As in previous years, the higher margins available in the corporate sector means that our overall GP mix for the year continues to stand at 65% in corporate and 35% in the public sector. Despite public sector competition, our margin (GP/GII) has stood up well, dropping only slightly from 8.0% in 2023/24 to 7.8% this year - and, behind this figure, the corporate margin has improved year on year. \n   \n Our long-standing relationships with our customers and high levels of repeat business were again demonstrated in 2024/25, with 97% of our GP coming from customers that we also traded with last year (2023/24: 97%), at a renewal rate of 109% - which measures the GP from existing customers this period compared to total GP in the prior period. Included within our GP increase of £17.5m was £4.3m from new customers. Aligned to this, we saw a 1.5% increase in customer numbers (defined as those generating more than £100 of GP) from 5,828 to 5,913, while the average GP per customer increased from £25,000 in 2023/24 to £27,600 in 2024/25. [1] \n   \n Administrative expenses \n   \n This includes employee costs and other administrative expenses as set out below. \n   \n Employee costs \n   \n Our success in growing the business continues to be as a direct result of the investments we have made over the years in our frontline sales teams, vendor and technology specialists, service delivery staff and technical support personnel, backed up by our marketing, operations and finance teams. It has been, and will remain, a carefully managed aspect of our business. \n   \n In addition to continuing to hire in line with growth and to ensure we have the expertise required to provide our clients with the best service, our commitment to develop, promote and expand from within the existing employee base, giving our people careers rather than just employment, is at the heart of our progress as a business. This has contributed to long tenure from our employees, which in turn supports the lasting relationships we have established with our customers, vendors and partners. \n   \n During the year we have seen total staff numbers rise to 1,245 on our February 2025 payroll, up by 18% from the year-end position of 1,057 on 29 February 2024. \n   \n Employee costs included in administrative expenses rose by 9.7% to £78.1m (2023/24: £71.2m). However, this figure has been affected by: \n   \n -    A reduction in share-based payment charges of £0.6m given our first three share option schemes issued post-IPO have now vested and given the cost of the new schemes launched in 2023/24 and 2024/25 have been slightly lower \n -    Capitalising £1.4m of staff costs on to the balance sheet. This relates to the salaries of employees who are developing new IT platforms - one to provide a 'marketplace' gateway for our customers to more seamlessly purchase products online from a range of vendors, and the other to enable us to improve our operational processes around customer order processing. This treatment is in line with our accounting policy for intangible assets. \n   \n Without the impact of these two items, the underlying increase in our employee costs is 13.7%. \n   \n Other administrative expenses \n   \n Other administrative expenses increased by 5.0% to £18.8m (2023/24: £17.9m), including continued investment in staff welfare and internal systems. \n   \n Operating profit \n   \n Our operating profit increased by 17.1% from £56.7m to £66.4m, which shows the balance we have achieved between growing GP in a challenging market while effectively managing our cost base. \n   \n Some of this increase has been positively affected by the £1.4m capitalisation of software developers' staff costs (expensed in the prior year when their work was focused on maintaining legacy systems) and the £0.6m lower share-based payment charge noted above. After adjusting for these, the increase remains strong at 13.4%. \n Our operating efficiency ratio, which measures operating profit as a percentage of GP, is a key performance indicator in understanding the Group's operational effectiveness in running day-to-day operations. We aim to sustain it at around 38-40%. The ratio increased to 40.7% (2023/24: 38.9%) but would have been 39.8% excluding the capitalised staff costs. \n   \n In previous results announcements we have also focused on adjusted operating profit (AOP) which removes the effects of share-based payment (SBP) charges and amortisation of acquired intangibles - notably because of the growth of these SBP charges over the time since IPO from a near-zero starting position in 2020/21 of £0.3m to £5.1m this year. Given that we have now moved out of that growth cycle, as older schemes vest and new schemes are introduced, the current charges are now viewed to be normalised as business-as-usual recurring expenses. Similarly, our amortisation charges are stable at £0.9m for the current and prior year. So, AOP is no longer considered to add value to understanding our results. We will therefore now focus on operating profit, which brings us in line with other similar businesses in our market segment. \n   \n For reference, our AOP has increased by 14.4% to £72.4m (2023/24: £63.3m), and the ratio of AOP to GP increased from 43.4% to 44.3%. \n   \n Interest income and finance costs \n   \n This year has seen significant interest being earned from money-market deposits, totalling £8.5m (2023/24: £5.1m). While last year included only ten months of earnings, we have nevertheless substantially increased this income stream - backed up by our strong cash management, which has enabled us to place more cash on deposit and for longer periods.   \n   \n Our interest income benefits from often having materially higher cash balances than reported at period ends around our largest months of trading in March and April (around the UK Government's fiscal year end) and June and December (around some key vendors' fiscal year ends). \n   \n Our finance costs primarily comprise arrangement and commitment fees associated to our revolving credit facility (RCF), noting that to date the Group has not drawn down any amount. This balance also includes a small amount of finance lease interest on our right-of-use assets, including from our staff electric vehicle (EV) scheme. \n   \n Share of profit in associate \n   \n Following the acquisition of a 25.1% interest in Cloud Bridge Technologies in April 2023, in accordance with IAS 28 Investments in Associates and Joint Ventures we account for the Group's share of its profits. For 2024/25 we have not recognised any profit as Cloud Bridge's set up costs of investing in overseas operations have offset its UK profits (2023/24: £0.2m). \n   \n Profit before tax \n   \n The combined impact of increased operating profits and high levels of interest received has seen our profit before tax increase by 21.1% to £74.6m (2023/24: £61.6m). \n   \n Income tax expense \n   \n The £5.1m (34.7%) rise in our income tax expense to £19.8m (2023/24: £14.7m) reflects the growth in profit before tax and, in part, that last year there was one month included at the previous UK corporate tax rate of 19% (2024/25 fully at 25%) - giving rise to an effective rate of tax of 23.9% in 2023/24. The higher effective rate in 2024/25 of 26.5% is also because of timing difference movements between current and deferred tax, with the latter seeing a reduction in our closing deferred tax asset. We therefore expect our long term effective tax rate to align to the UK corporate tax rate as the differences between accounting profit and taxable profit are substantially timing in nature. \n   \n Profit after tax \n   \n Profit after tax increased by 16.8% to £54.8m (2023/24: £46.9m), underlining our growth in operating profit and interest income, offset by the higher effective rate of tax. \n \n Earnings per share \n   \n As a result of this strong growth in profits attributable to owners