Annual Report and Accounts 2024

Bringing people and

technology together

Our year in numbers Contents

£2,099.8m

Gross invoiced income (GII)

(2024: £1,823.0m) +15.2%

£ 217.1m

Revenue

(2024: 207.0m) +4.9%

£163.3m

Gross profit (GP)

(2024: £145.8m) +12.0%

£ 2 7, 6 0 0

Average gross profit per customer

(2024: £25,000)

+10.4%

£66.4m

Operating profit

(2024: £56.7m) +17.1%

1 Gross invoiced income (GII) is a non-IFRS financial measure that reflects gross

income billed to customers, adjusted for deferred and accrued revenue items.

The reconciliation of GII to revenue is set out in note 3(b) to the consolidated

financial statements.

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, that is, the gross

profit achieved on the contract rather than the gross income billed to the customer.

3 2023/24 average GP per customer has been revised from £24,400 in the Annual

Report and Accounts for 2023/24 to remove year-on-year fluctuations caused

by very small customer variations under a single parent.

Strategic report

Our business

01 This is Bytes Technology Group

06 Chair’s statement

08 CEO’s review

փ Our strategy

փ Investment case

12 Measuring progress –

keyperformanceindicators

14 Our strategy in action

Review of the year

18 Our market environment

20 CFO’s introduction

փ Our business model

23 Operational review

28 Financial review

34 Sustainability review

փ Our people

փ Our communities

փ Our planet

47 Risk report

Disclosure statements

58 Task Force on Climate-related Financial

Disclosures (TCFD)

68 Additional environmental disclosures

72 Non-financial and sustainability

informationstatement

73 Viability statement

74 Section 172 statement

Governance report

76 Chair’s introduction to corporategovernance

78 Board of directors

81 Executive Committee

82 The Board’s year

86 Stakeholder engagement (s.172compliance)

92 Audit Committee report

102 Nomination Committee report

106 ESG Committee report

108 Compliance with the UK

CorporateGovernanceCode

112 Directors’ remuneration report

131 Directors’ report

135 Statement of directors’ responsibilities

Financial statements

137 Independent auditor’s report

147 Consolidated financial statements

151 Notes to the consolidated financialstatements

186 Parent company financialstatements

188 Notes to the financial statements

Other information

197 Glossary

199 Company information

199 Financial calendar

This is Bytes Technology Group

The world runs on technology – and

it’s evolving at a breathtaking speed.

Amobile phone is now a powerful

computer. Data storage has moved

from in-house to the cloud. AI has

swiftly gone from science fiction

tobeing an integral part of daily

lives– and it’s only the beginning.

Digital information is now so valuable

it is under constant and ever more

sophisticated attack.

Technology is a source of competitive advantage. It’s not

just about staying safe – it’s about staying ahead. AtBTG,

we strive to make it easier, helping organisations

succeed in a world of change, through trusted

partnerships and transformative technology.

We’re a value-added

ITreseller focused on:

Subscription software

Security

IT services

Cloud-based solutions

Hybrid infrastructure

We serve around

6,000

customers in

thecorporate

andpublicsectors

Annual Report and Accounts 2024

STRATEGIC REPORT

From our beginnings

in a shop outside

Epsom in 1982, we

listed in London

aconstituent of the

FTSE 250 in 2020.

We’re made up of two companies bound

byone dynamic, customer-focused culture:

Bytes Software Services (Bytes) and

Phoenix Software (Phoenix). Today,

asone of the UK and Ireland’s leading

software, security, AI and cloud services

specialists, wecontinue to expand, with nine

offices andmore than 1,200 employees

who we empower and inspire to fulfil their

potential. Many of our colleagues have been

with us along time, becoming experts in

their fields and growing with our customers.

Read more about how colleagues are

central to our success on page 36.

Our offices

Manchester

Salford

Dublin

Reading

Sunderland

York

London

Head office

Leatherhead

Portsmouth

We have more than

1,2 0 0

talented colleagues

1 The company has a primary listing on the Main Market of the London Stock

Exchange and a secondary listing on the Johannesburg Stock Exchange.

2 Bytes Technology Group plc

We have a simple but powerful

business model.

We derive our gross profit from two main

sources: margin and fees. Where we invoice

our customers, we pay the vendor and make

a margin on the products sold. This margin

is often enhanced through rebates from

ourvendors. Where the vendor invoices our

customers directly, the vendor pays us a fee

related to the licensing advice and sales

support we provide to the customer. We also

generate profit by providing professional and

managed IT services to our customers, often

aligned to the software we sell to them. Where

the solutions are strategically important to

our vendors, they may pay us additional fees.

What makes us unique is how everyone at BTG

turns that simple model into one that’s truly

value added. Alongside our deep technical

expertise and support services, we live by our

values in everything we do: being passionate,

acting with integrity, working together, being

kind and respectful, and getting business done

while having fun doing it. Our results speak

for themselves – lasting, mutually beneficial

partnerships with employees, customers

and vendors, which drive consistent growth.

Read more about how we are evolving

with our customers on page 18.

We have close relationships with more than 100 vendors.

Phoenix Software vendors Bytes Software Services vendors

Key vendors for both companies

Bitdefender

Dell

Fortinet

KeepIT

KnowBe4

Lenovo

ManageEngine

NetApp

Okta

One Identity

Progress

Pure Storage

Quest

Red Hat

ServiceNow

Tanium

Thycotic

Trend Micro

Wasabi

Yubico

Avepoint

Cato Networks

Check Point

Commvault

CyberArk

Darktrace

Forcepoint LLC

Ivanti

Netskope

Rapid7

Ringcentral

Saviynt

Security HQ

Snow

Tenable Network

Veritas

Adobe

AWS

Beyond Trust

Cisco

Citrix

Crowdstrike

Druva

IBM

Microsoft

Mimecast

Oracle

Palo Alto Networks

Proofpoint

Red Hat

Rubrik

SentinelOne

Sophos

Varonis

Veeam

VMware (Broadcom)

Zscaler

4 Bytes Technology Group plc

Throughout this report we aim to demonstrate how we grow by pursuing our

purpose: empowering and inspiring our people to fulfil their potential,

sothey can help our customers make smarter buying decisions and

meet their business objectives through technology.

Our future: bringing people and

transformational technologies

togetherto achieve more.

With technology changing so fast, it’s easy to lose sight of what IT is

really for: driving increased efficiencies, keeping data and networks

safe, adopting new technologies such as AI for a competitive

advantage, and communication. Asexperts in what works now – and

by investing to stay ahead ofwhat’s coming – we’ll continue to make

sure that our customers benefit in the years and decades to come.

Annual Report and Accounts 2024

STRATEGIC REPORT

Patrick De Smedt Chair

Chair’s statement

Our talented people and strong

customer focus helped BTG achieve

another record-breaking year in

2024/25. By continuing to invest

inour business and technical

capabilities we have established

astrong platform for future growth.

Strong performance thanks to a great team

I’m very proud of the performance delivered by the

BTG team this year. In challenging market conditions,

especially in the first half of the year, we achieved

double-digit growth for the full year across our key

performance metrics: gross invoiced income, gross

profit and operating profit. For the first time, BTG

achieved gross invoiced income of over £2 billion – more

than double what the company achieved only four years

ago, and a sign of how far we’ve come in just a few years.

On behalf of the Board, I would like to thank all our

people across the company for their efforts this year

and, importantly, for making BTG a great place to work.

We’re also very appreciative of the continued support

of our customers and vendors, including our largest

partner Microsoft, which we’ve worked with since

the1980s.

Strengthening our Board

Strong leadership has been integral to our success this

year. Sam Mudd, who has worked in our business for

22years, was appointed CEO on 10 May 2024, after a

short period as Interim CEO. Following her long-standing

managing director (MD) role at Phoenix, she has now

proved to be a great leader of BTG as a whole, with a

deep understanding of the business and a very effective

working relationship with our CFO, Andrew Holden. Sam

spent a lot of time engaging with the investor community

and our employees in 2024/25, as well as with our

vendors, among whom she is well respected.

Bytes Technology Group plc6

OUR BUSINESS

In June, we were delighted to welcome two more

independent non-executive directors to our Board:

Ross Paterson and Anna Vikström Persson. Ross, a

highly experienced CFO, was appointed Chair of the

Audit Committee, a role he also holds at a FTSE 100

company, while Anna brings a wealth of human

resources expertise to the Board.

I am very pleased with the composition of the Board,

with our directors’ wide range of experience and skill

sets, and grateful for the excellent support they have

given me asChair this year. Following the changes to

the Board, we remain aligned with the FCA’s UK Listing

Rules, with 57% women on the Board and at least one

director from a minority ethnic background. We also

have women in both the CEO and senior independent

director roles.

Engaging our people and teams

Shruthi Chindalur took over as designated non-executive

director for employee engagement in March 2024. She

spent time at both our businesses, Bytes and Phoenix,

engaging with colleagues and giving feedback tothe

Board. This has helped shape several employee-related

initiatives. Following an engaging town hall meeting

atPhoenix in 2023, we introduced the Board to our

employees at Bytes’s headquarters in Leatherhead

inJuly 2024, outlining the company’s strategic

priorities– with ample time allocated for Q&A.

It was good to see the BTG team continuing to

growthisyear to support future expansion, with our

headcount increasing by nearly 18% across all areas

ofthe business. This included sales people and,

importantly, pre-sales people with technical skills

andservice delivery heads, who support our account

managers byhelping customers understand how to

benefit from the latest technology.

Investing to meet customers’ needs

The Board was also pleased to note the impressive

investment in services in 2024/25. BTG has always

been far more than just a value-added reseller that

provides high-quality licensing advice; the team aims

to deliver outstanding customer service, and that

isreflected in our high customer net promoter score

(NPS) of 79. Withtechnology evolving quickly, it is

crucial that our support and technical services

offerings keep evolving too, especially in the key

areasof multi-cloud adoption and migration,

cybersecurity, AI and data.

Focusing on sustainability

For any responsible business, a strong focus on

sustainability is essential, even more so given the climate

crisis. This year, for the first time, the Board formed an ESG

Committee, which is chaired by Anna Vikström Persson

and oversees progress across all aspects of sustainability.

In June 2024 we received validation from the Science

Based Targets initiative (SBTi) forour near-term and net

zero GHG emissions targets, and further improved our ISS

ESG Corporate Rating, which is now one of the highest

in our peer group. I was also pleased to see the launch

of the Group’s carbon literacy awareness programme,

andthe firm measures taken to further reduce our own

emissions, including expanding our electric vehicle (EV)

scheme and installing solar panels at our York office.

Looking ahead with optimism

The Board is optimistic about the opportunities for

further growth in 2025/26 and beyond, as BTG continues

to provide services that enable organisations to adapt,

grow and succeed. Structural market trends – digital

transformation, security, cloud migration, AI/data – are

in our favour, and are the areas we are investing in.

Ourdisciplined growth strategy also means we have

the flexibility to pursue value-enhancing opportunities

as they arise. We look forward to supporting our

executive team and playing our part in growing the

business in the years to come.

Patrick De Smedt

Chair

12 May 2025

For the first time, BTG achieved gross invoiced income of over

£2 billion – more than double what the company achieved only four

years ago, and a sign of how far we’ve come in just a few years.

Shareholder dividends

BTG’s dividend policy is to distribute 40–50% of

post-tax pre-exceptional earnings to shareholders.

The Board is pleased to propose a gross final

dividend of 6.9 pence per share equating to

£16.6 million. Given the company’s continued

strong performance and cash generation, we

arealso proposing a cash returnto shareholders

with a special dividend of10.0pence per share,

equating to £24.1 million. Ifapproved by

shareholders, thefinal and specialdividend

willbe paid towards the end of July 2025.

Annual Report and Accounts 2024

STRATEGIC REPORT

Sam Mudd CEO

CEO’s review

At BTG we’re 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, our loyal

customers and our vendors, we

helped more businesses and public

sector organisations than ever meet

their objectives through innovative

ITsolutions.

In doing so we achieved another strong set of financial

results, with demand for our broad suite of products

and services remaining robust even in a challenging

trading environment. Gross invoiced income rose by

15.2% to a record-high £2.1 billion, and operating profit

increased by 17.1% to £66.4 million, extending our run

of double-digit growth.

The strong performance demonstrates the resilience

of our two businesses, Bytes and Phoenix, and the hard

work done by our teams to maintain close, enduring

partnerships with our customers by providing the

straightforward expert and honest advice that we

havebecome known for. Our high customer NPS

scoreof 79 reflects this.

OUR BUSINESS

8 Bytes Technology Group plc

A growth company with a proven strategy

Expanding our business, year after year, is not

something new for us – even before our initial public

offering (IPO) in 2020 wehad a long track record of

growth, in line with our proven strategy. Our ultimate

strategic goal each year is to grow organically by

winning new customers and doing more with our

existing customers. In 2024/25, weachieved both

ofthose aims, with 656 new customers delivering

£4.3 million gross profit, andexisting customers

generating £13.2 million additional gross profit.

Despite increasing competition, we had notable

successes with public sector tenders, retaining

andgaining customer contracts. An example is our

partnership with East Suffolk and North Essex NHS

Foundation Trust. A relationship nurtured over several

years led to collaboration on a major project designed

to transform the way that staff and patients interact, for

a better service for all. You can read more about that

work on page 14.

I’m also delighted that at the end of April 2025, Phoenix

was granted a Royal Warrant for the supply of IT Managed

Services to The King. I’m extremely proud of the Phoenix

team’s commitment to excellence, sustainability and

service that led to this prestigious award.

What gives me great confidence about our prospects

isthat even though we’ve been growing year on year,

we still have plenty of room to expand. Many vendors

have in recent years pivoted to a ‘partner-first strategy’,

which serves us well. We are strongly focused on

software solutions, which, according to market

intelligence firm IDC, is the fastest-growing segment

ofthe IT industry today. Our share of the overall total

addressable market in the UK is still only around 4%.

Our strategy

We aim to grow organically by winning

new customers and doing more

forexisting customers. We will

complement this approach, as

appropriate, with carefully selected

acquisitions that boost our value.

Along with consistently expanding

oursolutions capabilities and

broadening and deepening our

vendor partnerships, we pursue our

strategy by focusing on three key areas:

putting customers first, investing

inour people and our business,

andinvesting in innovation.

Putting customers first

We focus relentlessly on our customers, helping them find

innovative ways to use technology to improve the way they work,

to control costs and to deliver a better service to their own clients.

Read more about how we are helping our customers on

page14.

Investing in our people and our business

Our people drive our success. We need to retain our exceptional

employees to continue to sell effectively and, to meet our growth

ambitions, we need to keep increasing our headcount.

Read more about how we are growing great people on

page 15.

Investing in innovation

From AI to cybersecurity, technology is advancing rapidly. We

invest in innovation to help our customers stay ahead of the pace

of change, manage the risks and make the most of the benefits.

Read more about how we are investing in innovative

services on page 16.

Annual Report and Accounts 2024

STRATEGIC REPORT

CEO’s review continued

Expanding our solutions capabilities and

vendor partnerships

To take advantage of this big opportunity, and in

support of our main strategic goal, we are focused

on increasing our services capabilities and

broadening our vendor partnerships. The pace at

which technology is advancing today is remarkable,

especially in areas such as AI. From our experience

of using Microsoft’s Copilot AI companion in our own

business, we can see the potential to transform for

the better the way that people work.

But these innovations are complicated, which can

make it hard for our customers to find the best

solutions for their businesses. By building our own

advisory and support services around the wide suite

of software solutions we offer – especially in the key

areas of cloudcomputing, security and AI – we can

help our customers better understand and benefit

from the latest technologies.

In 2024/25, we continued to grow our range of

professional and managed IT services. At Bytes, this

included a successful launch of a new Microsoft 24x7

CSP support service, and significant investments

inour procurement advisory services division.