of the company, our earnings per share have risen accordingly. Basic earnings per share are up 16.5% from 19.55 pence to 22.78 pence. \n   \n Balance sheet and cash flow \n \n \n \n \n   \n \n \n 28 February \n \n \n 29 February \n \n \n \n \n   \n \n \n 2025 \n \n \n 2024 \n \n \n \n \n Balance sheet \n \n \n £'m \n \n \n £'m \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Investment in associate \n Property, plant and equipment \n \n \n 3.2 \n 13.6 \n \n \n 3.2 \n 8.5 \n \n \n \n \n Intangible assets \n \n \n 43.5 \n \n \n 40.6 \n \n \n \n \n Other non-current assets \n \n \n 3.4 \n \n \n 4.9 \n \n \n \n \n Non-current assets \n \n \n 63.7 \n \n \n 57.2 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Trade and other receivables \n \n \n 268.4 \n \n \n 221.8 \n \n \n \n \n Cash \n \n \n 113.1 \n \n \n 88.8 \n \n \n \n \n Contract assets \n \n \n 10.0 \n \n \n 11.8 \n \n \n \n \n Current assets \n \n \n 391.5 \n \n \n 322.4 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Trade and other payables \n \n \n 327.5 \n \n \n 277.9 \n \n \n \n \n Lease liabilities \n \n \n 0.7 \n \n \n 0.4 \n \n \n \n \n Contract and tax liabilities \n \n \n 25.7 \n \n \n 19.6 \n \n \n \n \n Current liabilities \n \n \n 353.9 \n \n \n 297.9 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Lease liabilities \n \n \n 1.3 \n \n \n 1.3 \n \n \n \n \n Other non-current liabilities \n \n \n 2.0 \n \n \n 2.1 \n \n \n \n \n Non-current liabilities \n \n \n 3.3 \n \n \n 3.4 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Net assets \n \n \n 98.0 \n \n \n 78.3 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Share capital \n \n \n 2.4 \n \n \n 2.4 \n \n \n \n \n Share premium \n \n \n 636.4 \n \n \n 633.7 \n \n \n \n \n Share-based payment reserve \n \n \n 14.9 \n \n \n 11.0 \n \n \n \n \n Merger reserve \n \n \n (644.4) \n \n \n (644.4) \n \n \n \n \n Retained earnings \n \n \n 88.7 \n \n \n 75.6 \n \n \n \n \n Total equity \n \n \n 98.0 \n \n \n 78.3 \n \n \n \n \n   \n Closing net assets stood at £98.0m (29 February 2024: £78.3m), including the Group's £3.2m interest (25.1%) in Cloud Bridge Technologies - which includes our £0.2m share of profits since we acquired it in April 2023. \n   \n The increase in the value of property, plant and equipment is primarily attributable to the £5.1m purchase of 27,000 square feet of office property immediately adjacent to the existing Group and Bytes Software Services offices in Leatherhead. This space has the potential to accommodate around 300 employees and will provide for current and future capacity requirements for business growth in the coming years. \n   \n Intangible assets include the £3.7m addition of capitalised software development costs, a combination of internal staff costs of £1.4m and £2.3m of external contractor costs. As this work continues through the new financial year, we expect around a further £3m of costs to be capitalised in completing this work. While we are in the development phase, there is no amortisation of the asset - this will start once we move to live production mode, scheduled for the latter part of 2025/26. \n   \n Net current assets closed at £37.6m (29 February 2024: £24.5m). \n   \n Our debtor days at the end of the year stood at 32, and our average debtor days for the year was 38 (2023/24: 37). Our closing loss allowance provision reduced to £1.7m, down from £2.5m at the February 2024 year end, with £0.7m bad debts written off against the provision and another £0.1m reduction to reflect our current expected loss calculated under IFRS 9. We believe this remains a prudent position, given that the level of write-offs is very low considering our GII of £2.1bn. \n The Group has paid its suppliers on schedule throughout the year, with its average creditor days remaining broadly in line with prior year at 46 (2023/24: 47) and standing at 36 at the end of the year (2023/2024: 44). \n   \n The consolidated cash flow is set out below: \n \n \n \n \n \n \n \n Year ended 28 February 2025 \n \n \n Year ended 29 February 2024 \n \n \n \n \n Cash flow \n \n \n £'m \n \n \n £'m \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Cash generated from operations \n Payments for fixed assets \n \n \n 85.6 \n (6.4) \n \n \n 67.3 \n (1.3) \n \n \n \n \n Payments for intangible assets \n \n \n (3.7) \n \n \n - \n \n \n \n \n Free cash flow \n \n \n 75.5 \n \n \n 66.0 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Net interest received \n \n \n 8.3 \n \n \n 4.7 \n \n \n \n \n Taxes paid \n \n \n (18.9) \n \n \n (15.1) \n \n \n \n \n Lease payments \n \n \n (0.6) \n \n \n (0.2) \n \n \n \n \n Dividends \n \n \n (42.8) \n \n \n (36.6) \n \n \n \n \n Issue of share capital \n \n \n 2.8 \n \n \n - \n \n \n \n \n Investment in associate \n \n \n - \n \n \n (3.0) \n \n \n \n \n Net increase in cash \n \n \n 24.3 \n \n \n 15.8 \n \n \n \n \n Cash at the beginning of the period \n \n \n 88.8 \n \n \n 73.0 \n \n \n \n \n Cash at the end of the period \n \n \n 113.1 \n \n \n 88.8 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n Operating profit \n   \n \n \n 66.4 \n \n \n 56.7 \n \n \n \n \n Cash conversion (against operating profit) \n   \n \n \n 113.8% \n \n \n 116.4% \n \n \n \n \n Cash conversion (against AOP) \n \n \n 104.3% \n \n \n 104.3% \n \n \n \n \n   \n Cash at the end of the period was £113.1m (29 February 2024: £88.8m), which is after the payment of dividends totalling £42.8m during the period - being the final and special dividends for 2023/24 and the interim dividend for 2024/25. \n   \n Cash flow from operations after payments for fixed and intangible assets (free cash flow) generated a positive cash flow of £75.5m (2023/24: £66.0m), noting that the current year figure is after the purchase of the new properties and the capitalisation of software development costs - a combined outflow of £8.8m. \n T he Group's cash conversion ratio for the year has historically been measured as free cash flow divided by AOP but, in line with the other profit and efficiency measures referred to above, we are now measuring free cash flow against operating profit, which was 113.8% for the year (2023/24: 116.4%). For reference, the cash conversion against AOP of 104.3% is in line with last year. We target our long-term sustainable cash conversion at 100%. \n The £2.8m cash received from the issue of share capital relates to participating staff exercising 711,000 share options, primarily under our 2021 CSOP and SAYE (Share Save) plans, which vested in June 2024 and August 2024, respectively. There is a corresponding increase in the share premium value in the balance sheet above. \n If required, the Group has access to a committed RCF of £30m with HSBC. The facility commenced on 17 May 2023, replacing the Group's previous facility for the same amount, and runs for three years, until 17 May 2026, with an optional one-year extension to 17 May 2027. To date, the Group has not used the facility. \n   \n Proposed dividends \n   \n As stated above, the Group's dividend policy is to distribute between 40% and 50% of post-tax pre-exceptional earnings to shareholders. Accordingly, the Board is pleased to propose a gross final dividend of 6.9 pence per share. The aggregate amount of the proposed dividend expected to be paid out of retained earnings at 28 February 2025, but not recognised as a liability at the end of the financial year, equates to £16.6m. Our capital allocation policy is that excess cash following organic investment and any M&A is returned to shareholders. We consider both special dividends and share buybacks as methods to return excess capital, preferring share buybacks when our shares are materially undervalued. In light of the company's continued strong performance and cash generation, the Board also considers it appropriate to propose a cash return to ordinary shareholders with a special dividend of 10.0 pence per share, equating to £24.1m. If approved by shareholders, the final and special dividend will be payable on 25 July 2025 to all ordinary shareholders who are registered as such at the close of business on the record date of 11 July 2025. \n   \n The salient dates applicable to the dividend are as follows: \n   \n \n \n \n \n Dividend announcement date \n \n \n Tuesday, 13 May 2025 \n \n \n \n \n AGM at which dividend resolutions will be proposed \n \n \n Wednesday, 2 July 2025 \n \n \n \n \n Currency conversion determined and announced together with the South African (SA) tax treatment by 1100 (SAST) \n \n \n Monday, 7 July 2025 \n \n \n \n \n Last day to trade cum dividend (SA register) \n \n \n Tuesday, 8 July 2025 \n \n \n \n \n Commence trading ex-dividend (SA register) \n \n \n Wednesday, 9 July 2025 \n \n \n \n \n Last day to trade cum dividend (UK register) \n \n \n Wednesday, 9 July 2025 \n \n \n \n \n Commence trading ex-dividend (UK register) \n \n \n Thursday, 10 July 2025 \n \n \n \n \n Record date \n \n \n Friday, 11 July 2025 \n \n \n \n \n Payment date \n \n \n Friday, 25 July 2025 \n \n \n \n \n   \n Additional information required by the Johannesburg Stock Exchange: \n   \n 1.    The GBP:ZAR currency conversion will be determined and published on SENS on 7 July 2025. \n 2.    A dividend withholding tax of 20% will be applicable to all shareholders on the South African register unless a shareholder qualifies for exemption not to pay such dividend withholding tax. \n 3.    The dividend payment will be made from a foreign source (UK). \n 4.   At 12 May 2025, being the declaration announcement date of the dividend, the company had a total of 241,142,169 shares in issue (with no treasury shares). \n 5.    No transfers of shareholdings to and from South Africa will be permitted between 7 July 2025 and 11 July 2025 (both dates inclusive). No dematerialisation or rematerialisation orders will be permitted between 9 July 2025 and 11 July 2025 (both dates inclusive). \n   \n Managing new and emerging risks \n   \n We assess current and emerging risks as part of our ongoing risk monitoring progress. While we remain vigilant, we take confidence from the resilience that our business has shown through various external crises in recent years. \n In our last Annual Report, we identified 14 principal risks that could have a significant impact on our operations. While the risks themselves are unchanged in 2024/25, with no additions, deletions or reclassifications, we have in some cases updated the status of the risk. We changed the status to 'increase' for the following four risks: \n ·     Working capital, in line with the heightened risk of economic disruption because of the expanded Middle East conflict \n ·      Direct and indirect cyberthreats, because of evolving and elevated global risk to IT security \n ·     Attract and retain staff while keeping our culture, because of the scarcity of suitable applicants and higher salary expectations \n ·      Changes to vendors' commercial model because of changes in certain vendor programmes in 2024/25. \n However, vendors have previously changed their commercial models, and we have a strong track record of successfully adjusting to these, aided by close and regular communication with all our major vendors and distributors. We remain confident in our ability to adapt to vendor changes and to maintain our profitability. \n For the risks of Vendor concentration and Supply chain management, we changed the status from 'increase' to 'no change', to reflect mitigation actions this year. \n We also identified three emerging risks in our previous Annual Report: the physical and transition risks from climate change, keeping pace with social change, and the impact of AI. These risks remain relevant in 2024/25, and we continue to monitor them. In the case of AI, we also see the fast-evolving technology as an opportunity for our business, internally and externally. \n Summary of changes since 2023/24 \n   \n \n \n \n \n   \n \n \n Risk name \n \n \n Changes we made \n \n \n \n \n 1. \n \n \n Economic disruption \n \n \n Noted UK budget changes to employer National Insurance, international political uncertainty and trade tariffs, and public sector budgets. \n \n \n \n \n 2. \n \n \n Margin pressure \n \n \n Made no changes. \n \n \n \n \n 3. \n \n \n Changes to vendors' commercial model \n \n \n At the half year, changed the status to ' increase ', in light of Microsoft changes. \n \n \n \n \n 4. \n \n \n Inflation \n \n \n Updated risk with latest figures. \n \n \n \n \n 5. \n \n \n Working capital \n \n \n At the half year, changed the status to ' increase '. Noted upcoming UK Government Procurement Act 2024. \n \n \n \n \n 6. \n \n \n Vendor concentration \n \n \n At the half year, changed the status to ' no change '. Noted impact from marketplaces. \n \n \n \n \n 7. \n \n \n Competition \n \n \n Noted impact from anti-competition regulations. \n \n \n \n \n 8. \n \n \n Relevance and emerging technology \n \n \n Made no changes. \n \n \n \n \n 9. \n \n \n Cyberthreats - direct and indirect \n \n \n At the half year, changed the status to ' increase ', adding extra mitigation measures. Also changed ownership to the chief technology officers (CTOs) of our subsidiary companies. \n \n \n \n \n 10. \n \n \n Business continuity failure \n \n \n At the half year, added extra mitigation measures. Changed ownership to the CTOs of our subsidiary companies. \n \n \n \n \n 11. \n \n \n Attract and retain staff while keeping our culture \n \n \n At the half year, changed the status to ' increase ', because of scarcity of suitable applicants and salary expectations. \n \n \n \n \n 12. \n \n \n Supply chain management \n \n \n At the half year, changed the status to ' no change ', adding extra mitigation measures. Also made small changes to operational measures. \n \n \n \n \n 13. \n \n \n Sustainability/ESG \n \n \n At the half year, changed the status to ' no change ', but later returned it to ' increase ' because of trickle-down effects of regulations and requirements. Also changed ownership to the Group Sustainability Manager. \n \n \n \n \n 14. \n \n \n Regulatory and compliance \n \n \n Made no changes. \n \n \n \n \n   \n Our principal risks and uncertainties \n   \n \n \n \n \n Financial \n \n \n 1 Economic disruption \n No change \n   \n \n \n Risk owner CEO \n \n \n \n \n The risk \n This risk includes the impact of UK tax changes, in particular raising National Insurance (NI) contributions from 13.8% to 15% and lowering the employer NI threshold from £9,000 to £5,600. \n   \n Internationally, there is political uncertainty with the new US administration. Imposing tariffs on China for trade into the US, resulting in reciprocal tariffs, and threatening tariffs on other countries, could lead to inflation. \n   \n In addition, the conflicts in the Middle East and Ukraine continue. \n   \n This risk also includes the uncertainties caused by global economic pressures and geopolitical risk within the UK. \n   \n There is the potential for public sector funding to be cut, although the size of this is still unknown. \n   \n   \n \n \n How we manage it \n We have so far continued to perform well during high inflation, the conflicts in the Middle East and Ukraine, and the UK leaving the EU. \n   \n The recent real-life experience of these, and of the rising cost of living and exchange rate fluctuations, have shown us to be resilient through tough economic conditions. The diversity of our client base has also helped us maintain and increase business in this period. We are not complacent, however - economic disruption remains a risk, and we keep our operations under constant review. \n   \n We cannot mitigate the NI increases directly, but indirectly we are aiming to increase productivity by using AI tools. Three quarters of our employees have a GenAI licence and, in a recent assessment of usage, the