AtPhoenix, we launched a new managed-cost

management and optimisation service for

Microsoft’s Azure cloud platform, and expanded

ourAI teams and our security operations centre.

Wealso focused on enhancing our technical

capabilities, working with our long-standing vendors

to attain top accreditations, and working more

strategically with newer ones, such as Service Now,

Palo Alto Networks and Commvault, to ensure we

can support our customers’ expanding technology

needs. This deep knowledge of our vendors’

software is crucial in enabling us to give our

customers the best advice on the choice of

softwaresolutions and the interoperability

ofdifferent vendors’ products.

And it’s reflected in how some of the world’s

largesttech companies regularly ask us to join

theirexclusive partner advisory councils and

pilotprogrammes. It shows that they value

ourpartnership, commitment, technical skills,

thebusiness we influence for them and, most

importantly, how we work collaboratively and

sometimes exclusively together on opportunities.

The advantages of an experienced

management team

Maintaining close relationships with vendors and

customers is easier when you have extensive

experience and continuity in your business. This is

especially true of our management teams, which

have many decades of software and solutions

reselling experience and, crucially, the passion,

Investment case

Proven track record and growth strategy

We have a long track record of strong financial performance,

driven by highly motivated employees delivering the latest

technology to a diverse and loyal customer base. Our growth

strategy supports strong free cash flow that allows us to invest

in our businesses.

5-year GP CAGR 15.6%

Customers served in 2024/25 5,913

Attractive market positioning

We have strategic partnerships with many of the world’s leading

software vendors and distribution channels. This includes a

long and deeply embedded relationship with Microsoft, as one

of its largest UK partners by revenue.

More than 1,000 vendors and distributors

One of the biggest UK partners with Microsoft by revenue

Compelling growth opportunity

We operate in a vast, growing market, boosted by technological

tailwinds from digital transformation agendas, cloud products,

cybersecurity, and productivity and AI-enabled tools. Our share

of our total addressable market is around 4%, so we have plenty

of room to grow.

Strong GII growth at a record £2.1bn 15.2%

Strong team culture

Our dynamic culture, based on trust, collaboration and

innovation, drives our operational excellence and high

employee retention rates, and increases sales productivity,

customer satisfaction and repeat business.

Employee net promoter score (eNPS) 57

10 Bytes Technology Group plc

OUR BUSINESS

expertise and credibility to further grow our company.

Jack Watson and Clare Metcalfe, who have both been

with us for many years, are strong leaders of Bytes

andPhoenix, respectively. I am really pleased with

what they and their teams achieved in 2024/25,

fromdelivering double-digit profit growth in their

businesses, to broadening our customer base and

being among Microsoft’s top partners for the rollout

ofCopilot inthe UK.

Maintaining our strong, inclusive culture

As one of the country’s largest IT resellers, we continue

to attract talented, skilled people who want to be a part

of our journey of success, and we now have more than

1,200 colleagues. As we do every year, we worked hard

to ensure our unique culture that has brought us so far is

maintained, even as we become a bigger company. To

harness the strengths of our two businesses, and protect

our culture as we grow, we will appoint our firstChief

People Officer (CPO) in the 2025/26 financial year.

People are at the heart of business, and I am

committed to improving this year’s eNPS results which,

while still above the industry average, have fallen from

their previous high level of 71 to 57. This change, we

think, reflects a turbulent year both externally, with

theweak economy and political uncertainty, but also

internally, with the necessary transformation and

structural changes in our operations and leadership

teams. That said, we can be very proud of our high

rankin the Great Place to Work survey for the ‘Large

Company’ category – Phoenix at 9th and Bytes at 85th

– and our FTSE Women Leaders Review 2024 report,

in which BTG was named the most improved company

in the FTSE 250 in the ‘Women onBoards’ category.

At a time when progress against the basic principles of

diversity and inclusion is being questioned, challenged

or blocked, it is good to celebrate such moments with

our FTSE peers. As a female CEO, I intend to use my

high profile to continue to identify and remove any

barriers to participation and career progression at

BTG, and will ensure that diversity, equality and

inclusion remain central themes for our business.

Bydoing so, we can fully embrace our colleagues’

unique differences, which lead to better ideas and

insights, and support our strong, innovative culture.

Increasing our geographical footprint

As our headcount has grown, we’ve made it a priority to

provide the right office environments in the right areas.

We want to offer an exciting and vibrant working space

for all our staff, filled with areas to collaborate and

socialise. Following the work done at Phoenix’s offices

in York, we carried out a similar transformation at Bytes’s

Leatherhead office this year. Also at Leatherhead,

weacquired two other buildings in our business park

tocater for our further expansion. We opened new

offices in Portsmouth and Sunderland to be closer

toour customers and hire staff from those areas,

andwe expanded our London office.

A commitment to sustainability

As a responsible business, we are committed to ensuring

that our growth does not come at the expense of the

environment. While we’re not a big greenhouse gas

(GHG) emitter ourselves, the software and services

weprovide do have an impact on the planet, especially

through theenergy required to power AI solutions

andcloud storage. In 2024/25, we reached a crucial

milestone onour path to net zero, with the SBTi validating

our GHG emissions targets. Ourefforts to reduce our

carbon footprint this year included installing solar

panels at our York office andexpanding our EV scheme.

Looking ahead

Turning to the future, we expect that the macroeconomic

conditions will remain challenging and uncertain, but

we know from experience that when times are tough,

organisations look to technology to make them more

efficient and resilient. And our sector has tailwinds: we

are still intheearly stages of the take up of AI-powered

platforms and products, while the need for ever

moresophisticated cybersecurity and cloud-based

products will only increase. With a great team behind

me, I am excited to grow our business further by

meeting customers’ evolving needs as we continue

through2025and beyond.

Sam Mudd

Chief Executive Officer

12 May 2025

By building our own advisory and support services around the wide

suite of software solutions we offer – especially in the key areas of

cloud computing, security and AI – we can help our customers

betterunderstand and benefit from the latest technologies.

Annual Report and Accounts 2024

STRATEGIC REPORT

Measuring progress

Financial

Gross invoiced income

£2,099.8m +15.2%

Revenue

2, 3

£217.1m +4.9%

2025 £2,099.8m

2024 £1,823.0m

2023 £1,439.3m

2022 £1,208.1m

2021 £958.1m

2025 £217.1m

2024 £207.0m

2023 £184.4m

2022 £145.8m

20 21 £3 9 3 .6 m

Gross profit £163.3m +12.0% Gross margin

75.2%

2025 £163.3m

2024 £145.8m

2023 £129.6m

2022 £107.4m

20 21 £8 9.6m

2025 75.2%

2024 70.4%

2023 70.3%

2022 73.7%

20 21 2 2 . 8 %

Operating profit £66.4m +17.1% Operating profit as % of gross profit 40.7%

2025 £66.4m

2024 £56.7m

2023 £50.9m

2022 £42.2m

2021 £26.8m

2025 40.7%

2024 38.9%

2023 39.3%

2022 39.3%

2021 29.9%

Cash conversion

113.8% Cash £113.1m +27.4%

2025 113.8%

2024 116.4%

2023 93.4%

2022 144.7%

20 21 18 2.9%

2025 £113.1m

2024 £88.8m

2023 £73.0m

2022 £67.1m

2021 £20.7m

We track our progress against financial, strategicand sustainability KPIs.

1 Gross invoiced income is a non-IFRS financial measure that reflects gross income billed to customers, adjusted for deferred and accrued revenue

items. The reconciliation of gross invoiced income to revenue is set out in note 3(b) to the consolidated financial statements.

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 – that is, the gross profit achieved on the contract and not the

gross income billed to the customer.

3 The 2022 figures for revenue and gross margin reflect the change in accounting policy under IFRS 15, which took effect from that year and has been

applied in all subsequent periods.

4 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.

5 Revised from 5,978 in Annual Report and Accounts 2023/24 to remove year-on-year fluctuations caused by very small customer variations under a

single parent.

6 Revised from £24,400 in Annual Report and Accounts 2023/24 to remove year-on-year fluctuations caused by very small customer variations under

a single parent.

12 Bytes Technology Group plc

OUR BUSINESS

Strategic Sustainability

Customer numbers 5,913 +1.5%

Employee numbers 1,245 +17.8%

2025 5,913

2024

5,828

2023 5,941

2022 5,330

20 21 5,147

2025 1,245

2024 1,057

2023 930

2022 773

20 21 6 8 5

Average gross profit per customer £2 7,6 0 0 +10.4% Employee net promoter score 57

2025 £27,600

2024

£25,000

2023 £21,800

2022 £20,100

2021 £17,400

2025 57

2024 71

2023 70

2022 69

20 21 6 9

Renewal rate 109%

2025 109%

2024 109%

2023 116%

2022 111%

20 21 10 7 %

part of our ongoing commitment to support positive

change in our environment and communities where we

operate, we continue to make contributions in various

ways to corporate social responsibility activities.

Customer net promoter score 79

2025 79

2024 82

2023 77

2022 64

20 21 6 3

% gross profit from existing customers 97%

2025 97%

2024 97%

2023 96%

2022 93%

20 21 9 5%

Annual Report and Accounts 2024

STRATEGIC REPORT

Our strategy in action

Putting customers first

Phoenix has worked with East Suffolk and North Essex NHS Foundation Trust

for a number of years and has supported the Trust on many key projects.

Over the past year, Phoenix has worked strategically with the

Trust, providing the software and infrastructure needed to

support its electronic patient record (EPR) system, Epic. Epic

isone of the leading global EPR systems and the Trust selected

this as “the best option for patients and staff, knowing these

systems make patient care much safer”. The EPR will help to

streamline multiple digital systems across Ipswich Hospital,

Colchester Hospital, and five community hospitals in East

Suffolk and North Essex, into one single system.

Mark Caines, Associate Director of ICT, East Suffolk and North

Essex NHS Foundation Trust, says that partnership and openness

are key elements of the successful partnership with Phoenix.

“My team and I can approach them on various levels and that

trusted relationship we have had over the years has significantly

contributed to the success of numerous digital projects and

initiatives across the Trust.”

Keith Martin, Sales Director at Phoenix, says that the dedication

of both teams is what made the project so successful. “By working

closely and collaboratively, East Suffolk and North Essex NHS

Foundation Trust and Phoenix found a solution that met the needs

of its patients and staff. Without that strong relationship, the

project wouldn’t be where it is today.”

Phoenix are a strategic and trusted partner of the Trust,

and that relationship has been really important during

the many projects we have worked on with them.

Mark Caines

Associate Director of ICT, East Suffolk and North Essex NHS Foundation Trust

14 Bytes Technology Group plc

OUR BUSINESS

Investing in people and our business

At BTG we are proud to build the future of IT by offering great apprenticeship

opportunities across a range of business areas, allowing people to earn while

theylearn on the job. This year at Bytes, eight people took part in apprenticeships,

including Callum Ring and Emma de Lemos.

I thoroughly enjoyed undertaking my

apprenticeship. The course content was

extremely relevant and gave me so much

more insight into my specialism. I have

been able to really apply my learnings day

to day and it has given me the confidence

to grow further in my role as a learning

and development consultant, to support

the business’s needs.

Bytes’s motto is to ‘grow great people to

deliver amazing things’, and the backing I

have received from the business and my line

manager to undertake the apprenticeship

has been a true testament to this.

I think when most people begin a degree,

the expectation is that they will gain

specific technical knowledge to begin

acareer in their chosen field. However, a

degree apprenticeship is a little different.

Working at a company like Bytes means

that you’ll pick up technical knowledge

considerably faster than most ‘traditional’

students, as we are living and breathing

the technology that is taught.

The real benefit that I have seen comes

inthe soft skills – understanding how to

speak to customers and allowing them

tounderstand complex technologies

inavery simple way is key to being a

goodconsultant. While completing

theapprenticeship, I was promoted

toMicrosoft security services team

lead,where the soft skills are helping

mefurther. Now it is important to

understand the needs of my team

andlisten to differing points of view,

allofwhich are taught within the

degreeitself.

Emma de Lemos

Learning and development consultant

business partner apprenticeship

(level 5) – achieved a distinction

Callum Ring

Digital and technology solutions degree

apprenticeship, specialising in cloud

solutions (level 6) – achieved a first

Annual Report and Accounts 2024

STRATEGIC REPORT

Our strategy in action continued

Investing in innovation

In 2024, we celebrated 25 years of providing innovative cybersecurity software solutions

and services to our customers, helping them mitigate risks and stay secure in a world

ofrising threats.

WSH is a food and hospitality company serving 2.6 million customers

everyday. They recognised that any disruption from cyberattacks

coulddrastically affect their fast-paced business. But they only had

alimited security budget and lacked the resources to manage potential

vulnerabilities 24/7 across many locations. Bytes found the answer.

Bytes + WSH

Bytes has been an exceptional partner in our

journey to fortify our security measures. Their

support and expertise have made a tangible

difference, and we highly recommend their

services to any organisation looking to

enhancetheir security capabilities.

Jack Mersey

Chief Information Security Officer, WSH

Read the

fullcase study

Shelter is a prominent housing and homeless charity. Safeguarding the

personal data of the people it supports is not just critical for their safety,

butalso in maintaining Shelter’s reputation as a trustworthy organisation.

To ensure the protection of its data, maintain compliance with stringent

industry standards, and to stay ahead of evolving cyber threats,

Shelterturned to Phoenix.

Phoenix + Shelter

We have built a long-standing partnership with

Phoenix based on trust and proven success.

Having collaborated with Phoenix for multiple

services, including Microsoft-related solutions,

for over five years, we felt confident in entrusting

our critical security needs to Phoenix.

Rob Fisher

IT Operations and Security Manager, Shelter

Read the

fullcase study

16 Bytes Technology Group plc

OUR BUSINESS

Review of the year

18 Our market environment

20 CFO’s introduction

փ Our business model

23 Operational review

28 Financial review

34 Sustainability review

փ Our people

փ Our communities

փ Our planet

47 Risk report

Why do customers choose

BTG for cybersecurity?

We have more than 25 years

ofexperience in cybersecurity.

Through our team of more than

70specialists, we support

organisations across a range of

security areas, including solutions,

technical, delivery, consultancy

andvendor management.

Lorna Gelstharp

Cybersecurity Solutions Specialist

Annual Report and Accounts 2024

STRATEGIC REPORT

Our market environment

Spending on IT remained robust in the UK in 2024/25, despite political and

ongoing economic uncertainty. Corporate and publicsector organisations

continued to invest in technology to make them more productive, efficient and

secure. New transformative technologies, such as generative AI, attracted

particularly strong interest, as did cybersecurity solutions services.

What trends are shaping UK technology?

Migration to the cloud

Switching from on-premise applications to third-party hosted

software offers more flexibility, scope for analytics, and

sustainable credentials.

Cybersecurity

As the risk and sophistication of cyberattacks increases,

sodoes the need for multilayered protection.

AI and data

AI-enabled tools have the potential to help people become

more productive and creative.

Digitalisation

Organisations are looking to digital technology to improve

theiroperations and create efficiencies.

Cost optimisation

Vendor price rises and economic pressures mean customers

are demanding greater value from their technology solutions

and services.

$5.6tn

Forecast worldwide

IT spending in 2025

18.7%

Forecast annual growth in cloud

revenueinthe UK from 2025 to 2029

$94bn

Forecast spending on AI-related

servicesin Europe in 2025, up

from$78bnin 2024

44%

Increase in global

cyberattacks in 2024

Strong growth in global IT spending forecast

Spending on technology worldwide is forecast to grow by 9.8%

in 2025, to $5.6 trillion, according to the research firm Gartner,

as IT budgets keep pace with price rises.

In Europe, the

pictureis similar, with IT spending expected to grow by 8.7%,

to$1.3trillion, ‘the highest growth rate in IT spending in a single

year in Europe since the post-pandemic surge in 2021,’ Gartner

noted.

Spending in the UK tech market is generally in line with

these global trends.

Cloud and cybersecurity software

andservicesdrive growth

Our main business areas are software and IT services, which

continue to be the two biggest, and fastest-growing, areas

oftechnology. UK revenue from software, which is mainly

cloud-based, is projected to grow by 6.0% annually, between

2025 and 2029, according to the research company Statista.

Over the same period, spending on IT services is forecast to

increase by 6.5%.

Revenues in the public cloud and cybersecurity

markets are expected to rise by 18.7% and 8.6%, respectively.

5, 6

For all sources and references, see Endnotes on page 199.

18 Bytes Technology Group plc

REVIEW OF THE YEAR

Our target products and services

Software 95% of GII

We sell a wide range of software products from

multiple vendors, mainly purchased as subscription

licences and increasingly hosted in the cloud.

IT services 3% of GII

These include managed IT services around a wide

range of vendor technologies, including 24x7 support

for critical cloud and security offerings; software asset

management and project-oriented consulting services

including IT deployment assistance, cloud migrations

and software cost optimisation; and AI projects.

Hardware 2% of GII

We sell a wide range of hardware, including desktops,

monitors, mobile phones, servers and networking

equipment.

The investments in security highlight the ever-

increasing threat of cyberattacks. A report by the

insurance group QBE in 2024 revealed that 69% of

medium to large businesses in the UK were disrupted

by cyber events in the past 12 months.

Initsannual

report, The State of Global Cyber Security 2025, Check

Point reported a 44% year-on-year increase in global

cyberattacks in 2024. It noted the increasing use of

AIby bad actors, and a 58% increase in ‘infostealer’

attacks, where malicious software is used to breach

computer systems and steal sensitive information.

Value and flexibility in focus

The essential role of technology in today’s world,

andthe speed at which it’s evolving, means that

organisations are reluctant to pause IT spending

forlong, even in tough economic times. But they are

seeking greater value and flexibility; they want to be

able to control their costs and quickly adapt to changes

in the business environment. Cloud computing, with its

variable costs and hybrid infrastructure, which offers a

mix of cloud and on-site infrastructure, are attractive

for this reason. So too are support services, from

security to AI, which reduces the need to hire in-house

experts. This all plays to our strengths, since we pride

ourselves in providing what customers need, rather

than what might drive our profits in the short term.

Our place in the UK tech sector

We’re one of the UK’s leading value-added resellers

(VARs), providing IT products from a broad range of

technology vendors to a large and diversified base of

private and public sector organisations. Our potential

market is large. UK business-to-business customers buy

a substantial portion of their technology products from

VARs and other resellers and distributors. Currently,

our share of our total addressable market is around

4%. And because no one company dominates the

market, we have a lot of room to expand.

Enabling real-world AI adoption

Interest in AI is surging in the private

and public sectors, with organisations

seeking to improve service delivery,

efficiency and innovation.

Commercial tools accelerate spending

With the release of commercial AI tools, such as Microsoft’s

Copilot, spending on IT services related to AI grew strongly in

2024. In Europe, it reached $78 billion, and is forecast to grow

by 21% in 2025, aided by demand for generative AI (GenAI)

solutions, according to Gartner.

According to Microsoft, which partnered with LinkedIn for its

2024 Work Trend Index, three in four knowledge workers now

use GenAI at work, with usage doubling in just six months.

AtBTG, most of our people now use Copilot daily, resulting

inincreased productivity and a reduction in repetitive tasks.

We’ve also seen very strong uptake from our customers to

improve efficiency across their organisations.

Partnering with Microsoft to drive transformation

As a leader in AI implementation in the UK, we’re confident that

the technology will play a significant role in our future growth.

Because true AI adoption doesn’t stop at installation, we have

invested in building dedicated teams focused on change

management, security and skills enablement.

In this new AI era, our strong partnership with Microsoft is

integral to our goal of helping organisations navigate change

confidently and effectively. We bring the on-the-ground

expertise, sector insight, and capabilities needed tomake

AIadoption successful, and Microsoft’s tools, platforms

andinfrastructure allow us to do it at scale.

BTG’s commitment to AI innovation is

unquestionable. They were one of the first

adopters of M365 Copilot internally and

areone of the leading Microsoft partners

helping organisations across the UK with

AItransformation. They have developed and

delivered AI and related security solutions,

creating true impact and results across

industries such as government, healthcare,

education, not-for-profit, retail and legal.

Eleri Gibbon

Small, Medium and Corporate Lead UK, Microsoft

Annual Report and Accounts 2024

STRATEGIC REPORT

Andrew Holden CFO

CFO’s introduction

In a year marked by economic and

political uncertainty, we proved the

resilience of our business model by

delivering another set of strong

financial results. We saw increased

customer demand in keyareas such

as AI, cybersecurity and cloud

computing, and for our services

offerings, in which we’ve invested

strongly.

At the end of the first half of the financial year we

reported growth in gross profit of 9%. An exceptional

second half saw gross profit grow by 15%. This has

resulted in our full-year gross profit growing by 12% to

£163.3 million, driven by a 15.2% increase in our gross

invoiced income to £2.1 billion. Our operating profit

grew by 17.1% to £66.4 million and we ended the year

with strong cash conversion above our target of 100%.

Helping our customers do more with AI

In recent years we’ve benefited from a few boosts in

our sector, including strong demand after the Covid-19

pandemic and vendor price increases. By the start of

the 2024/25 financial year these had largely played

out, and we faced a flagging economy, exacerbated by

political uncertainty because of the election in the UK.

The weaker business confidence was clear in the first

half of the year, when spending in the corporate sector

was muted, even as the government maintained its

investment in IT. We continued to engage closely with

our customers, benefiting in the second half of the year

as demand in the corporate market picked up and was

maintained in the public sector. Over the full year, the net

number of customers we served rose by 1.5%, to just

under 6,000, and gross profit per customer increased by

10% to £27,600, with existing customers contributing

97% of our total gross profit at a renewal rate of 109%.

REVIEW OF THE YEAR

20 Bytes Technology Group plc

This is in line with our strategy of winning new customers

and then doing more with them each year byproviding

additional products and services to meet their evolving

requirements. Our work with AI products, including

Microsoft’s Copilot, is a good example. During the year

we delivered £1.0 million worth of workshops, funded

through Microsoft incentives, to help our customers

understand the potential benefits of the technology,

and we grew our AI teams so we could provide even

more advice and support. We’ve already seen positive

results: since the launch of Copilot in the second half

ofthe 2023/24 financial year, we’ve seen increased

licence sales and implementation from our customers,

and we expect this trend to continue in the coming years.

Supporting our core software income with

enhanced services offerings

Gross profit from software licence sales rose by 12.0%

to£146.0 million and contributed 89% of our total gross

profit. Alongside this core offering, we are focused

ongrowing our technical and service solutions. We

continued to develop services to support customer

readiness and adoption of AI, and expanded our

in-house AI-dedicated teams, which are creating

bespoke solutions for different sectors of the market.

We’ve also been enhancing our IT services capabilities

for cloud computing and security. Gross profit from

internal services increased by 28.5% to £8.7 million

in2024/25, contributing 5.3% of our total gross profit,

up from 4.6% in 2023/24.

While our growth this year was underpinned by the

gross profit increases in software and internal services,

we saw a 5% fall in hardware growth. After a weak first

half of the year, hardware growth in the second six

months bounced back by more than 50%, compared

tothe same period in 2023/24. In the public sector we

grew gross profit by 18%, and in the corporate sector

by 9% – the latter seeing strong growth of 15% in the

second half of the year following a slow start.

Our operating profit to gross profit ratio of 40.7%

reflects our disciplined approach to cost management

and operating efficiency.

The strength of our finance team

The loyalty of our people played a big part in delivering

these results. Many of our colleagues have been with

us for a long time, and this is certainly the case for

ourfinance teams, both at Group level and in our

operations. Their collective experience and expertise

are great assets, especially during a busy year like this

one, when we’ve been preparing for the changes to

theaccounting software at Bytes and Phoenix, and

redeveloping our business portal, where we transact

with our customers. I’m grateful to all of them for their

hard work this year, but I’d particularly like to thank

Simon Rippon, Finance Director of Phoenix, who

retired after more than 20 years with the business.

WithSimon’s departure, we welcomed Peter Goodrick,

andwe look forward to the benefit of his expertise

andexperience in the industry in the coming years.

Our business model

As a value-added IT reseller, we have

asimple business model that enables

usto achieve consistent growth and to

create value for all our stakeholders.

We build lasting, mutually beneficial partnerships

with our employees, customers and vendors.

We employ people who are passionate about technology and

our customers, including many who are long-serving and have

a high level of technical skills, knowledge and expertise. Our

leadership team is highly experienced.

We have deep relationships with many of the world’s biggest

software companies – we are one of Microsoft’s largest UK

partners by revenue – and work closely with them to

understand the latest transformational technologies.

We serve customers across the corporate and public sectors in the

UK and Ireland, many of whom have been with us for a long time.

This creates a strong value proposition…

For vendors: who get access to a large, growing customer

base, meaning they don’t need to employ their own customer

relationship managers. Our strong relationship with Microsoft

helps open the door to new customers and provides other

vendors a credible entry point to those customers.

For customers: rather than having to listen to many sales

pitches for different IT products, customers rely on us to

advisethem on the best options in the market for their needs.

We know which products work together and we make them easy

to buy. And we have a strong, ever-growing suite of our own

professional and managed IT services, enabling us to provide

comprehensive support on a one-off or day-to-day basis.

…enabling us to earn profits…

When selling software or hardware we earn a margin in one of

two forms:

• • ‘Pure’ margin, where we buy from a vendor at one price and

sell to a customer at a higher price. This often comes with

additional margin in the form of rebate we subsequently

receive from the vendor

• • Fees, where the customer pays the vendor directly and the

vendor rewards us by way of a fee for managing the customer

relationship and providing licensing advice and support to them.

Whether pure margin or fee based, it is all counted as gross

profit – the most important measurement for our business.

We also earn profit from our suite of professional and managed

IT services.

…which we use to invest in our people and

operations, reward shareholders and support

our communities.

Annual Report and Accounts 2024

STRATEGIC REPORT

CFO’s introduction continued

Evolving with our vendors

Our biggest vendor partnership is with Microsoft,

andwe also have deep relationships with many other

world-class software vendors. We work with these

vendors to align our sales efforts and service offerings

with their strategic objectives, and they incentivise us

accordingly through rebates, which is one of the ways

we make a profit (see more details in Our business

model on page 21).

From January 2025, we saw rate reductions in parts of

Microsoft’s Enterprise Agreement (EA) incentive plan.

This represents the continuing shift away from certain

transaction-based rewards, and a greater focus on

activity-based and usage-based incentives, which

aligns strongly with the services part of our strategy.

The Cloud Solution Provider (CSP) programme, which

continues to be fast growing and currently provides

almost one third of our Microsoft incentive payments, is

unaffected. So, while the EA changes will result in lower

incentives under that programme, we expect they will

be offset by the growth we’re already generating across

other schemes as we focus our attention on CSP and

Microsoft cloud, security and AI service activities. We

have a long track record of successfully adapting to

such changes and continuing to work with our vendors

in a mutually beneficial way. We did not see a material

impact from the EA change in 2024/25 and we do not

expect to see one in the coming financial year.

Looking ahead

We will continue to keep a close eye on our growth

inthe coming year, especially in light of ongoing

economic uncertainty. But I am confident that our

strong vendor partnerships and the investments we’ve

made this year and in recent years – in our people,

services, and internal and customer-facing systems –

will stand us in good stead for years to come. With

ourheadcount continuing to grow, reaching 1,245

byyear end, we took the opportunity to acquire the

other two buildings that occupy our office park in

Leatherhead. This will give us enough space not only

for the people we have taken on this year, but also to

accommodate future growth.

In 2025/26, we will also focus on bedding in our new

accounting, operational and marketplace platforms,

ensuring that our culture remains consistent and strong

as we continue to expand, and providing honest, expert

advice to our customers so they can meet their

business objectives through technology.

Andrew Holden

Chief Financial Officer

12 May 2025

I am confident that our strong

vendor partnerships and the

investments we’ve made will

standus in good stead for

yearstocome.

22 Bytes Technology Group plc

REVIEW OF THE YEAR

Operational review

We are made up of two complementary businesses that share one culture – and

adeep commitment to our people, our customers and our vendors. In 2024/25

Bytes and Phoenix delivered strong performance, as we grew our customer

numbers, headcount, geographical footprint, gross profit and our range of offerings.

Robust demand for software,

solutions and services

Across the corporate and public sectors,

growth was led by:

• • Security – with the ever-increasing

threat of cyberattacks, organisations

continue to invest in a wide range of

advanced protection products and

security-focused managed services

to bolster their defences

• • Subscription software – software

contracts are now almost entirely

subscription-based, providing a

strong annuity-based income stream

• • Cloud-based solutions – alongside

the migration of data and applications

to the cloud, organisations are

investing in the latest cloud-based

technologies, including AI

• • IT services – as technology becomes

ever more advanced and purchasing

options more complex, demand is

growing for expert support through

awide range of solutions including

security, cost optimisation and

licencecompliance

• • Hybrid infrastructure – combining

the security and control of on-site

data centres with the flexibility of

cloud services enables organisations

to better manage their IT ecosystems.

Staying agile and increasing

ourrange of services

With the advent of AI-enabled software,

the rapid increase in data and the growing

complexity of cybersecurity, we need to

stay agile and innovative to help our

customers get the most out of the latest

technology. One of the main ways we do

this is through our professional and

managed IT services, which complement

the solutions we sell, and we therefore

saw heightened focus on services this

year from both businesses.

At Bytes, we introduced a 24/7 expert-

level Microsoft support service to

helpcustomers manage their CSP

subscriptions. We also launched a new

network security service, adding to our

strong suite of solutions around

cybersecurity.

At Phoenix we expanded our support and

managed services around a wide range

oftechnologies and increased the vendor

accreditations held by our consultants.

The services provided by our security

operations centre, which is built around

Microsoft’s Sentinel solution, grew strongly

this year, underpinned by our Azure Expert

status. We also continued to expand our IT

professional services, with a key focus on

cloud security and AI solutions.

Staying agile means adapting to vendor

incentive programmes, which is a

continual part of our business; changes

inthese programmes affect the fees and

rebates we receive when selling their

products. Microsoft channel incentives

are frequently changed, and BTG has a

good track record of reacting to these

while maintaining our gross profit levels

on software. For example, towards the

end of this year, Microsoft reduced some

of the rates in its EA incentive plan to

continue the transition of its rewards

froma pure transactional basis towards

services-led activities. This is very much

in line with our own strategy. Atthe same

time, Microsoft maintained the sizeable

incentives available to us in their CSP

programme, which is a high growth

income stream for BTG.

We invested significantly in ramping up our

services capability this year. The level of

experience that we’ve brought in this year

goes beyond anything that we’ve done in the

past 18 years that I’ve worked in this company.

Jack Watson

MD Bytes

Bytes and Phoenix share:

• • BTG’s values, strategic

ambitions, governance

structures

• • Insights and good practice

• • Industry-leading skills

• • Can-do culture

• • Representation and

engagement in Group

ExecutiveCommittee and

steering committees

• • Comparable products

andservices.

The businesses have

theirown:

• • Identities

• • Management teams

• • Individual but complementary

routes to market

• • Customer bases and markets

• • Offices.