productivity increase was equivalent to 26 full-time-equivalent roles. \n   \n Our continued focus on software asset management means that we advise customers of the most cost-effective ways to fulfil their software needs. Changes to economic conditions mean many organisations will look to IT to drive growth and/or efficiency. \n   \n Externally, we have seen more customers looking to avoid increased staff costs by outsourcing their IT to managed services. This may create an opportunity to accelerate our service offerings. \n   \n We will keep a watching brief on the impacts to the public sector from any government cuts to funding or policy changes, and how these effect the business. \n   \n \n \n \n \n The impact \n Major economic disruption and potentially higher taxes could see reduced demand for software licensing, hardware and IT services, which could be compounded by government controls. Lower demand could also arise from reduced customer budgets, cautious spending patterns or clients 'making do' with existing IT. \n   \n Economic disruption could also affect the major financial markets, including currencies, interest rates, trade and the cost of borrowing. Economic deterioration like this could affect our business performance and profitability. Inflationary pressure could still create an environment in which customers redirect their spending from new IT projects to more pressing needs. \n   \n \n \n \n \n 2 Margin pressure \n No change \n   \n \n \n Risk owner MDs of subsidiary businesses \n \n \n \n \n The risk \n BTG faces pressure on profit margins from myriad directions, including increased competition, changes in vendors' commercial behaviour, certain offerings being commoditised and changes in customer mix or preferences. \n   \n \n \n How we manage it \n Profit margins are affected by many factors at customer and micro levels. \n   \n We can control some of the factors that influence our margins but some, such as economic and political factors, are beyond our control. \n   \n In the past year we have sought to maintain margins where possible. Our diverse portfolio of offerings, with a mix of vendors, software and services, has enabled us to absorb any changes - and we continue to innovate to find new ways to deliver more value for our customers. Services delivered internally are consistently measured against our competition to ensure we remain competitive and maximise margins. \n   \n Keeping the correct level of certification by vendor, early deal registration and rebate management are three methods we use to make sure we are procuring at the lowest cost and maximising the incentives we earn. \n   \n This risk area is reviewed monthly. \n   \n   \n \n \n \n \n The impact \n These changes could have an impact on our business performance and profitability. \n   \n \n \n \n \n 3 Changes to vendors' commercial model \n Increase focus \n   \n \n \n Risk owner CEO \n \n \n \n \n The risk \n We receive incentive income from our vendors and their distributors. This partially offsets our costs of sales but could be significantly reduced or eliminated if commercial models are changed significantly. \n   \n \n \n How we manage it \n We maintain a diverse portfolio of vendor products and services. Although we receive major sources of funding from specific vendor programmes, if one source declines, we can offset it by gaining new certifications in, and selling, other technologies where new funding is available. Microsoft forms a significant part of BTG's gross profit, and has consistently reviewed its incentive programmes to help it achieve its strategic objectives. BTG has consistently shown its ability to adapt in line with these changes. Although we see this risk increasing, we are confident in our ability to maintain growth over time). \n   \n We closely monitor incentive income and make sure staff are aligned to meet vendors' goals so that we don't lose these incentives. Close and regular communication with all our major vendors and distributors means we can manage this risk appropriately. In some areas we have seen a positive change in vendors' commercial terms, where we have been able to adapt practices. \n   \n \n \n \n \n The impact \n These incentives are very valuable and contribute to our operational profits. Significant changes to commercial models could put pressure on our profitability. \n   \n \n \n \n \n 4 Inflation \n Decrease focus \n \n \n Risk owner CFO \n \n \n \n \n The risk \n Inflation in the UK, as measured by the Consumer Price Index (CPI), was 3.2% in March 2024. At January 2025, this was 3.0%. This rate is above the Bank of England's target of 2%. \n   \n The effects of both NI changes and global trade tariffs are inflationary. \n   \n \n \n How we manage it \n Staffing costs make up most of our overheads, so we focus our attention on our employees and their ability to cope with the rising cost of living. Beyond salaries, we have also focused on providing attractive benefits packages to attract and retain talent. \n   \n While we cannot dictate our customers' budget, our business model is to build trusted relationships - where account managers understand our customers and are able to have pragmatic conversations about what their IT priorities should be in the current technology landscape. \n   \n \n \n \n \n The impact \n Wage inflation and increased fuel and energy costs have a direct impact on our underlying cost base. \n   \n If our competitors increase wages to a higher level, then we potentially risk retaining and attracting employees and customers. \n   \n Our customers will also have increased costs, which will change their budgets and spending priorities. \n   \n   \n \n \n \n \n 5 Working capital \n Increase focus \n \n \n Risk owner CFO \n \n \n \n \n The risk \n As customers face the challenges of the current economic environment, with inflation and elevated interest rates, there is a greater risk of an increasing aged debt profile, with customers slower to pay and the possibility of bad debts. \n   \n The implementation of the UK Government's Procurement Act (2023) will affect the payment terms of public sector customers and affect our supply chain. \n   \n Vendors' changing payment terms could also have a significant impact. \n   \n We have seen debtor days stabilise as inflation has reduced, but the number of days is yet to return to historically low levels. \n   \n \n \n How we manage it \n Our credit collections teams are focused on collecting customer debts on time and maintaining our debtor days at or below target levels. Debt collection is reported and analysed continually and escalated to senior management as required. \n   \n We have invested in larger credit collection teams and risk management. \n   \n In the past financial year, BTG has seen a higher level of write-offs than before, but these still aren't significant: all our write-offs are from companies that have become insolvent or gone into administration. \n   \n A large part of a successful outcome is maintaining strong, open relationships with our customers, understanding their issues and ensuring our billing systems deliver accurate, clear and timely invoicing so that queries can be quickly resolved. \n   \n \n \n \n \n The impact \n This could adversely affect our businesses' profitability and/or cash flow. \n   \n \n \n \n \n Strategic \n \n \n 6 Vendor concentration \n No change \n   \n \n \n Risk owner CEO \n \n \n \n \n The risk \n Over-reliance on any one technology or supplier could pose a potential risk, should that technology be superseded or exposed to economic down cycles, or if the vendor fails to innovate ahead of customer demands. \n   \n \n \n How we manage it \n We work with our vendors as partners - it is a relationship of mutual dependency because we are their route to the end customer. We maintain excellent relationships with all our vendors, and have a