Annual Report and Accounts 2024

STRATEGIC REPORT

Operational review continued

Key facts

Bytes Software Services

Markets

Corporate and public sectors across a wide range of industries,

including professional services, manufacturing, retail, central and

local government, and technology, media and telecommunications.

Vendors

Our partners include Microsoft, AWS, Palo Alto Networks,

Check Point, Mimecast, Adobe, Darktrace, Security HQ,

Commvault, LicenseDashboard and Zscaler

HQ Leatherhead, Surrey

Other offices Reading, London, Manchester,

Dublin,Portsmouth

MD Jack Watson

Employees 760

Customers 3,204

Phoenix Software

Markets

Mostly public sector, across a broad range of areas, including

central and local government, charities, education, emergency

services, healthcare and housing. Its in-house developed License

Dashboard platform has clients in North America and Europe.

Vendors

Our partners include Microsoft, VMware, Dell,

Adobe,Sophos,Citrix, Mimecast, Rubrik,

ServiceNow,Verkadaand Tanium

HQ Pocklington, Yorkshire

Other offices Salford, Sunderland

MD Clare Metcalfe

Employees 477

Customers 2,709

Bytes Technology Group (head office)

HQ Leatherhead, Surrey

Employees 8

CEO Sam Mudd

CFO Andrew Holden

24 Bytes Technology Group plc

REVIEW OF THE YEAR

Helping our customers and

ourpeople benefit from AI

At BTG we are proud that both of our

businesses were selected to be part of

the ‘customer zero’ programme for

Microsoft Copilot, an AI-enabled tool

designed to boost productivity. That

meant we were able to use Copilot

internally, ahead of the wider market,

andthen take the lessons we learnt,

including around areas like compliance

and governance, to our customers.

We saw strong customer interest in

Copilot in 2024/25, providing licences to

a broad range of customers, with Bytes

one of Microsoft’s top UK resellers in the

small and medium enterprises market.

Wedelivered £1.0 million worth of

workshops, funded by Microsoft,

wherewe demonstrated Copilot’s

potential and how best to deploy it.

At Phoenix we finished the 2024 calendar

year as one of Microsoft’s leading partners

for Copilot workshop engagements

delivered in the UK and across EMEA –

working with our customers to help them

make the most of the software’s full potential.

We also setup a new AI team to give even

more support and advice to our customers.

Strengthening our teams

andourculture

With our businesses continuing to grow,

we expanded our teams and skills to

maintain our high levels of service. This

year, the number of employees at Bytes

rose by 20% to 760, and at Phoenix by 14%

to 477. We complete the Group with our

head office team of eight, which includes

our CEO and CFO and was bolstered this

year with additional governance and

investor relations expertise.

Both businesses continued their

successful apprentice schemes for sales

and technical staff, which are an excellent

source of talent. We also focused on

helping our existing people increase their

technical capabilities, supplemented by

bringing in expertise to ensure we have

the right specialist skills to keep up with

the evolving technology, and to accelerate

our growth. At Bytes, we recruited,

among others, Hayley Mooney as Chief

Commercial Officer, Ryan Herbert as

Enterprise Sales Director and John

Francis to head up our vendor solutions

department. These three senior sales

leaders bring a wealth of experience in

sales management and direct sales

experience and solution selling.

As we do every year, we worked hard to

maintain our strong culture as we grow.

For example, working with a specialist

consultant, Phoenix published a culture

blueprint in 2024/25, which is relevant

toall staff and especially useful for

onboarding new starters. Read more

onpage 36.

A good marker of our growth is the need

for more office space, and this year Bytes

opened an office in Portsmouth and

increased its office space in London and

Manchester, while Phoenix opened an

office in Sunderland. Most recently Bytes

purchased the two buildings next to its

current main site in Leatherhead to

provide an additional 27,000 square

feetto cater for immediate and future

capacityrequirements.

Empowering accessibility for all with

MicrosoftCopilot

The Charities Aid Foundation exists to improve the effectiveness of both

charities and their donors, distributing more than £1.1 billion to around 250,000

charities in 100 countries each year. The CEO is Neil Heslop, OBE, who, despite

being blind since his 20s, manages his responsibilities effectively with the aid

ofadvanced technology. At Phoenix, we helped Neil use Microsoft Copilot to

transform his own working practices, and to enhance accessibility, efficiency

and collaboration across the organisation.

Read the

fullcase study

Case study

While we always

payattention to our

people and culture,

it’s something we

worked on incredibly

hard in 2024/25.

We’re making sure

that the collaboration

and openness that

has brought us this

farwill continue to

drive us forward.

Clare Metcalfe

MD Phoenix

Annual Report and Accounts 2024

STRATEGIC REPORT

Operational review continued

Delivering growth in 2024/25

Close customer relationships are crucial to our success. We monitor our progress using four key metrics: customer numbers,

ourshare of their business, gross profit per customer and our customer NPS. This year we:

Increased our customer base Maintained a high renewal rate

5,913

This year

5,828

Last year

109%

This year

10 9 %

Last year

We did business with numerous new customers this year

including Smartest Energy, Hampshire and Isle of Wight

Healthcare, and Hotel Chocolat at Bytes, and The Royal

Mint, University ofBradford and Tate Modern at Phoenix.

This metric tracks the growth in gross profit from existing

customers. Phoenix did more business with established

customers such as East Suffolk and North Essex NHS

Foundation Trust, the Home Office and DEFRA, and Bytes

with the Financial Ombudsman Service, Elexon and WSH.

Maintained industry-leading NPS Increased gross profit per customer

This year

Last year

£ 2 7, 6 0 0

This year

£25,000

Last year

The score measures the likelihood of our customers

recommending us to others and can range from -100 to +100.

The benefits of a broad customer base

We strive to create lasting relationships with our customers. However, the marketplace is competitive, so we try not to depend

too much on specific customers. In 2024/25, no single customer represented more than 1.3% of our gross profit.

1 Revised from 5,978 in 2023/24 Annual Report to remove year-on-year fluctuations caused by very small customer variations under a single parent.

2 Revised from £24,400 in 2023/24 Annual Report to remove year-on-year fluctuations caused by very small customer variations under a single parent.

Why customers choose us

We strive to help our customers succeed in a world of

change. It’s about much more than using transformational

technology to achieve greater productivity though; we also

want to save them money, strengthen their systems and

secure their data as cyberattacks increase. Our customers

choose Bytes and Phoenix, and stay loyal to us, because:

• • We always act in their best interest. Rather than sell

the customer what we want, we provide what they need.

• • We understand them. Our people are experts in

technology. As importantly, they’re experts in their

customers, because we give them the time to really

understand each customer, and the customer’s industry.

• • Of our continuity and friendly, can-do culture.

Thanks to our relatively high staff retention rates, our

customers often deal with the same account manager

and team, year after year. We propose solutions to

problems and bring a positive attitude.

• • Of our commitment to excellence and honesty. We

always aim to exceed our customers’ expectations, but if

we don’t, or make a mistake, we’re honest about it, and

try to fix it quickly.

• • We support our communities. For many of our

customers, especially in the public sector, we go beyond

the scope of the project with social value offerings for the

benefit of local communities.

26 Bytes Technology Group plc

REVIEW OF THE YEAR

Why vendors partner with us

As an independent reseller, we’re impartial when making

recommendations to our customers. At the same time,

weconsider vendors to be our partners, and we work very

closely with them to deliver the best results for our

customers. Vendors choose to work with Bytes and

Phoenixbecause we:

• • Continually invest in training and development.

Thisenables us to promote our vendors’ products with

knowledge and skill. If we don’t have the right expertise

inour business, we hire people who do.

• • Act with integrity. We only commit to vendor

partnerships after doing due diligence and making sure

that we have the technical delivery capability, and the

market to make it worthwhile. We then deliver on time,

against the plan.

• • Collaborate. We host seminars and events that

bringtogether representatives of leading vendors,

strengthening our mutual understanding of the

challenges faced by customers, and the technologies

that can help.

• • Have a strong record of growth. Vendors know where

we’ve come from – and where we’re going – and want to

align with that.

Deepening our partnerships

withworld-leading vendors

Across BTG, we partner with more

than100 leading vendors who make or

distribute the IT products that we provide

to our customers. While some have been

with us for several decades, including our

biggest partner, Microsoft, others are

new companies working in cutting-edge

areas such as cybersecurity and AI.

In 2024/25 at Bytes, Microsoft was once

again the vendor that contributed most to

our growth. We also did more work with

Palo Alto Networks, Commvault and

Mimecast. At Phoenix, our Microsoft

business also continued to grow. We were

chosen as one of three partners globally

to pilot the new Windows 365 Link device,

which we see as having significant potential

for public sector frontline workers. We are

also the UK launch partner for the device

in 2025. Other vendors we did more with

included ServiceNow, VMware by

Broadcom, Rubrik and Pure Storage.

Our awards in 2024/25

Bytes

• • Sophos MDR Partner of the Year 2024 (UK&I)

• • CATO Networks Reseller of the Year 2024 (EMEA)

• • Palo Alto Networks and Exclusive Networks NetSec Partner

of the Year 2024

• • Check Point Infinity Partner of the Year 2024

• • Axonius Rising Star Award 2024 (EMEA)

Phoenix

• • Sophos Enterprise Partner of the Year 2024

• • Bitdefender Best Strategic Engagement Award 2024

• • Microsoft Global Education Partner of the Year Finalist 2024

• • Adobe Best Services Program 2024 (EMEA)

• • Druva International Partner of the Year 2024

Annual Report and Accounts 2024

STRATEGIC REPORT

Financial review

Income statement

Year ended

28 February 2025

£m

Year ended

29 February 2024

£m

Change

Gross invoiced income (GII) 2,099.8 1,823.0 15.2

GII split by product:

Software 2,005.3 1,722.0 16.5

Hardware 33.2 41.4 (19.8)

Services internal

34.0 31.5 7.9

Services external

27.3 28 .1 (2.8)

Netting adjustment (1,882.7) (1,616.0) 16.5

Revenue 217.1 207.0 4.9

Revenue split by product:

Software 146.0 130.4 12.0

Hardware 33.2 41.4 (19.8)

Services internal

34.0 31.5 7.9

Services external

3.9 3.7 5.4

Gross profit (GP) 163.3 145.8 12.0

GP/GII % 7.8% 8.0%

Administrative expenses (96.9) (89.1) 8.8

Administrative expenses split:

Employee costs (7 8.1) (71.2) 9.7

Other administrative expenses (18.8) (17.9) 5.0

Operating profit 66.4 56.7 17.1

Operating profit/GP % 40.7% 38.9%

Add back:

Share-based payments 5.1 5.7 (10.5)

Amortisation of acquired intangible assets 0.9 0.9 0.0

Adjusted operating profit (AOP) 72.4 63.3 14.4

Interest income 8.5 5.1 66.7

Finance costs (0.3) (0.4) (25.0)

Share of profit of associate

0.0 0.2 (100.0)

Profit before tax 74.6 61.6 21.1

Income tax expense (19.8) (14.7) 34.7

Effective tax rate 26.5% 23.9%

Profit after tax 54.8 46.9 16.8

1 Provision of services to customers using the Group’s own internal resources.

2 Provision of services to customers using third-party contractors.

3 Cloud Bridge Technologies, 25.1% share of profit of associate.

How we performed in 2024/25

28 Bytes Technology Group plc

REVIEW OF THE YEAR

Overview of 2024/25 results

We achieved another positive set of financial results, with a

15.2% increase in GII, a 12.0% rise in GP, a17.1% increase in

operating profit and more than 100% cashconversion.

We have doubled all these income metrics in our five years as a

listed entity, while sustaining more than 100% cash conversion over

this period and again this year, enabling us to distribute the majority

of these growing earnings to shareholders while maintaining a

strong balance sheet. Our track record of annual double-digit

gross profit growth now runs well over a decade.

Gross invoiced income

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 vendors invoice the customer directly and pay us

afee that is a percentage of their sales value, and that we

recognise within our GII, revenue and GP.

GII has increased by 15.2% year on year, exceeding £2 billion for

the first time to reach £2,099.8 million (2023/24: £1,823.0 million),

driven by software and with continued strong growth in the 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.

Revenue

Revenue is reported in accordance with IFRS 15, with hardware

and internal services GII reported gross (principal) and software

and external services GII reported net of cost (agent), which

means revenue reflects changes in the mix of business but is

often not a good indicator of underlying growth.

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) is 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.

Gross profit

GP, our primary measure of sales performance, has grown by

£17.5 million, up 12.0% year on year to £163.3 million (2023/24:

£145.8 million), with the second half of the financial year showing

strongly at more than 15% growth (compared to 9% in the first half).

Breaking this down by income stream, the Group’s two most strategic

focus areas have both achieved double-digit growth. Software

GP is up by 12.0% to £146.1 million (2023/24: £130.4 million),

and with only a very small decline in GP/GII percentage.

Thisachievement factors in the first two months of Microsoft

incentive changes, where we have implemented mitigation

plans to help offset the impact.

Internal services GP is up by 27.9% to £8.7 million (2023/24:

£6.8 million), 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.

Hardware GP declined by 6.1% to £4.6 million (2023/24:

£4.9 million), with strong growth in the second half of the

financial year offsetting a large decline in the first half.

We have seen good performances from both public and

corporate sectors, each contributing around half of the

£17.5 million 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 the second half of

the financial year after seeing lower growth in the first half, in part

driven by the weaker hardware performance during that period.

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.

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.

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

£17.5 million was £4.3 million 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 2023/24 customer numbers and average GP per customer have been revised from 5,978 and £24,400 in Annual Report and Accounts 2023/24 to remove year-on-year

fluctuations caused by very small customer variations under a single parent.

Annual Report and Accounts 2024

STRATEGIC REPORT

Financial review continued

Administrative expenses

This includes employee costs and other administrative

expenses, as set out below.

Employee costs

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.

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.

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.

Employee costs included in administrative expenses rose by

9.7% to £78.1 million (2023/24: £71.2 million). However, this

figure has been affected by:

• • A reduction in share-based payment charges of £0.6 million,

given our first three share option schemes issued post-IPO

have now vested and given that the cost of the new schemes

launched in 2023/24 and 2024/25 have been slightly lower

• • Capitalising £1.4 million 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.

Without the impact of these two items, the underlying increase

in our employee costs is 13.7%.

Other administrative expenses

Other administrative expenses increased by 5.0% to

£18.8 million (2023/24: £17.9 million), including continued

investment in staff welfare and internal systems.

Operating profit

Our operating profit increased by 17.1% from £56.7 million to

£66.4 million, which shows the balance we have achieved

between growing GP in a challenging market while effectively

managing our cost base.

Some of this increase has been positively affected by the

£1.4 million capitalisation of software developers’ staff costs

(previously expensed in the prior year when their work was

focused on maintaining legacy systems) and the £0.6 million

lower share-based payment charge noted earlier. After

adjusting for these, the increase remains strong at 13.4%.

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.

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 £0.3 million to £5.1 million 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 £0.9 million for the current and prior year. So, AOP is

no longer considered to add value to understanding our results.

We will now focus on operating profit, which brings us in line with

other similar businesses in our market segment.

For reference, our AOP has increased by 14.4% to £72.4 million

(2023/24: £63.3 million), and the ratio of AOP to GP has

increased from 43.4% to 44.3%.

Interest income and finance costs

This year has seen significant interest being earned from

money-market deposits, totalling £8.5 million (2023/24:

£5.1 million). 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.

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).

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 EV scheme.

30 Bytes Technology Group plc

REVIEW OF THE YEAR

Share of profit in associate

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

because Cloud Bridge’s set-up costs of investing in overseas

operations have offset its UK profits (2023/24: £0.2 million).

Profit before tax

The combined impact of increased operating profits and high

levels of interest received has seen our profit before tax

increase by 21.1% to £74.6 million (2023/24: £61.6 million).

Income tax expense

The £5.1 million (34.7%) rise in our income tax expense to

£19.8 million (2023/24: £14.7 million) 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. So, we expect our long-term effective tax rate to

align to the UK corporate tax rate, given the differences

between accounting profit and taxable profit are substantially

timing in nature.

Profit after tax

Profit after tax increased by 16.8% to £54.8 million (2023/24:

£46.9 million), underlining our growth in operating profit and

interest income, offset by the higher effective rate of tax.

Earnings per share

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.

Balance sheet and cash flow

Balance sheet

As at

28 February 2025

£m

As at

29 February 2024

£m

Investment in associate 3.2 3.2

Property plant and equipment 13.6 8.5

Intangible assets 43.5 40.6

Other non-current assets 3.4 4.9

Non-current assets 63.7 57. 2

Trade and other receivables 268.4 221.8

Cash 113.1 88.8

Contract assets 10.0 11.8

Current assets 391.5 322.4

Trade and other payables 327.5 27 7.9

Lease liabilities 0.7 0.4

Contract and tax liabilities 25.7 19.6

Current liabilities 353.9 2 97. 9

Lease liabilities 1.3 1.3

Other non-current liabilities 2.0 2.1

Non-current liabilities 3.3 3.4

Net assets 98.0 78.3

Share capital 2.4 2.4

Share premium 636.4 633.7

Share-based payment reserve 14.9 11.0

Merger reserve (644.4) (644.4)

Retained earnings 88.7 75.6

Total equity 98.0 78.3

Closing net assets stood at £98.0 million (29 February 2024:

£78.3 million), including the Group’s £3.2 million interest (25.1%)

in Cloud Bridge Technologies – which includes our £0.2 million

share of profits since we acquired it in April 2023.

The increase in the value of property, plant and equipment is

primarily attributable to the £5.1 million purchase of 27,000

square feet of office properties immediately adjacent to the

existing Group and Bytes 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.

Annual Report and Accounts 2024

STRATEGIC REPORT

Financial review continued

Intangible assets include the £3.7 million addition of capitalised

software development costs, a combination of internal staff

costs of £1.4 million and £2.3 million of external contractor

costs. As this work continues through the new financial year,

weexpect around a further £3 million 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.

Net current assets closed at £37.6 million (29 February 2024:

£24.5 million).

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 £1.7 million,

down from £2.5 million at the February 2024 year end, with

£0.7 million bad debts written off against the provision and

another £0.1 million 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 £2.1 billion.

The Group has paid its suppliers on schedule throughout the

year, with its average creditor days remaining broadly in line with

the prior year at 46 (2023/24: 47) and standing at 36 at the end

of the year (2023/24: 44).

The consolidated cash flow is set out below.

Cash flow

Year ended

28 February

2025

£m

Year ended

29 February

2024

£m

Cash generated from operations 85.6 67.3

Payments for fixed assets (6.4) (1.3)

Payments for intangible assets (3.7) (0.0)

Free cash flow 75.5 66.0

Net interest received 8.3 4.7

Taxes paid (18.9) (15.1)

Lease payments (0.6) (0.2)

Dividends (42.8) (36.6)

Issue of share capital 2.8 –

Investment in associate – (3.0)

Net increase in cash 24.3 15.8

Cash at the beginning of the period 88.8 73.0

Cash at the end of the period 113.1 88.8

Operating profit 66.4 56.7

Cash conversion

(againstoperating profit) 113.8% 116.4%

Cash conversion

(againstAOP) 104.3% 104.3%

Cash at the end of the period was £113.1 million (29 February 2024:

£88.8 million), which is after the payment of dividends totalling

£42.8 million during the period – being the final and special

dividends for 2023/24 and the interim dividend for 2024/25.

32 Bytes Technology Group plc

REVIEW OF THE YEAR

Cash flow from operations after payments for fixed and

intangible assets (free cash flow) generated a positive cash flow

of £75.5 million (2023/24: £66.0 million), 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 £8.8 million.

The Group’s cash conversion ratio for the year has historically

been measured as free cash flow divided by AOP but, in line with

other profit and efficiency measures, 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%.

The £2.8 million cash received from the issue of share capital

relates to participating staff exercising 711,000 share options,

primarily under our 2021 CSOP and SAYE (ShareSave) plans,

which vested in June 2024 and August 2024, respectively.

Thereis a corresponding increase in the share premium value

inthe balance sheet on page 31.

If required, the Group has access to a committed RCF of

£30 million 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.

Proposed dividends

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 £16.6 million.

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 buy-backs as

methods to return excess capital, preferring share buy-backs

when our shares are materially undervalued. In light of the

company’s continued strong performance and cash generation,

the Board considers it appropriate to propose a cash return to

ordinary shareholders with a special dividend of 10.0 pence per

share, equating to £24.1 million. 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.

Annual Report and Accounts 2024

STRATEGIC REPORT

Sustainability review

As a responsible business, we have a duty to everyone who works for us,

with us and around us. This philosophy is underpinned by our values which

in essence are about integrity, kindness and respect. We focus on doing

the right thing by our people, our communities and our planet.

What are you most proud of about

BTG’s work on sustainability this year?

The feedback from our carbon literacy

awareness programme has been really

positive, with people understanding

the ‘why’ we need to take action and

how this fits into their roles at work

and also in their personal lives.

Lisa Prickett

Group Sustainability Manager

2024 saw the launch of the Phoenix

Community Outreach Programme.

What’s been the highlight?

The programme saw us double

ourvolunteering, and provide

opportunities for students from

underrepresented groups across

theUK to be inspired by careers in IT.

Jennifer Clewley

ESG Lead, Phoenix

34 Bytes Technology Group plc

REVIEW OF THE YEAR

Our people

We strive to attract, engage and retain

employees, supporting them to build

fulfilling and rewarding careers in a fun

environment.

eNPS

Our headcount

rose by 18% to

1,24 5

Read more on pages

42 to 46.

Our Sustainability Framework

Our Sustainability Framework is published as a

separatedocument and is available at bytesplc.com.

We support all the UN Sustainable Development Goals, but

focus on the seven where we can have the most impact:

Photo at right: New solar panel installation at our

Phoenixoffices in Pocklington, Yorkshire.

*Backed by Renewable Energy Guarantees of Origin.

Annual Report and Accounts 2024

STRATEGIC REPORT

Sustainability review continued

Our people

Our talented people are integral to our success. We provide a supportive environment

that enables them to do fulfilling work and reach their potential, so they can enjoy long

and rewarding careers with us. In 2024/25, we continued to grow our teams across

the business, while increasing their skills and working hard to preserve our culture.

Expanding our teams,

maintaining our culture

Our strategy is based on growing our

customer base, and deepening our

customer relationships, every year. Given

our track record of growth, we need to be

constantly on the look-out for hiring new

people, but they must have the right skills

and attitude to support our customers in

line with our culture. Because we’re in a

highly innovative industry, this means

people with a passion for technology as

well as for customer service. And, to keep

pace with our industry, we must continually

develop the skills of all our people through

ongoing training.

In 2024/25, we increased our headcount

by 18%, to 1,245 at the end of the year, with

growth in all business areas, from sales to

operations and support staff. We see a

high level of competition when hiring for

high-skilled roles, particularly in AI. To help

us find the most suitable candidates, and

reduce money spent on agencies, both

businesses hired in-house recruitment

managers this year.

Headcount

Total at BTG

1,245

Our combined attrition rate of 14% at

Bytes and Phoenix was again well below

the industry average, a reflection of the

loyalty of our people, many of whom have

been with us for a long time. While we hire

at all levels, we have a strong commitment

to recruiting people at the start of their

careers, and nurturing and developing

their skills over time.

Apprenticeships are an important and

successful part of our efforts to develop

our talent from within. At Bytes, six

peopleparticipated in degree-level

apprenticeships this year, enabling them

to gain work experience while studying,

including one who achieved a first in their

specialist cloud solutions course. Read

more in our case study on page 15.

AtPhoenix, our new employees included five

technical apprentices and we took on 16

people under a sales training programme.

All our managers receive training on

howto onboard employees, and other

supportive measures include pairing

newhires with an experienced ‘buddy’,

introductory meetings with department

heads and directors, and checks by our

welfare managers.

One of our key priorities every year is to

preserve the culture that has brought us

so far. While we are not a small company

any more, we pride ourselves on

maintaining a ‘family’ culture. We actively

craft an inclusive and supportive

workplace, with several channels for

Two leading brands with the same values and culture

Our two businesses, Bytes and Phoenix, have 760 and 477 people, respectively.

We also have eight employees at BTG plc head office. The two businesses

operate autonomously, with their own identities, headquarters and management

teams, but have many commonalities. These include similar employment

policies, industry-leading knowledge and, most importantly, the same values

and culture. The businesses also look for opportunities to share good practice

and insights, for the benefit of BTG as a whole.

36 Bytes Technology Group plc

REVIEW OF THE YEAR

Enabling our employees

to save and invest in BTG

In August 2024, we saw the vesting

of our first ShareSave scheme,

launched in 2021, with participants

able to exercise their options and

become shareholders in BTG. At the

same time, we launched our fourth

ShareSave scheme, which was again

well received by our colleagues. More

than half of our people participate in

one or more of these plans.

Our values

• • Be passionate about our employees,

vendors and customers

• • Act with integrity at all times

• • Work together and collaborate

across teams

• • Be kind and respectful to all

people,all of the time

• • Get business done and have

fundoing it

people to safely raise concerns, including

the introduction of an anonymous reporting

tool. Phoenix published a ‘culture blueprint’

this year, based on staff input, which is

being used for training and to help new

starters understand what it means to

workthere. Besides quarterly ‘town hall’

meetings and talks from guest speakers

at both businesses, we engage with

colleagues across BTG through small

group meetings and surveys.

Recognising and rewarding

excellence

As a Living Wage employer, we pay

ourpeople fairly. We also reward high

achievers and people who go beyond

what’s expected to provide great service

to our customers and great support to

colleagues. Both sales and non-sales

staff are eligible for our employee

recognition programmes, which are

based on achieving business objectives.

Prizes in 2024/25 included ice skating at

Somerset House with dinner on the South

Bank, and a long weekend in Croatia. We

also offer awards for employees of the

month and people who are seen to be

‘living our values’ in all they do at work.

Ensuring we remain a great place

to work

One of the key performance indicators

weuse to monitor our success as an

employer is our eNPS, which measures

the likelihood of people recommending

their employer to others. Our eNPS of 57,

while still above the industry average, has

fallen from its previous high level of 71.

Wesee this as a reflection of a challenging

year, marked by a weak economy and

political uncertainty as well as necessary

transformation and structural changes in

our operations and leadership teams.

We also take part in annual Great Place

toWork surveys, to gain valuable insights

that help us create a culture of trust and

innovation. We continued to generate

good survey results this year, with 93% of

employees at Phoenix and 79% at Bytes

agreeing that they work at a ‘great place’,

compared to 54% of employees at a

typical UK-based company. Phoenix

wasranked 9th, and Bytes 85th, in the

UK’s Best Workplaces among large

organisations (201–1,000 employees),

while both businesses featured in the

Best Workplaces lists for wellbeing and

tech for 2024.

Annual Report and Accounts 2024

STRATEGIC REPORT

Sustainability review continued

Supporting wellbeing

We want our people to be happy and

healthy and we do all we can to support

this. We offer free or subsidised gym

plans at or near our offices, and

encourage staff to buy reduced-price

bicycles through our cycle-to-work

scheme. In our offices we provide free

fruit and healthy meal options.

We prioritise mental health, encouraging

openness and providing guidance and

support for anyone who needs it. We have a

24/7 employee assistance programme and

have designated wellbeing ambassadors

who are always available for a chat. This

year Bytes worked on developing new

policies to provide support to people who

are neurodivergent, while Phoenix hosted a

talk by the Samaritans, to raise awareness

about people who are struggling to cope.

Hybrid working does not suit everyone,

but we believe that, with the right

approach, it can make a real difference to

people’s wellbeing, which is something

we track in our Great Place to Work

survey. Our policy is that people whose

roles don’t require them to be in the office

all the time can spend around half of their

hours working remotely. This gives us and

our people the best of both worlds: the

benefits of collaboration, innovation and

social interaction in the office, alongside

the flexibility and positive work-life

balance from being at home. The high

scores in our Great Place to Work survey

tell us our approach is working, but we

monitor it constantly to ensure we

continue to get the balance right.

Developing our people to fulfil

their potential

We want our people to keep learning

andgrowing. All our employees have the

opportunity for support through a personal

development plan, and we constantly offer

opportunities for training, both mandatory

and non-mandatory. This benefits our

employees and our business, because we

can offer our customers greater expertise.

Vendors also provide training to our

employees, increasing their skills and

knowledge. This training is often linked to

accreditations that make us eligible for

public sector frameworks and for bigger

rebates from vendors.

An example of one of our new courses this

year was a coaching programme at Bytes

focusing on resilience, mainly for younger

staff and people changing roles, which

was well received. We also delivered

specialised managerial training, including

modules on interview techniques when

recruiting. At Phoenix, we continued our

leadership coaching programme for all

new managers, and ran a shadowing

scheme, where people could request

toshadow a colleague in another area

ofthe business for half a day, to learn

about their job.

38 Bytes Technology Group plc

REVIEW OF THE YEAR

Aiming for greater diversity

A number of companies have been pulling

back on their commitment to the diversity,

equity and inclusion agenda. But we

remain unshaken in our belief that we

must provide equal opportunities to all,

regardless of gender and ethnicity and

that, as a business, we benefit from

diversity of thought and from reflecting

the society we operate in.

We have made good progress towards

gender parity in recent years. Women in

senior leadership positions can serve as

strong role models for other women

progressing in their careers, and our CEO,

Sam Mudd, and the MD of Phoenix, Clare

Metcalfe, are great examples of this. At

Bytes and Phoenix, women represent

30% of managers, and around 40% of our

total workforce. While we still have some

way to go, we are proud of our efforts –

across the UK, less than a third of people

in the technology sector are women. At

Board level, 57% of our members are

women. Our progress was recognised in

the FTSE Women Leaders Review 2024

report, which named BTG as the most

improved FTSE 250 company in the

‘Women on Boards’ category.

To encourage more women to enter the

technology sector, we work with local

schools (read more on page 40) and

attend events that promote women in IT.

Though progress has been slower with

ethnicity than with gender, we’re doing

our best to become more ethnically

diverse too. While our workforce has a

higher proportion of people from a White

British background than the UK as a

whole, it reflects the demographics of our

main office locations, in Surrey and East

Yorkshire. We’ve continued to collect data

on our ethnicity breakdown, based on

voluntary self-reporting from our

employees, and we aim to be able to

report on this in the next financial year.

BTG gender balance

as at 28 February 2025

Women Men

57%

43%

Board

50%

Executive Committee

30%

70%

Managers

40%

60%

All colleagues

33%

67%

Executive Committee plus

direct reports

134

496

749

1 The Executive Committee and their direct

reports include executive directors, our

managing directors and their direct reports,

comprising individuals for whom they have direct

line management responsibility, but excluding

administrative and support roles.

2 Managers refers to leaders in BTG including

Executive Committee and senior leadership

members.

Percentage

of women at

Board level

57%

Annual Report and Accounts 2024

STRATEGIC REPORT

Sustainability review continued

Our communities

We are proud of our people’s passion for making a

difference in the communities in which we work.

In line with our goal of supporting social

causes, we have a long track record of

volunteering our time. This enriches our

local areas and builds the reputation of our

businesses. And, for our employees, it is

enjoyable and rewarding and enhances

their wellbeing. As a business, we also

contribute financially in various ways

tosupport positive change in our

environment and in the communities

around us.