particularly good relationship with Microsoft, which relies on us as a key partner in the UK. Our growth plans, which involve developing business with all our vendors, will naturally reduce the risk of relying too heavily on any single one. \n   \n We have a diversified vendor list, as well as a focus on services and using in-house and third-party specialists, which diversifies and mitigates some of the vendor concentration risk. \n   \n \n \n \n \n The impact \n Relying too heavily on any one vendor could have an adverse effect on our financial performance, should that relationship break down. \n   \n Uptake of AI is expected to increase rapidly. While this represents an opportunity, AI development by a handful of companies, including Microsoft, has the potential to further concentrate revenue and profit across fewer vendors. \n   \n \n \n \n \n 7 Competition \n No change \n   \n \n \n Risk owner CEO \n \n \n \n \n The risk \n Competition in the UK IT market, or the commoditisation of IT products, may result in BTG being unable to win or maintain market share. \n   \n Mergers and acquisitions have consolidated our distribution network and absorbed specialist services companies. This has caused overlap with our own offerings. \n   \n A move to direct vendor resale to end customers (disintermediation) could place more pressure on the market opportunity. Platforms, like marketplaces, with direct sales to customers, could also be seen as disintermediation. \n   \n An increase in the use of marketplaces also heightens the risk of more transactions going through the same route. \n   \n Frameworks, particularly in the public sector, are a procurement route of choice for some customers. We risk narrowing our route to customers if we are not part of these frameworks. \n   \n AI risks becoming a partial competitor, if it becomes able to provide accurate and beneficial licensing and infrastructure advice direct to customers. \n   \n The regulatory environment will change the competitive landscape too, as regulators look to decrease monopolies. \n   \n \n \n How we manage it \n We closely watch commercial and technological developments in our markets. \n   \n The threat of disintermediation by vendors has always been present. We minimise this threat by continuing to increase the added value we bring to customers directly. This reduces clients' desire to deal directly with vendors. \n   \n Equally, vendors cannot engage with myriad organisations globally without the sort of well-established network of intermediaries that we have. \n   \n We currently work with the dominant marketplace providers and can sell from multiple vendors to our customers through their platforms. By matching customer requirements to the vendor's value proposition, we can better serve our customers' needs. \n   \n We continue to develop and improve our systems and processes to make transactions easier for our customers, including expanding and improving our own self-service portals. \n   \n AI/machine learning has been identified as a new emerging risk, so we will explore and monitor for risks and opportunities to our business. \n   \n Currently, there is no sign of any commoditisation that would be a serious threat to our business model in the short or medium term. \n   \n We are aware of the opportunities from regulatory changes and partnerships to expand our vendor, solution and services portfolio. \n \n \n \n \n The impact \n This risk could have a material, adverse impact on our business and profitability, potentially requiring a shift in business operations, including a strategic overhaul of the products, solutions and services that we offer to the market. \n   \n More consolidation could lead to less competition between vendors and cause prices to value-added resellers, like us, to rise and service levels to fall. Direct resale to customers could also increase. This could erode reseller margins, given the purchase cost is less for the distributor than the reseller. This could reduce our market, margin and profits. \n   \n \n \n \n \n 8 Relevance and emerging technology \n No change \n \n \n Risk owner CEO \n \n \n \n \n The risk \n As the technology and security markets evolve rapidly and become more complex, the risk exists that we might not keep pace and so fail to be considered for new opportunities by our customers. \n   \n \n \n How we manage it \n We stay relevant to our customers by: \n -      Continuing to offer them expert advice and innovative solutions \n -      Specialising in high-demand areas \n -      Holding superior levels of certification \n -      Maintaining our good reputation and helping clients find the right solutions in a complex, often confusing IT marketplace. \n   \n We defend our position by keeping abreast of new technologies and the innovators who develop them. We do this, for example, by running a cyber accelerator programme for new and emerging solutions providers, joining industry forums and sitting on new technology committees. We have expanded the number and range of our subject-matter experts, who stay ahead of developments in their areas and communicate this internally and externally. \n   \n We are giving more focus to customer communications and marketing, to increase brand awareness. \n   \n By identifying and developing bonds with emerging companies, we maintain good relationships with them as they grow and give our customers access to their technologies. This is core to our business, so the risk is relatively low. \n   \n   \n   \n \n \n \n \n The impact \n Customers have wide choice and endless opportunities to research options. If we do not offer cutting-edge products and relevant services, we could lose sales and customers, which would affect our profitability. \n   \n \n \n \n \n Processes and systems \n \n \n 9 Cyberthreats - direct and indirect \n Increase focus \n   \n \n \n Risk owner CTOs of subsidiary businesses \n \n \n \n \n The risk \n Breaches in the security of electronic and other confidential information that BTG collects, processes, stores and transmits may give rise to significant liabilities and reputational damage. \n   \n \n \n How we manage it \n We use intelligence-driven analysis, including research by our internal digital forensics team and analysis generated by threat intelligence systems to protect ourselves. \n   \n This work provides insights into vulnerable areas and the effects of any breaches, which allow us to strengthen our security controls. \n   \n Internal IT policies and processes are in place to mitigate some of these risks, including regular training, working abroad procedures and the use of enterprise-level security software. \n   \n We have established controls that separate customer systems and mitigate cross-breaches. Our cyberthreat-level system also lets us tailor our approach and controls in line with any intelligence we receive. Our two subsidiaries share insights and examples of good practice on security controls with one another. Both businesses use a security operations centre and have internal specialists to provide up-to-date threat analysis. \n   \n We maintain ISO 27001, CE and CE+ certifications to protect our and our customers' data. \n   \n   \n \n \n \n \n The impact \n If a hacker accessed our IT systems, they might infiltrate one or more of our customer areas. This could provide indirect access, or the intelligence required to compromise or access a customer environment. \n   \n This would increase the chance of first- and third-party risk liability, with the possible effects of regulatory breaches, loss of confidence in our business, reputational damage and potential financial penalties. \n \n \n \n \n Operational \n \n \n 10 Business continuity failure \n No change \n   \n \n \n Risk owner CTOs of subsidiary businesses \n \n \n \n \n The risk \n Any failure or disruption of BTG's people, processes and IT infrastructure may