Helping our people give back

Volunteering is central to our community

work, which is why we give all our

employees one fully paid volunteering day

a year to help their chosen causes. Many

of them take this opportunity, freely giving

their time and skills to do a wide array of

rewarding work, while also getting to

know each other a bit better.

In 2024/25, our people at Bytes continued

to support The Wildlife Aid Foundation,

ananimal charity close to our office in

Surrey, by helping transform a piece

ofland that they recently purchased.

Volunteers also helped out at the Rainbow

Trust, which provides emotional and

practical help to families who have a child

with a life-threatening or terminal illness,

Mid Surrey Mencap, which supports

adults with learning disabilities, and

Wimbledon Greyhound Welfare, devoted

to retired racing greyhounds.

At Phoenix, many colleagues volunteered

through our education outreach programme

(read more in the case study at right), and

also supported local organisations such

as Scouts, swimming and football clubs.

In total, BTG employees contributed

2,169hours to supporting our local

communities this year.

Inspiring and unlocking IT opportunities

foryoungpeople

One of the initiatives we enjoy most at Phoenix is working with young people.

Weramped up our education outreach programme this year, engaging with

more than 11,000 school children and young adults – 11 times more than our

goal. This included students with special educational needs and girls-only

activities. The outreach programme is designed to unlock opportunities and

foster economic empowerment by inspiring students to consider careers in

technology and to take IT as a GCSE subject.

As a STEM Ambassadors Partner and a member of the National Cyber Security

Centre’s CyberFirst programme, we were invited to deliver activities for schools

across the country, from London to Manchester and Sunderland to Stirling,

giving career talks and running interactive sessions where students could try

their hand at repairing laptops and experimenting with Microsoft HoloLens

mixed-reality headsets.

Thank you so much for organising this morning’s event, it was

outstanding. The varied format engaged my S4s from start to finish

and they have all taken away invaluable advice and experience and

will remember this opportunity for a long time to come.

Teacher

Alva Academy, Scotland

I thoroughly enjoy volunteering and giving back to the local and

surrounding communities because I get great pleasure in helping

young people get into tech. Young girls at school often don’t think

about STEM careers and these activities, supported by Phoenix,

give them the opportunity to see it’s not a scary place to work.

Emily Jones

Business and Test Analyst, Phoenix

Case study

40 Bytes Technology Group plc

REVIEW OF THE YEAR

Fundraising and donating to

goodcauses

Through our people, and as a business,

we raise and donate money to charities

and institutions that can use it to help

others. At Phoenix this year we held a staff

survey to choose one local charity to build

a long-term relationship with, so we can

maximise our impact. We chose a

wonderful independent charity we’ve

supported in recent years: St Leonard’s

Hospice, York, which provides specialist

palliative care, and supports local people

with life-limiting illnesses.

This year, we raised more than £14,000

for St Leonard’s, as well as other charities

such as Macmillan Cancer Support and

Oscar’s Paediatric Brain Tumour Charity.

Fundraising activities included entering

several teams to run the Yorkshire

Marathon relay race, a golf day,

sponsorship of events, a ‘community

celebration’ featuring pub games and

food and drinks vans, and selling a

Phoenix recipe book featuring employee

recipes. We also supported local food

and clothes banks.

Our people often raise money in their

owntime, and we support their efforts.

AtBytes, we match fundraising pound

forpound up to £1,000 per employee per

event. In this way, we donated more than

£12,000 in matched funding to a long

listof charities chosen by our people,

including Cancer Research, Macmillan

Cancer Support, St Catherine’s Hospice

and the Alzheimer’s Society.

As a business, Bytes directly supports

good causes, and we focused mainly on

one charity this year: the Royal Hospital

for Neuro-disability, which treated and

supported a long-standing member of

ourstaff. We encouraged colleagues to

participate in fundraising events including

the Three Peaks Challenge, which 14

people completed, and in total we raised

more than £10,000 for the hospital. We

supported Movember, Save the

Children’s Christmas Jumper Day and

The Giving Tree’s Christmas appeal,

donating more than 100 presents. And

wesponsored Leatherhead Cricket Club,

enabling them to improve their facilities

and develop their coaching programme.

Driving social value in our

communities

Most of Phoenix’s business is in the public

sector. With this comes a commitment to

deliver social value in the area where the

work is done. We take this responsibility

seriously and are pleased to be able to

use our expertise and resources to create

a more inclusive and equitable society.

As part of our efforts to drive skills and

social value in North East England, we

fostered a strong relationship with The

Beam, the dynamic city centre business

space in Sunderland where we opened

anoffice in 2024. In collaboration with

Sunderland City Council and Microsoft,

we launched TechHub at The Beam.

TechHub is a digital innovation space

where we help deliver workshops

andcourses for local businesses, the

voluntary sector and schools, increasing

the technology talent pool. These sessions

are aimed at people of all ages and

backgrounds, and range from entry-level

digital skills workshops to advanced

training sessions.

Clare Metcalfe (right) at the launch

of TechHub in Sunderland

14 Bytes people completed the Three Peaks Challenge,

raising money for good causes

Volunteering

hours at Bytes

and Phoenix

2 ,1 6 9

Annual Report and Accounts 2024

STRATEGIC REPORT

Sustainability review continued

Our planet

As a responsible business we believe that everyone has a

role to play in caring for our planet. We are reducing our GHG

emissions and helping our customers to do the same.

Making our

environmental

reporting more

accessible

To make it easier for readers

tofind the information they’re

looking for, we have made the

following changes to how we

report on climate issues.

Our planet

This section tells the story of our

impact on the planet, and how we

are performing against our targets.

Disclosure statements

This section includes:

• • Our reporting against the

TaskForce on Climate-related

Financial Disclosures (TCFD)

recommendations

• • A new ‘additional environmental

disclosures’ section that brings

together in one place detailed

environmental disclosures

andrelated methodologies.

See pages 57 to 74.

As a value-added IT reseller we don’t

manufacture or transport physical goods.

We have two large offices and several

smaller ones throughout the UK, but many

of our people work part of the week from

home under our hybrid working policy.

Aside from our carbon footprint, which is

modest given our size and sector, our

direct impact on wider environmental

issues such as biodiversity, water and

waste is therefore quite small.

This means that the positive effect we

canhave through our initiatives is limited,

because our own actions will only have

arelatively small impact on overall GHG

emissions. However, we are mindful of our

value chain and the impact from both our

suppliers and our customers. We must all

play our part, because if everybody does

what’s within their power, the overall

effect will be significant.

As our Scope 3 reporting shows (see

page 69), value-chain emissions are key

to our goal to get to net zero. This means

we need to work with our suppliers to

understand their emissions and carbon

reduction plans, so we can improve

ourcarbon data accuracy and use that

information to prioritise using low-carbon

technologies and working with vendors

that demonstrate the same commitment

we do. And although our own business-

related emissions areminimal, we can

make a positive contribution to a net zero

future by supporting our customers to

make moresustainable choices about IT.

The importance of collective action is

reflected in the increasing expectations

from all stakeholders, including regulators,

that businesses take responsibility for

minimising their own emissions. In the UK,

we anticipate regulation that will require

reporting on our net zero transition plan

and we are taking steps in the meantime

to assess how we will reach our net

zerogoal. We also report against the

recommendations of the TCFD, which

form part of the FCA’s UK Listing Rules.

In our TCFD scenario analyses (see pages

58 to 67), we did not identify a material

impact on our own business operations

from climate change. Nonetheless,

climate change istoo important for us

notto take firm action, which means

measuring our GHG emissions and finding

ways to reduce our impact. Doing so is

also expected of us bya wide range of

stakeholders, from investors to employees

and customers. We aim to reach net zero

emissions by 2040 at the latest, ten years

ahead of the UK’s goal of 2050.

Our science-based targets

By 2025/26 By 2028/29 By 2030/31 By 2040/41: Reach net zero

Reduce Scope 1

emissions by

50%

1, 2

Maintain our reduction

in Scope 2 emissions at

100%

1, 3

Reduce Scope 1

emissions by

60%

Reduce Scope 1

emissions by

90%

1 From a 2020/21 baseline.

2 This target is not validated by the SBTi because it was too short term in nature;

targets validated by the SBTi must be at least five years from submission.

3 In 2021/22 we exceeded our original Scope 2 target of reducing emissions by

50% by 2025/26. In 2022/23 we further reduced Scope 2 emissions to 100%

by ensuring that all our electricity came from Renewable Energy Guarantees of

Origin (REGO)-backed renewable sources.

4 From a 2022/23 baseline.

Reduce Scope 3

emissions by

50%

Maintain our reduction

in Scope 2 emissions at

100%

Reduce our Scope 3 emissions by

90%

42 Bytes Technology Group plc

REVIEW OF THE YEAR

SBTi validates

ourtargets

This year, our emissions targets

were validated by the Science

Based Targets initiative.

See bytesplc.com/

sustainability/our-planet

for full details

Validating our

science-based targets

In 2023/24 we submitted our GHG

emissions reduction targets to the

SBTi– the global organisation that helps

businesses set emissions reduction

targets in line with the Paris Agreement’s

goal of limiting the global temperature

rise to 1.5°C above pre-industrial levels to

avoid the worst effects of climate change.

In June 2024, the SBTi validated these

targets, namely our net zero target and

the near-term Scope 1, 2 and 3 targets

that will help us get there. We are now

working on our transition plan to guide our

path to reaching these goals.

Our emissions are calculated using

theGHG Protocol Corporate Standard.

Tocomply with the SBTi’s reporting

requirements, we amended our baseline

2022/23 and 2023/24 reporting of certain

emissions in Scope 3 categories. Well-to-

tank emissions that had been reported

incategory 3 (fuel and energy-related

activities) were moved into their specific

transport-related categories. We also

reviewed category 11 and were informed

of the optional requirement for ‘indirect

use-phase emissions’ and decided to

remove these from our reporting. As such,

we have updated our Scope 3 baseline

2022/23 and our 2023/24 emissions

(seeAdditional environmental disclosures

on pages 68 to 71 for more details).

Helping our people go green with electric vehicles

Dan Patching, Head of Licence Services at Bytes, had always been intrigued by

EVs, and also a bit sceptical. But after driving a plug-in hybrid as a courtesy car,

he found he loved the convenience of being able to charge it at home. So, when

it was time to trade in his old car, he decided to get an EV – with help from Bytes.

Dan needed a car with good range, enough space for a family of four – and their

dog – and at a price that matched his budget. Under the BTG EV scheme,

employees can lease a car from Octopus Energy and pay for it from their pre-tax

salary – saving them money and making owning an EV more affordable. After

discussions with an Octopus expert, Dan chose a ‘nearly new’ Volkswagen ID.4

GTX, allowing him to get an even higher-specification car than he had budgeted

for. He is delighted with the decision.

I have very quickly changed my opinion on EVs. Yes, longer

journeys need a little more thought. But the convenience and

reduced cost of charging at home, and knowing I am not driving

around polluting the air, is satisfying. I appreciate that Bytes has

made this benefit available to all employees, promoting sustainability

and getting all of us to think about our impact on the environment.

Dan Patching

Head of Licence Services at Bytes

Case study

Annual Report and Accounts 2024

STRATEGIC REPORT

Sustainability review continued

Our performance this year

Reaching net zero is a challenge for all

growing companies because, as we grow,

our absolute GHG emissions inevitably

increase, making it harder to reach

ourtargets. In our case, the growth of

ourcustomers’ use of GenAI is also

contributing to our emissions, since this

technology tends touse more energy.

Nonetheless, we remain focused on our

absolute reduction targets and our efforts

to achieve them. Overall, our emissions

increased this year through growth,

thepurchase of new buildings and the

challenges our vendors face to lower

emissions while delivering AI. We

exceeded our Scope 2 emissions target

early, having switched all our energy to

renewable sources in our owned offices

and introduced solar panels at our York

office. Our challenge isnow to maintain

Scope 2 reduction emissions at 100%

aswe grow, and bring the new buildings

under renewable energy contracts as

soon as possible.

We were particularly pleased that our

work was recognised externally, with CDP

increasing our rating from C to B, putting

us at the forefront of our industry, and our

ISS ESG Corporate Rating score improving

from C- to B-, putting us well into the top

decile for our industry. Phoenix submitted

its first disclosure to EcoVadis this year,

joining Bytes, which has submitted

disclosures to EcoVadis for a number

ofyears. EcoVadis assesses companies

across four pillars – environment, labour

and human rights, ethics, and sustainable

procurement – and our disclosure

hasbeen requested by several of our

customers. We were delighted that

Bytesreceived an improved score to

place it in the 92nd percentile (Silver

Medal), while Phoenix, in its first

submission, is in the 83rd percentile

(Bronze Medal). EcoVadis has defined

Bytes as a Carbon Management Leader,

its highest designation.

In-year challenges for Scope 1

Our Scope 1 emissions increased

significantly on last year. A small part

ofthis increase comes from estimating

heating-gas use in our new Leatherhead

buildings, but most comes from the

increased maintenance needed on

theageing heating, ventilation and

air-conditioning (HVAC) system at Bytes

House. In 2025 a new, more efficient

system will be installed, which is

expectedto reduce our emissions.

On target for Scope 2

We hit our 2025/26 Scope 2 target

early– four years ahead of schedule – and

continue to meet it. This year’s increase

from zero emissions to 5.3tCO

e comes

from estimating the electricity used in our

new Leatherhead buildings. These will

bebrought under the same renewable

energy contracts as our other buildings,

reducing emissions back to zero. So, we

are confident we will meet our 2028/29

target to maintain a 100% reduction.

Confident in our long-term

Scope3 targets

Because of our growth this year,

including the increase in take-up of

GenAI solutions, and changes to

methodology around the use of sold

products, our Scope 3 emissions

increased by 49%. This means we are

now at 98% compared to our 2022/23

baseline (see pages 68 to71). Some 93%

of our emissions come from purchased

goods and services, of which 80% are

from our top 13 vendors. If they meet their

stated emissions targets, then we should

also be able to meet our own.

We also helped our employees reduce

their emissions through our scheme that

allows them to buy EVs through salary

sacrifice. Since we rolled out the EV

scheme 2023/24 at Phoenix, and across

the whole Group in 2024/25, it has been

very successful, with 62 people using it to

buy an EV, including 26 this year alone (see

case study on page 43). We will continue

to promote the scheme in the coming year.

Working with our

customers to reduce

emissions

The biggest contribution we can

make to hastening the UK’s move to

a low-carbon economy is through

the software and technical solutions

we provide to our customers,

through our vendors and our

services. Aside from facilitating the

well-publicised move to online

meetings to reduce travel, we do

this by supporting customers in

moving their on-site servers,

products and services to the cloud.

This has the potential to be more

energy efficient than customers

each hosting datacentres

themselves, particularly where the

customer engages with us on a

FinOps and GreenOps service,

which optimises cloud infrastructure

and usage to reduce cost (FinOps)

and GHG emissions (GreenOps).

We can also, in an advisory capacity,

help customers factor sustainability

into their decision making.

External recognition

ofour progress

44 Bytes Technology Group plc

REVIEW OF THE YEAR

Carefully targeted use of

removaland offsetting

As we work to reduce our emissions, we

also want to support projects that remove

or avoid carbon production and provide

additional benefits to communities and

nature. We’re well aware of the challenges

inherent in carbon removal and offsetting,

so are very careful to ensure that the

programmes we invest in are backed by

recognised carbon standards.

To cover the value of our Scope 1 and 2

emissions, we have invested in carbon

removal credits for a mangrove restoration

project in Pakistan and a reforestation

project in Australia. These projects

support carbon sequestration, promote

biodiversity and have community benefits.

Each year we invest to cover the previous

year’s emissions, so were able to remove

97tCO

e for 2024/25. We will continue to

develop this programme, in line with our

net zero strategy, which mandates the use

of carbon removal credits to cover the

residual emissions – up to 10% of our

emissions – for areas where we cannot

remove the carbon from the activity, such

as air travel.

For Scope 3 (categories 2 to 8) we invest

in carbon avoidance credits through our

partner Ecologi – which also helps us find

the right carbon removal projects).

Ecologi supports Gold Standard and

Verra-approved carbon reduction, and

community- and biodiversity-enhancing

projects around the world. This year we

are backing global projects in forest

protection, peatland restoration and

fuel-efficient cookstoves.

New carbon literacy programme

raises our people’s awareness

Our path to net zero and the transition to a

low-carbon economy will require everyone

pulling in the same direction, and we see

education as the key. In 2024/25, for the

first time, we rolled out a carbon literacy

awareness programme. Its aim is to

increase employees’ understanding of the

causes and impacts of climate change,

and to explain our reporting requirements,

our GHG emissions targets and our plans

to get us there. This is essential because,

while we know our people are committed

to doing the right thing, it can be difficult

toknow what that is. The programme also

covers how people can reduce their own

personal carbon footprint.

By the end of the financial year, we had

held 11 in-person and one virtual carbon

literacy sessions across three offices for

staff at both Bytes and Phoenix. These

will continue in 2025/26, and we’ll be

adding more online sessions for people

who mainly work from home.

Improving our self-sufficiency through solar power

In April 2024, we were proud to

complete the installation of 264

solarpanels at our Phoenix office in

Pocklington. While BTG already gets

100% of its electricity from renewable

sources, producing our own solar

power increases our self-sufficiency

and enables us to export excess

energy to the grid for others to use.

Since the installation, we’ve produced

87,141kWh of our own energy, with the

majority being used by the business.

When sunny conditions peaked

inJune, we produced 50% of our

energy requirements. The solar panel

investment also enables us to provide

free on-site EV charging to our

customers, suppliers and employees.

Case study

Annual Report and Accounts 2024

STRATEGIC REPORT

Sustainability review continued

Our approach:

working collaboratively towards net zero

Looking ahead and

developingourtransition plan

Lisa Prickett, our Group Sustainability

Manager, oversees our GHG emissions

reduction efforts, coordinating the

approach across our two businesses,

Bytes and Phoenix. Lisa works with the

senior leadership team, our Sustainability

Steering Committee, the Board’s new

ESG Committee and the wider business to

coordinate our activities, ensure progress

against our targets and report performance.

Since reducing emissions is a collective

goal, we also work with others beyond

BTG. Lisa, a member of the Institute

forEnvironmental Management and

Assessment (IEMA), is also a member of

Now that our targets have been validated,

our focus in the coming year is to continue

the work we have been doing on

developing our net zero transition plan. In

addition to our energy audit submission

as part of the Energy Savings Opportunity

Scheme (ESOS) this year, we also fulfilled

the requirement to submit an action plan,

to be reported on annually. These audits,

which must be carried out every four

years, assess the energy used in our

buildings and transport. The action plan

builds on this and supports the creation of

our overall net zero transition plan.

Developing our plan involves working

closely with all areas of the business to

determine initiatives and build it in line

with overall business strategy and the

Transition Plan Taskforce’s (TPT)

framework. In addition to our own

the Sustainable Business Network,

whichsupports and empowers Surrey

businesses to adopt low-carbon

behaviours and operations. Jennifer

Clewley, Sustainability Lead at Phoenix,

ispart of a Scope 3 working group at the

Government Digital Sustainability Alliance

(GDSA). The GDSA brings together the

UK Government and its supply chain to

drive digital and ICT sustainability.

For full details of how we oversee and

manage environmental issues, see the

required disclosure in Task Force on

Climate-related Financial Disclosures

(TCFD) on pages 58 to 67.

activities, we will take account of the main

vendors in our supply chain, which are

responsible for most of our Scope 3

emissions, to understand how they are

reducing emissions. We are reassured

that most of the leading vendors,

including our biggest partner, Microsoft,

take sustainability very seriously, and

have a clear and well-publicised goal of

reaching net zero.

As we develop our transition plan, we will

keep working hard to reduce our own

emissions, as a business and as individuals.

We’ll also look more closely at the steps

we can take to support the health of our

planet, including promoting biodiversity

around our offices, something our people

already do through many of our charitable

programmes.

Embedding sustainable

practices

As part of our work to reduce

emissions, we build sustainability

into our decision making and enable

our people to make sustainable

choices every day. Aside from our

policies of hybrid working and

replacing unnecessary business

travel, we are:

Improving levels of carbon literacy

awareness across the business to

increase people’s understanding of the

importance of environmental issues

Enabling the transition to EVs by

offering electric cars through a salary

sacrifice scheme in partnership with

Octopus Energy

Encouraging greener forms of

commuting by setting up a car-sharing

network, promoting our cycle-to-work

scheme and offering selected free

buspasses

Encouraging efficiencies through infrared

sensors, reduced printing, a request

system for consumables and turning off

screens overnight. We’ve also installed

sensor taps (50–75% water saving) and

LED lighting in a recent refurbishment

Enabling increased recycling rates

through more than just the standard

recyclable items – for example, disposable

vapes, crisp packets and ink cartridges

Continuing to highlight the importance

of good environmental management

throughout BTG, including controlling

office heating and cooling in a

smartmanner

Accreditations

Bytes and Phoenix

certified to ISO 14001

CDP score of B

ISS ESG Corporate Rating score B-

(top decile)

ISS ESG quality scores:

– Environmental 1

– Governance 1

– Social 2

See our Sustainability Framework at

bytesplc.com for details.

46 Bytes Technology Group plc

REVIEW OF THE YEAR

Keeping a strong focus

on risk management

The challenging business environment in 2024/25

again highlighted the importance of maintaining a

strong, agile approach to managing risk.

Having closely monitored the risks to

theGroup, and the processes we have

inplace to manage them, we remain

confident that our enterprise risk

management framework continuesto

serve us well.

The geopolitical and macroeconomic

environment continued to be unsettled

this year. Russia’s war in Ukraine and the

conflict in the Middle East persisted,

contributing to interest rates remaining

higher for longer. Additionally, there were

important elections in several major

democracies, including the UK and the

US, which led to muted spending by

businesses and organisations as they

awaited the outcomes.

The resulting uncertain business

environment served to reinforce our

beliefthat risk management is an ongoing

process that needs reviewing through

theyear. The starting point is our risk

appetite, which was unchanged this year

as we maintained our cautious approach.

We identify and manage risk through our

enterprise risk management framework,

which we believe remains fit for purpose.

The Group’s bottom-up approach to risk

is evidenced by the inclusion of risk

management as a standing agenda item

at each of the subsidiary board meetings.

Following the governance issues we

experienced in 2023/24, we strengthened

our Board this year. After Sam Mudd was

confirmed as CEO in May 2024, we

appointed two new independent non-

executive directors to the Board: Ross

Paterson and Anna Vikström Persson.

Wealso established an ESG Committee

for the first time.

Managing new and

emergingrisks

We assess current and emerging risks

aspart of our ongoing risk monitoring

process. While we remain vigilant, we

take confidence from the resilience that

our business has shown through various

external crises in recent years.

In our previous 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:

• • Working capital, in line with the

heightened risk of economic

disruption because of the expanded

Middle East conflict

• • Direct and indirect cyberthreats,

because of evolving and elevated

global risk to IT security

• • Attract and retain staff while keeping

our culture, because of the scarcity of

suitable applicants and higher salary

expectations

• • Changes to vendors’ commercial

model, because of changes in certain

vendor programmes in 2024/25.

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, without significant

detriment to our profitability.

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.

We also identified three emerging risks in

our previous Annual Report: the physical

and transition risks related to 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.

Looking ahead

We continued our work with PwC as

internal audit partner and will do so again

in the coming year, because we believe

itadds significant value. Our robust risk

identification, management and agile

responses enabled us to weather the

challenging economic conditions this

year. While we will never be complacent,

we are confident that by continuing to

carefully manage our risks the Group

willremain resilient in 2025/26.

Andrew Holden

Chief Financial Officer

12 May 2025

Annual Report and Accounts 2024

STRATEGIC REPORT

Risk management

How we manage risk

BTG operates within the information and

communications technology sector in

theUK and Ireland. This means we

areexposed to the risks that financial,

political, regulatory, technological and

legal events might bring – risks that could

adversely affect how or whether we

achieve our strategic, operational,

compliance and reporting objectives.

Based on our enterprise risk management

framework, our approach to risk identifies

and addresses any potential barriers to

achieving our strategic objectives and

tomaking the most of opportunities for

competitive advantage.

Our approach

The purpose of enterprise risk management

is to achieve three key objectives:

• • Oversight – all critical risks are

identified across BTG, and managed

and monitored using a holistic

approach that is consistent with

ourapproved risk appetite

• • Ownership and responsibility – the

ownership of risk is assigned to individual

senior managers, who are responsible

for identifying, evaluating, mitigating

and reporting our risk exposure

• • Assurance – the Board, its committees,

BTG’s Executive Committee and

operational management have

reasonable assurance that we are

managing risk appropriately within

defined levels, and so that it brings

value to our organisation.

This enterprise risk management

framework is the foundation of our risk

management approach. It’s tailored to

suit the way we operate – from functional

management, up through our operating

company boards to Group level. It’s about

managing risk across the organisation

and enables us to deliver ourstrategy.

Our risk appetite

Our enterprise risk management

framework reflects our risk appetite,

which can be defined as cautious with a

low inclination for taking risks that may

result in significant disruption to the

Group’s operations. Our appetite shapes

how we make decisions about how best

tomanage each of our principal risks. We

carefully evaluate the level of operational

risk we are prepared to take.

BTG Board

Sets Group and operating

company risk tolerance and

sign-off levels

Owns Group risks, and those local

operating company risks best

managed centrally

Reviews risks using key

performance indicators and seeks

opportunities to reduce risk impacts

Audit Committee

Reviews Group and operating

company risks

Reviews effectiveness of risk

management frameworks

Ensures operating company risk

processes are aligned

Reviews decisions and KPI

objectives to ensure the Board

is controlling risks effectively

Internal review

Using control

standards to

measure risk

management

and control

effectiveness

Risk

framework

External review

Provides assurance and

counters any internal

bias in evaluating risk

management framework,

techniques and control

effectiveness

Operating

companies

Operating company boards

Ensure that risks are managed appropriately, in line with Groupguidance

Set operating company risk objectives, measure risk, authorise/support

change for risk control and own board-level risks

Operating company risk committees

Including Cybersecurity Management Forum, Information Security

Management Forum, Quality and Environment Forum, and Change Boards

Provide information and KPIs and ensure operational changes reflect risk

objectives and that corrective action is taken by owners

Operating company risk owners

Heads of department are responsible for ensuring risks are owned and

operated according to board direction and oversight

Internal experts

Provide expertise on risk

management, tolerance,

treatment and control;

deliver objective advice

toGroup and operating

companies; and ensure

training increases

knowledge and

understanding

Financial

risk

Strategic risk

Process and

systems risk

Operational

risk

Regulatory

risk

Our risk governance structure

48 Bytes Technology Group plc

REVIEW OF THE YEAR

We seek to minimise the risks from

unforeseen operational failures in our

business and have suitable mechanisms

in place to identify issues and take

necessary actions to minimise losses.

Day to day, our enterprise risk

management is about:

• • Identifying negative and positive

riskcircumstances

• • Assessing how likely or serious

thoserisks could be

• • Creating and monitoring a strategy

torespond to those risks

• • Creating value for our shareholders

and other stakeholders

• • Helping our businesses achieve their

objectives by proactively minimising

the risk in their business plans.

Our enterprise risk management framework

helps the Board to identify risks directly, to

own risks that are beyond the risk tolerance

of our operating companies, and to collate

a set of high-impact – or principal – risks

relevant to our whole Group. In identifying

risks, the Board is supported by our

executives and managers across our

business who are experts in their respective

areas – for example, our cybersecurity

specialists monitor cyberthreats.

BTG’s directors have committed the

organisation to a process of risk

management that is aligned to the

principles of the UK Corporate

Governance Code, the Committee of

Sponsoring Organizations of the

Treadway Commission and the ISO 31000

Integrated Enterprise Risk Management

Framework. Our risk methodologies are

also defined through continued research

and development, and are benchmarked

against international best practice.

Although, through the Audit Committee,

our Board has overall responsibility for risk

– including establishing and maintaining

our risk management framework and

internal control systems, and setting our

risk appetite – everyone at BTG plays a

part in protecting our business from risk

and making the most of our opportunities.

No matter how diligently we monitor our

environment or scrutinise sophisticated

global intelligence data, risks can appear

and accelerate with little or no warning. We

remain confident that the time, resources

and effort we have invested, and will

continue to invest, in managing risk have

prepared and equipped us to manage

threats effectively. We believe this means

we can provide our business, people and

customers with reasonable assurance of

staying secure, and so continue to benefit

from the opportunities in our sector.

Our three emerging risks

The emerging risks we identified in our

previous reporting – climate change,

keeping pace with social change, and the

impact of AI – continued to be relevant in

2024/25. Our Board manages and

monitors these risks closely, with

oversight from the Audit Committee.

Climate change

The physical and transition risks related to

climate change continue to be an area of

emerging risk, even though they are not

materially affecting our business in the

short to medium term (see Task Force on

Climate-related Financial Disclosures

(TCFD) on pages 58 to 67).

The physical impacts of climate change

are a potential risk to our people and

facilities, and to those of our customers

and suppliers. Climate change’s effects

on the economic landscape, technology

use and regulation could also be a threat.

While we’re working to reduce our

ownimpact on the climate, as a non-

manufacturing business one of the

greatest contributions we can make to

alleviating climate change is by supporting

our customers to use technology in a

sustainable way – particularly by optimising

their IT products and services in the cloud.

To increase our governance and oversight

of climate change and its related risks and

opportunities, we established a Board-

level ESG Committee in June 2024. This

additional layer of governance brings

independent oversight to our targets,

progress and strategy. During 2024/25,

as well as receiving validation from the

SBTi of our GHG emissions targets, we

submitted our second annual scoring

disclosure to CDP, receiving an improved

score of a B, compared to a C in 2023/24.

We also remain certified to the ISO 14001

environmental management system. Our

approach supports organisations that are

committed to working with sustainable

suppliers, in line with our strategy of

delivering high-net-value solutions.

In our TCFD-compliant disclosures on

pages 58 to 67, we review the latest

climate science using several scenarios to

understand our climate-related risks and

opportunities and the cost to the business

from these risks. None of these risks or

opportunities is considered material.

Keeping pace with social change

In 2022/23, we identified a second

emerging risk around social change,

which we again reviewed in the second

half of 2024/25 and still consider to be

emerging. Changing generational and

cultural attitudes could affect the way we

work and how we need to respond to our

people. To identify changes, we are

closely monitoring recruitment, attrition

rate and insights from staff.

Our customer and talent pool might be

limited if we are not seen as a progressive

organisation. People, particularly of a

younger age, are looking to engage with

companies that do the right thing when it

comes to being a responsible part of

society. As younger generations join the

workforce, we are starting to see changes

in expectations around work-life balance.

We have long identified that our staff need

more than just to be well paid: they need

opportunities to develop, flexibility in their

working arrangements and for the business

to feel like a cultural fit. We continue to take

steps to meet these expectations, and to

build on the actions already taken – such

as increasing wellbeing initiatives,

refurbishing office spaces to meet

employee needs, introducing Group-wide

personal development plans for all staff

and having regular employee feedback

opportunities. We listen regularly to our

employees through forums, portals and

anonymous routes, although we

encourage a culture of openness.