negatively affect our ability to deliver to our customers, cause us reputational damage and lose us market share. \n   \n \n \n How we manage it \n Our CTOs and heads of IT manage and oversee our IT infrastructure, network, systems and business applications. All our operational teams are focused on the latest vendor products and educate sales teams appropriately. \n   \n Regular IT audits have identified areas for improvement, while ongoing reviews make sure we have a high level of compliance and uptime. This means our systems are highly effective and fit for purpose. \n   \n For business continuity, we use different sites and solutions to limit the impact of service outage to customers. Where possible, we use active resilience solutions - designed to withstand or prevent loss of services in an unplanned event - rather than just disaster-recovery solutions and facilities, which restore normal operations after an incident. \n   \n Employees are encouraged to work from home or take time off when sick, to avoid transmitting illness within the workplace. We also have processes to make sure there isn't a single point of failure, and that resiliency is built into employees' skillsets. \n   \n The risk is also mitigated through policies and process implementation, such as Phoenix achieving ISO 22301 certification and Bytes implementing an incident management policy. \n   \n Our efforts to reduce the risk from insider threats are multifaceted and involve pre-employment screening, contracts, training, identifying higher-risk individuals and technology to reduce potential data loss. This risk is reviewed through frequent risk assessments and BCP testing. \n   \n \n \n \n \n The impact \n Systems and IT infrastructure are key to our operational effectiveness. Failures or significant downtime could hinder our ability to serve customers, sell solutions or invoice. \n   \n Major outages in systems that provide customer services could limit clients' ability to extract crucial information from their systems or manage their software. \n   \n Increased automation means a heavier reliance on technology. Although it can reduce human error, it can also potentially increase our reliance on other vendors. \n   \n People are a huge part of our operational success, and processes rely on people as much as technology to deliver effectively to our customers. Insider threats, intentional or otherwise, could compromise our ability to deliver and damage our reputation. Employee illness and absence - if in significant numbers, such as a communicable disease in a particular team - could make effective delivery difficult. \n   \n \n \n \n \n 11 Attract and retain staff while keeping our culture \n Increase focus \n   \n \n \n Risk owner CEO \n   \n \n \n \n \n The risk \n The success of BTG's business and growth strategy depends on our ability to attract, recruit and retain a talented employee base. Being able to offer competitive remuneration is an important part of this. \n   \n Several factors are affecting this: \n -      Salary and benefit expectations \n -      BTG's high rate of growth \n -      Skills shortage in emerging, high-demand areas, such as AI and machine learning \n -      With remote or hybrid working becoming the norm, potential employees in traditionally lower-paid geographical regions being able to work remotely in higher-paying areas like London. \n   \n \n \n How we manage it \n We continually strive to be the best company to work for in our sector. \n   \n One of the ways we manage this risk is by growing our own talent pools. We've used this approach successfully in our graduate intakes for sales, for example. BTG also runs an extensive apprenticeship programme across multiple business divisions. We also review the time that management has to coach new staff. \n   \n We've also organically grown and set up new geographical offices, to attract local talent. \n   \n Maintaining our culture is important to retaining current staff. BTG regularly engages with employees through surveys, such as the eNPS and Great Places to Work. Feedback from these and elsewhere is used to review and develop our employee benefits. We maintain our small-company feel through regular communications, clubs, and charity and social events. We aim to absorb growth while keeping our culture. \n \n \n \n \n The impact \n The double impact of scarcity of appropriate candidates for new roles and salary expectations will challenge our ability to attract and retain the talent pool we need to deliver our planned growth. \n   \n We may also lose talented employees to competitors. \n   \n \n \n \n \n   \n \n \n 12 Supply chain management \n No change \n   \n \n \n Risk owner CEO \n \n \n \n \n The risk \n Failure to understand suppliers may lead to regulatory, reputational and financial risks, if they expose our business to practices that we would not tolerate in our own operations. The time and effort to monitor and audit suppliers is considered a risk. \n   \n There is a risk to our business if we engage with suppliers that: \n -      Provide unethical working conditions and pay \n -      Are involved in financial mismanagement and unethical behaviour \n -      Cause environmental damage \n -      Operate in sanctioned regions. \n   \n \n \n How we manage it \n Supplier set-up forms include questions to ask suppliers to disclose information relating to compliance and adherence to our Supplier Code of Conduct. Any unethical, illegal or corrupt behaviour that comes to light is escalated and appropriate action is taken. Onboarding questionnaires have been reviewed and improved. \n   \n Phoenix has appointed a supply chain manager, and Bytes has appointed a third-party compliance officer focused on supply chain management. Bytes has also established a cross-disciplinary group to work on managing suppliers. \n   \n \n \n \n \n The impact \n The impact to the business is across multiple streams, from legal, financial and reputational to ethical and environmental. \n   \n Escalating conflicts could also affect our supply chain. \n   \n \n \n \n \n Regulatory \n \n \n 13 Sustainability/ESG \n No change \n   \n \n \n Risk owner Group Sustainability Manager \n \n \n   \n \n \n \n \n The risk \n The growing importance of sustainability and ESG for our customers, investors and employees means we need to stay at the forefront of reporting and disclosure, especially given that requirements and standards are continually updated. \n   \n \n \n How we manage it \n Our Board manages and monitors this risk closely, with oversight from the ESG and Audit Committees. \n   \n The Group Sustainability Manager continues to drive sustainability reporting and initiatives, and to work with an appointed third party to provide guidance and assurance on reported data. Environmental management systems are also in place and certified by ISO 14001. \n   \n Our Sustainability Steering Committee enables decision makers from across the Group and our two operating companies to work towards a common goal and report on challenges. In June 2024, we enhanced the governance of ESG, by creating a Board-level ESG Committee. \n   \n Disclosures are made through several channels, including ISS ESG ratings, CDP and EcoVadis. We had our near-term and net zero targets validated by the SBTi in June 2024, as part of our programme to drive sustainability through best practice approaches. Feedback from disclosures is used to guide changes in the business. So, as disclosure methodologies stay current, so should the business, where possible and relevant. \n   \n \n \n   \n \n \n \n \n The impact \n Falling behind expectations or our peers may lead to challenges around: \n -      Legal compliance, such as adhering to global standards \n -      Retaining customers, as they push to reduce emissions \n -      Investor relations, such as meeting criteria for ESG funds \n -      Attracting and retaining employees, as younger generations seek to work for more purpose-driven businesses. \n \n \n   \n \n \n \n \n   \n \n \n 14 Regulatory and compliance \n No change \n   \n \n \n Risk owner CEO \n \n \n   \n \n \n \n \n The risk \n Our business faces inherent risks from evolving regulatory and compliance landscapes. Changes in laws, regulations and industry standards could significantly affect our operations, financial stability and reputation. \n   \n \n \n How we manage it \n We engage external experts. BTG works closely with external authorities, including through internal and external audits and paid-for consultancy, to advise on expected changes to regulations and the Group's response to them. \n   \n We monitor regulatory developments. Individuals with responsibilities in the business stay up to date with changes in their field through professional memberships and trade publications, and through directly following regulatory and compliance bodies. \n   \n We work to enhance internal controls. Compliance teams in each operating company hold a register of policies and organise reviews, updates and sign-offs with policy owners to make sure policies are kept current. \n   \n Our steering committees, operating company board meetings and BTG Board meetings are forums for raising and discussing changes that affect multiple areas of the business. \n   \n \n \n   \n \n \n \n \n The impact \n Operational teams and processes face administrative burdens and effects under rapidly changing regulations. \n   \n Failing to keep up with regulatory, reporting and compliance changes could lead to fines, legal challenges and reputational damage. \n   \n If regulatory compliance is not maintained, there are risks to the Group and to individuals, which could lead to expensive legal challenges and reputational damage to the business among all stakeholders. \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n   \n Going concern disclosure \n   \n The Group has performed a full going concern assessment from 28 February 2025 for the period up to 31 August 2026. As outlined in the Chief Financial Officer's review above, trading during the year demonstrated the Group's strong performance in the period and our resilient operating model. The Group has a healthy liquidity position with £113.1m of cash and cash equivalents available at 28 February 2025. The Group also has access to a committed RCF that covers the going concern period to 31 August 2026 and that remains undrawn. The directors have reviewed trading and liquidity forecasts for the Group, as well as continuing to monitor the effects of macroeconomic, geopolitical and climate-related risks on the business. The directors have also considered a number of key dependencies, which are set out in the Group's principal risks report, and including BTG's exposure to inflation pressures, credit risk, liquidity risk, currency risk and foreign exchange risk. The Group continues to model its base case, severe-but-plausible and stressed scenarios, including mitigations, consistently with those disclosed in the annual financial statements for the year ended 29 February 2024, and with the key assumptions summarised within the financial statements below. Under all scenarios assessed, the Group would remain cash positive throughout the whole of the going concern period without needing to use the RCF. \n   \n Going concern conclusion \n   \n Based on the analysis described above, the Group has sufficient liquidity headroom through the forecast period. The directors therefore have reasonable expectation that the Group has the financial resources to enable it to continue in operational existence for the period up to 31 August 2026. Accordingly, the directors conclude it to be appropriate that the consolidated financial statements be prepared on a going concern basis. \n   \n Responsibility statement pursuant to the Financial Conduct Authority's Disclosure and Transparency Rule 4 (DTR 4) \n   \n Each director of the company confirms that (solely for the purpose of DTR 4) to the best of their knowledge that: \n   \n ·    The financial information in this document, prepared in accordance with the applicable UK law and applicable accounting standards, gives a true and fair view of the assets, liabilities, financial position and result of the Group taken as a whole \n ·    The Chief Executive Officer's and Chief Financial Officer's reviews include a fair review of the development and performance of the business and the position of the Group taken as a whole, together with a description of the principal risks and uncertainties that they face. \n   \n On behalf of the Board. \n   \n Sam Mudd                                    Andrew Holden                                          \n Chief Executive Officer               Chief Financial Officer \n 13 May 2025 \n   \n \n Consolidated statement of profit or loss \n   \n   \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n Year ended 28 February 2025 \n \n \n Year ended 29 February 2024 \n \n \n \n \n   \n \n \n   \n \n \n Note \n \n \n   \n \n \n £'000 \n \n \n £'000 \n \n \n \n \n Revenue \n \n \n \n \n \n 3 \n \n \n \n \n \n 217,134 \n \n \n 207,021 \n \n \n \n \n Cost of sales \n \n \n \n \n \n \n \n \n \n \n \n (53,880) \n \n \n (61,243) \n \n \n \n \n Gross profit \n \n \n   \n \n \n \n \n \n   \n \n \n 163,254 \n \n \n 145,778 \n \n \n \n \n Administrative expenses \n \n \n \n \n \n 4 \n \n \n \n \n \n (96,936) \n \n \n (87,839) \n \n \n \n \n Decrease / (increase) in loss allowance on trade receivables \n \n \n \n \n \n 17 \n \n \n \n \n \n 108 \n \n \n (1,227) \n \n \n \n \n Operating profit \n \n \n   \n \n \n \n \n \n   \n \n \n 66,426 \n \n \n 56,712 \n \n \n \n \n Finance income \n \n \n \n \n \n 7 \n \n \n \n \n \n 8,486 \n \n \n 5,111 \n \n \n \n \n Finance costs \n \n \n \n \n \n 7 \n \n \n \n \n \n (291) \n \n \n (393) \n \n \n \n \n Share of profit of associate \n \n \n \n \n \n 12 \n \n \n \n \n \n (8) \n \n \n 166 \n \n \n \n \n Profit before taxation \n \n \n   \n \n \n \n \n \n   \n \n \n 74,613 \n \n \n 61,596 \n \n \n \n \n Income tax expense \n \n \n \n \n \n 8 \n \n \n \n \n \n (19,772) \n \n \n (14,745) \n \n \n \n \n Profit after taxation \n \n \n   \n \n \n \n \n \n   \n \n \n 54,841 \n \n \n 46,851 \n \n \n \n \n Profit for the period attributable to owners of the parent company \n \n \n   \n \n \n \n \n \n   \n \n \n 54,841 \n \n \n 46,851 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n Pence \n \n \n Pence \n \n \n \n \n Basic earnings per ordinary share \n \n \n \n \n \n 28 \n \n \n \n \n \n 22.78 \n \n \n 19.55 \n \n \n \n \n Diluted earnings per ordinary share \n \n \n \n \n \n 28 \n \n \n \n \n \n 21.95 \n \n \n 18.85 \n \n \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n The consolidated statement of profit or loss has been prepared on the basis that all operations are continuing operations. \n   \n There are no items to be recognised in other comprehensive income, and hence the Group has not presented a statement of other comprehensive income. \n   \n   \n Consolidated statement of financial position \n   \n   \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n As at 28 February 2025 \n \n \n As at 29 February 2024 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n Note \n \n \n \n \n \n £'000 \n \n \n £'000 \n \n \n \n \n Assets \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Non-current assets \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Property, plant and equipment \n \n \n   \n \n \n   \n \n \n \n \n \n 9 \n \n \n \n \n \n 13,581 \n \n \n 8,478 \n \n \n \n \n Right-of-use assets \n \n \n   \n \n \n \n \n \n \n \n \n 10 \n \n \n \n \n \n 1,641 \n \n \n 1,411 \n \n \n \n \n Intangible assets \n \n \n   \n \n \n \n \n \n \n \n \n 11 \n \n \n \n \n \n 43,475 \n \n \n 40,646 \n \n \n \n \n Investment in associate \n \n \n   \n \n \n   \n \n \n \n \n \n 12 \n \n \n \n \n \n 3,185 \n \n \n 3,193 \n \n \n \n \n Contract assets \n \n \n   \n \n \n   \n \n \n \n \n \n 13 \n \n \n \n \n \n 1,773 \n \n \n 2,689 \n \n \n \n \n Deferred tax asset \n \n \n   \n \n \n   \n \n \n \n \n \n 8 \n \n \n \n \n \n 59 \n \n \n 834 \n \n \n \n \n Total non-current assets \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n 63,714 \n \n \n 57,251 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Current assets \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Inventories \n \n \n   \n \n \n \n \n \n \n \n \n 15 \n \n \n \n \n \n 14 \n \n \n 60 \n \n \n \n \n Contract assets \n \n \n   \n \n \n   \n \n \n \n \n \n 13 \n \n \n \n \n \n 9,973 \n \n \n 11,756 \n \n \n \n \n Trade and other receivables \n \n \n   \n \n \n \n \n \n \n \n \n 17 \n \n \n \n \n \n 268,454 \n \n \n 221,815 \n \n \n \n \n Cash and cash equivalents \n \n \n   \n \n \n \n \n \n \n \n \n 18 \n \n \n \n \n \n 113,076 \n \n \n 88,836 \n \n \n \n \n Total current assets \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n 391,517 \n \n \n 322,467 \n \n \n \n \n Total assets \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n 455,231 \n \n \n 379,718 \n \n \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Liabilities \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Non-current liabilities \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Lease liabilities \n \n \n   \n \n \n \n \n \n \n \n \n 10 \n \n \n \n \n \n (1,269) \n \n \n (1,314) \n \n \n \n \n Contract liabilities \n \n \n   \n \n \n   \n \n \n \n \n \n 14 \n \n \n \n \n \n (2,034) \n \n \n (2,137) \n \n \n \n \n Total non-current liabilities \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n (3,303) \n \n \n (3,451) \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Current liabilities \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Trade and other payables \n \n \n   \n \n \n \n \n \n \n \n \n 19 \n \n \n \n \n \n (327,533) \n \n \n (277,917) \n \n \n \n \n Contract liabilities \n \n \n   \n \n \n   \n \n \n \n \n \n 14 \n \n \n \n \n \n (25,245) \n \n \n (19,348) \n \n \n \n \n Current tax liabilities \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n (439) \n \n \n (243) \n \n \n \n \n Lease liabilities \n \n \n   \n \n \n \n \n \n \n \n \n 10 \n \n \n \n \n \n (668) \n \n \n (423) \n \n \n \n \n Total current liabilities \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n (353,885) \n \n \n (297,931) \n \n \n \n \n Total liabilities \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n (357,188) \n \n \n (301,382) \n \n \n \n \n Net assets \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n 98,043 \n \n \n 78,336 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Equity \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n   \n \n \n \n \n \n \n \n Share capital \n \n \n   \n \n \n \n \n \n \n \n \n 20 \n \n \n \n \n \n 2,411 \n \n \n 2,404 \n \n \n \n \n Share premium \n \n \n   \n \n \n   \n \n \n \n \n \n 20 \n \n \n \n \n \n 636,432 \n \n \n 633,650 \n \n \n \n \n Share-based payment reserve \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n 14,879 \n \n \n 11,050 \n \n \n \n \n Merger reserve \n \n \n   \n \n \n   \n \n \n \n \n \n 21 \n \n \n \n \n \n (644,375) \n \n \n (644,375) \n \n \n \n \n Retained earnings \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n 88,696 \n \n \n 75,607 \n \n \n \n \n Total equity \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n 98,043 \n \n \n 78,336 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n   \n   \n The consolidated financial statements were authorised for issue by the Board on 12 May 2025. \n   \n \n Consolidated statement of changes in equity \n   \n   \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n Attributable to owners of the company \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n   \n \n \n   \n \n \n Share capital \n \n \n Share premium \n \n \n Share-based payment reserve \n \n \n Merger reserve \n \n \n Retained earnings \n \n \n Total equity \n \n \n \n \n   \n \n \n Note \n \n \n £'000 \n \n \n £'000 \n \n \n £'000 \n \n \n £'000 \n \n \n £'000 \n \n \n £'000 \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n Balance at 1 March 2023 \n \n \n \n \n \n 2,395 \n \n \n 633,636 \n \n \n 7,235 \n \n \n (644,375) \n \n \n 62,606 \n \n \n 61,497 \n \n \n \n \n Total comprehensive income for the year \n \n \n   \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 46,851 \n \n \n 46,851 \n \n \n \n \n Dividends paid \n \n \n 24(b) \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (36,641) \n \n \n (36,641) \n \n \n \n \n Shares issued during the year \n \n \n 20 \n \n \n 9 \n \n \n 14 \n \n \n - \n \n \n - \n \n \n - \n \n \n 23 \n \n \n \n \n Transfer to retained earnings \n \n \n 27 \n \n \n - \n \n \n - \n \n \n (2,791) \n \n \n - \n \n \n 2,791 \n \n \n - \n \n \n \n \n Share-based payment transactions \n \n \n 27 \n \n \n - \n \n \n - \n \n \n 5,708 \n \n \n - \n \n \n - \n \n \n 5,708 \n \n \n \n \n Tax adjustments \n \n \n 8 \n \n \n - \n \n \n - \n \n \n 898 \n \n \n - \n \n \n - \n \n \n 898 \n \n \n \n \n Balance at 29 February 2024 \n \n \n \n \n \n 2,404 \n \n \n 633,650 \n \n \n 11,050 \n \n \n (644,375) \n \n \n 75,607 \n \n \n 78,336 \n \n \n \n \n Total comprehensive income for the year \n \n \n \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n 54,841 \n \n \n 54,841 \n \n \n \n \n Dividends paid \n \n \n 24(b) \n \n \n - \n \n \n - \n \n \n - \n \n \n - \n \n \n (42,843) \n \n \n (42,843) \n \n \n \n \n Shares issued during the year \n \n \n 20 \n \n \n 7 \n \n \n 2,782 \n \n \n - \n \n \n - \n \n \n - \n \n \n 2,789 \n \n \n \n \n Transfer to retained earnings \n \n \n 27 \n \n \n - \n \n \n - \n \n \n (1,091) \n \n \n - \n \n \n 1,091 \n \n \n - \n \n \n \n \n Share-based payment transactions \n \n \n 27 \n \n \n - \n \n \n - \n \n \n 5,049 \n \n \n - \n \n \n - \n \n \n 5,049 \n \n \n \n \n Tax adjustments \n \n \n 8 \n \n \n - \n \n \n - \n \n \n (129) \n \n \n - \n \n \n - \n \n \n (129) \n \n \n \n \n Balance at 28 February 2025 \n \n \n   \n \n \n 2,411 \n \n \n 636,432 \n \n \n 14,879 \n \n \n (644,375) \n \n \n 88,696 \n \n \n 98,043 \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n   \n \n \n   \n \n \n \n \n   \n   \n Consolidated statement of cash flows \n   \n   \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n   \n \n \n Year ended 28 February 2025 \n \n \n Year ended 29 February 2024 \n \n \n \n \n   \n \n \n Note \n \n \n   \n \n \n   \n \n \n £'000 \n \n \n £'000 \n \n \n \n \n Cash flows from operating activities \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n Cash generated from operations \n \n \n 22 \n \n \n \n \n \n \n \n \n 85,635 \n \n \n 67,333 \n \n \n \n \n Interest received \n \n \n 7 \n \n \n \n \n \n \n \n \n 8,486 \n \n \n 5,111 \n \n \n \n \n Interest paid \n \n \n 7 \n \n \n \n \n \n \n \n \n (224) \n \n \n (330) \n \n \n \n \n Income taxes paid \n \n \n \n \n \n \n \n \n \n \n \n (18,930) \n \n \n (15,109) \n \n \n \n \n Net cash inflow from operating activities \n \n \n \n \n \n   \n \n \n   \n \n \n 74,967 \n \n \n 57,005 \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n Cash flows from investing activities \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n Payments for property, plant and equipment \n \n \n 9 \n \n \n \n \n \n \n \n \n (6,358) \n \n \n (1,334) \n \n \n \n \n Payments for intangible asset \n \n \n 11 \n \n \n \n \n \n \n \n \n (3,709) \n \n \n - \n \n \n \n \n Investment in associate \n \n \n \n \n \n \n \n \n \n \n \n - \n \n \n (3,027) \n \n \n \n \n Net cash outflow from investing activities \n \n \n \n \n \n   \n \n \n   \n \n \n (10,067) \n \n \n (4,361) \n \n \n \n \n   \n \n \n \n \n \n   \n \n \n   \n \n \n   \n \n \n \n \n \n \n \n Cash flows from financing activities \n \n \n \n \n \n   \n \n \n   \n \n \n   \n...

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