Generational changes have also brought

more open minds, particularly in relation

to gender, race, religion, sexual

orientation and a desire to treat everyone

equally – as well as to accommodating

and celebrating difference. We already

hold these values at our core, but need to

continually monitor and keep pace with

these changes. Not doing so could affect

our ability to attract and retain not only

employees but also customers, when they

too start to reflect new social values and

require their supply chain to do the same.

Annual Report and Accounts 2024

STRATEGIC REPORT

Risk management continued

Impact of AI

In 2023/24, we identified a third emerging

risk from AI and the impact this might have

on our customers and their employees.

We reviewed this again in February 2025.

We consider AI and machine learning an

opportunity for our business, as we expand

sales into areas such as Microsoft’s

Copilot and support our customers to

capitalise on this emerging technology.

However, as well as opportunities, AI

brings several inherent risks. These

potential risks come from moral, legal and

ethical issues, relating to the information

sources that the AI technology is trained

on and extracting data from – with its

possible copyright and other legal issues

– and the potential replacement of many

roles in the workplace in the longer term.

Within the Group, there are policies,

procedures and an AI ethics committee.

We will discuss and review policies and

the feedback from committees through

our approach to risk management as the

technology develops and its wider impact

better understood.

Currently, we are using AI within our

business, as are our customers, to

enhance productivity. There is no

indication that customers are reducing

their number of employees. However,

customers may choose not to recruit if

AIcan replace people, which could then

limit our growth because user numbers

become static or grow less rapidly.

GenAI may also present a cybersecurity risk

because, as it develops, the tool will allow

for more sophisticated impersonation,

such as deepfakes. These could be used

in several ways to cause financial and

reputational damage, including more

convincing phishing attacks or ‘fake’

videos conveying incorrect information.

We are developing our employees’

awareness of this risk through training

onsocial engineering and phishing.

There is uncertainty about how, where

and to what extent AI will affect society

too. So, we will continue to review the

risks and opportunities presented by

thisand other emerging technologies.

Summary of changes since 2023/24

1 Economic disruption

Noted UK budget changes to employer National Insurance, increased international

political uncertainty and trade tariffs, and potential public sector budget constraints.

2 Margin pressure

Made no changes.

3 Changes to vendors’ commercial model

At the half year, changed the status to ‘increase’.

4 Inflation

Updated risk with latest figures.

5 Working capital

At the half year, changed the status to ‘increase’. Noted upcoming UK Government

Procurement Act 2024.

6 Vendor concentration

At the half year, changed the status to ‘no change’. Noted impact from

marketplaces.

7 Competition

Noted impact from anti-competition regulations.

8 Relevance and emerging technology

Made no changes.

9 Cyberthreats – direct and indirect

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.

10 Business continuity failure

At the half year, added extra mitigation measures. Changed ownership to the CTOs

of our subsidiary companies.

11 Attract and retain staff while keeping our culture

At the half year, changed the status to ‘increase’, because of scarcity of suitable

applicants and salary expectations.

12 Supply chain management

At the half year, changed the status to ‘no change’, adding extra mitigation

measures. Also made small changes to operational measures.

13 Sustainability/ESG

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.

14 Regulatory and compliance

Made no changes.

Our principal risks and uncertainties

In 2024/25, the economic situation became more stable, but the uncertainty of the

geopolitical situation increased. Given we performed strongly and managed risks well

last year, we have maintained our three emerging and 14 principal risks, making only

some changes to the impacts and the status of the risk – that is, whether we consider

them likely to ‘increase’, ‘decrease’ or show ‘no change’.

50 Bytes Technology Group plc

REVIEW OF THE YEAR

Financial

1 Economic disruption

Risk owner CEO

The risk

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.

Internationally, there is political uncertainty with the new

USadministration. Imposing global tariffs for trade into the

US, resulting in reciprocal tariffs, could lead to inflation.

In addition, the conflicts in the Middle East and

Ukrainecontinue.

This risk also includes the uncertainties caused by global

economic pressures and geopolitical risk within the UK.

There is the potential for public sector funding to be cut,

although the size of this is still unknown.

How we manage it

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.

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.

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.

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.

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.

We will keep a watching brief on the impacts on the public

sector from any government cuts to funding or policy

changes, and how these affect the business.

The impact

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.

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.

2 Margin pressure

Risk owner MDs of subsidiary companies

The risk

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.

How we manage it

Profit margins are affected by many factors at customer

and micro levels.

We can control some of the factors that influence our

margins but some, such as economic and political factors,

are beyond our control.

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.

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.

This risk area is reviewed monthly.

The impact

These changes could have an impact on our business

performance and profitability.

Expectation of risk impact

Increase

No change

Decrease

Annual Report and Accounts 2024

STRATEGIC REPORT

Our principal risks and uncertainties continued

Financial

3 Changes to vendors’ commercial model

Risk owner CEO

The risk

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 change significantly.

How we manage it

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 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 (see Our strategy on page 9).

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.

The impact

These incentives are very valuable and contribute to our

operational profits. Significant changes to commercial

models could put pressure on our profitability.

4 Inflation

Risk owner CFO

The risk

Inflation in the UK, as measured by the Consumer Price Index

(CPI), was 3.2% in March 2024. At February 2025, this was

2.8%. This rate is above the Bank of England’s target of 2%.

The effects of both NI changes and global trade tariffs

areinflationary.

How we manage it

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 benefits packages to attract and

retain talent.

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.

The impact

Wage inflation and increased fuel and energy costs have

adirect impact on our underlying cost base.

If our competitors increase wages to a higher level,

thenwepotentially risk not retaining or attracting

employees andcustomers.

Our customers will also have increased costs, which will

change their budgets and spending priorities.

5 Working capital

Risk owner CFO

The risk

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.

The implementation of the UK Government’s Procurement

Act 2023 will affect the payment terms of public sector

customers and affect our supply chain.

Vendors’ changing payment terms could also have a

significant impact.

We have seen debtor days stabilise as inflation has

reduced, but the number of days is yet to return to

historically low levels.

How we manage it

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.

We have invested in larger credit collection teams and risk

management.

In the past financial year, BTG has seen a higher level of bad

debts and 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.

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.

The impact

This could adversely affect our businesses’ profitability

and/or cash flow.

52 Bytes Technology Group plc

REVIEW OF THE YEAR

Strategic

6 Vendor concentration

Risk owner CEO

The risk

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.

How we manage it

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.

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.

The impact

Relying too heavily on any one vendor could have an

adverse effect on our financial performance, should that

relationship break down.

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.

7 Competition

Risk owner CEO

The risk

Competition in the UK IT market, or the commoditisation of

IT products, may result in BTG being unable to win or

maintain market share.

Mergers and acquisitions have consolidated our

distribution network and absorbed specialist services

companies. This has caused overlap with our own offerings.

A move to more direct vendor sales 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.

An increase in the use of marketplaces also heightens the

risk of more transactions going through the same route.

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.

AI risks becoming a partial competitor, if it becomes able to

provide accurate and beneficial licensing and infrastructure

advice direct to customers.

The regulatory environment will change the competitive

landscape too, as regulators look to decrease monopolies.

How we manage it

We closely watch commercial and technological

developments in our markets.

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.

Equally, vendors cannot engage with myriad organisations

globally without the sort of well-established network of

intermediaries that we have.

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.

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.

AI/machine learning has been identified as a new emerging

risk, so we will explore and monitor risks and opportunities

to our business.

Currently, there is no sign of any commoditisation that

would be a serious threat to our business model in the short

or medium term.

We are aware of the opportunities from regulatory changes

and partnerships to expand our vendor, solution and

services portfolio.

The impact

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.

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 sales 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.

Annual Report and Accounts 2024

STRATEGIC REPORT

Our principal risks and uncertainties continued

Strategic

8 Relevance and emerging technology

Risk owner CEO

The risk

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.

How we manage it

We stay relevant to our customers by:

փ Continuing to offer them expert advice and

innovativesolutions

փ Specialising in high-demand areas

փ Holding superior levels of certification

փ Maintaining our good reputation and helping clients

findthe right solutions in a complex, often confusing

ITmarketplace.

We defend our position by keeping abreast of new

technologies and the innovators who develop them.

Wedothis by 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.

We are giving more focus to customer communications

andmarketing, to increase brand awareness.

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.

The impact

Customers have a 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.

Processes and systems

9 Cyberthreats – direct and indirect

Risk owner CTOs of subsidiary companies

The risk

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.

How we manage it

We use intelligence-driven analysis, including research by

our internal digital forensics team and analysis generated

by threat intelligence systems to protect ourselves.

This work provides insights into vulnerable areas and the

effects of any breaches, which allow us to strengthen our

security controls.

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.

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.

We maintain ISO 27001, CE and CE+ (cyber essentials)

certifications to protect our and our customers’ data.

The impact

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.

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.

54 Bytes Technology Group plc

REVIEW OF THE YEAR

Operational

10 Business continuity failure

Risk owner CTOs of subsidiary companies

The risk

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.

How we manage it

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.

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.

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.

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 resilience is built into

employees’ skill sets.

The risk is also mitigated through policies and process

implementation, such as Phoenix achieving ISO 22301

certification and Bytes implementing an incident

management policy.

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 business continuity

plan testing.

The impact

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.

Major outages in systems that provide customer services

could limit customers’ ability to extract crucial information

from their systems or manage their software.

Increased automation means a heavier reliance on

technology. Although it can reduce human error, it can

alsopotentially increase our reliance on other vendors.

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.

11 Attract and retain staff while keeping our culture

Risk owner CEO

The risk

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.

Several factors are affecting this:

փ Salary and benefit expectations

փ BTG’s high rate of growth

փ Skills shortage in emerging, high-demand areas, such

as AI and machine learning

փ 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.

How we manage it

We continually strive to be the best company to work for

inour sector.

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.

We’ve organically grown and set up new geographical

offices, to attract local talent.

Maintaining our culture is important to retaining current

staff. BTG regularly engages with employees through

surveys, such as the eNPS and Great Place 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.

The impact

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.

We may also lose talented employees to competitors.

Annual Report and Accounts 2024

STRATEGIC REPORT

Our principal risks and uncertainties continued

Operational

12 Supply chain management

Risk owner CEO

The risk

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.

There is a risk to our business if we engage with suppliersthat:

փ Provide unethical working conditions and pay

փ Are involved in financial mismanagement and

unethicalbehaviour

փ Cause environmental damage

փ Operate in sanctioned regions.

How we manage it

Supplier set-up forms include questions to ask suppliers to

disclose information relating to compliance and adherence

to our supplier codes 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.

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.

The impact

The impact to the business is across multiple areas,

fromlegal, financial and reputational to ethical and

environmental.

Escalating conflicts could also affect our supply chain.

Regulatory

13 Sustainability/ESG

Risk owner Group Sustainability Manager

The risk

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, as regulations

are continually updated. Failure to do so would put the

Group at risk of financial penalties and reputational damage.

How we manage it

Our Board manages and monitors this risk closely, with

oversight from the ESG and Audit Committees.

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.

Our Sustainability Steering Committee enables decision

makers from across the Group to work towards a common

goal and report on challenges. In June 2024, we enhanced

the governance of ESG, by establishing a Board-level

ESGCommittee.

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.

The impact

Falling behind expectations or our peers may lead to

challenges around:

փ Legal compliance, such as adhering to global standards

փ Retaining customers, as they push to reduce emissions

փ Investor relations, such as meeting criteria for ESG funds

փ Attracting and retaining employees, as younger

generations seek to work for more purpose-driven

businesses.

14 Regulatory and compliance

Risk owner CEO

The risk

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.

How we manage it

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.

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.

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.

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.

The impact

Operational teams and processes face administrative

burdens and effects under rapidly changing regulations.

Failing to keep up with regulatory, reporting and

compliance changes could lead to fines, legal challenges

and reputational damage.

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.

56 Bytes Technology Group plc

REVIEW OF THE YEAR

Disclosure statements

58 Task Force on Climate-related

Financial Disclosures (TCFD)

68 Additional environmental

disclosures

72 Non-financial and sustainability

information statement

73 Viability statement

74 Section 172 statement

How did Bytes advance its

sustainability agenda this year?

We successfully launched our

keenly awaited EV scheme and,

aspart of our Leatherhead office

refurbishment, switched to LED

lighting, installed sensor taps and

implemented the auto-power down

of screens at night.

Mandi Nicholson

Sales Operations Director and ExCo ESG Lead, Bytes

Annual Report and Accounts 2024

STRATEGIC REPORT

Task Force on Climate-related

Financial Disclosures (TCFD)

We are committed to protecting the environment by reducing our

GHG emissions and helping our customers to do the same.

We are acutely aware of the impacts

thatclimate change could have on our

business and society – and of the related

risks businesses are exposed to through

their activities and supply chains.

Although TCFD has been disbanded and

its recommendations adopted into

broader IFRS S1 and S2 standards, the

UK has not yet formally adopted these.

We continue to report using the TCFD

recommendations, while also maintaining

our wider GHG emission reporting – see

Additional environmental disclosures on

pages 68 to 71 and Our planet on pages

42 to 46. Through its focus on climate

policy and regulation, the UK Government

has also made climate change a priority

for all businesses. This includes the

upcoming requirement to publish net zero

transition plans to support the UK’s

overall net zero target.

So, we have made some changes to

ourTCFD report this year by reporting on

the recommendations more strategically.

Our view is that the direct impact of climate

change on BTG will be relatively low, given

our primary business is in software, security

and cloud solutions, and IT services,

working with large software companies.

Unlike many companies in other sectors,

we do not have factories or facilities

outside the UK and, currently, consider the

impact of extreme weather events in the UK

to be relatively low. Staff and customers

are not always required to attend our

offices in person, and the hardware we

sell, although transported by third parties,

is a relatively small part of our business.

But, like all responsible companies, we

will continue to reduce our environmental

impacts and support the transition to a

low-carbon economy. Adapting to a

warmer world with more weather extremes

and understanding the actions and steps

our customers will be taking is the right

thing to do. This may bring us opportunities

too, as companies look to technology for

the systems and services they need to

manage transition risks and move to a

low-carbon economy.

Complying with TCFD

This is our fourth report against the

recommendations of TCFD, which we

expanded last year to incorporate the

requirements of the Companies (Strategic

Report) (Climate-related Financial

Disclosure) Regulations 2022 – which

itself aligns with the recommendations

ofTCFD.

We have again complied with all 11 areas

of TCFD and summarised this in the

following table. To avoid repetition,

wehave cross-referenced to relevant

information elsewhere in this Annual

Report – particularly in Our planet on

pages 42 to 46 and in Additional

environmental disclosures on pages

68to71, which should both be read

inconjunction with this TCFD report.

58 Bytes Technology Group plc

DISCLOSURE STATEMENTS

TCFD recommendation Compliance and cross reference Comments/next steps

Governance see pages 60 to 61

a. Describe the board’s oversight of

climate-related risks and opportunities.

Fully compliant – see page 60 n/a

b. Describe management’s role in assessing

and managing climate-related risks and

opportunities.

Fully compliant – see pages 60 to 61 n/a

Strategy see pages 62 to 67

a. Describe the climate-related risks

andopportunities the organisation

hasidentified over the short, medium

and long term.

Fully compliant – see pages 64 to 67 n/a

b. Describe the impact of climate-related

risks and opportunities on the

organisation’s businesses, strategy

andfinancial planning.

Fully compliant – see pages 63 to 67 n/a

c. Describe the resilience of the

organisation’s strategy, taking

intoconsideration different

climate-related scenarios,

including a 2°C or lower scenario.

Fully compliant – see pages 62 to 67 n/a

Risk management see pages 60 to 61

a. Describe the organisation’s

processesfor identifying and

assessingclimate-related risks.

Fully compliant – see pages 60 to 61 n/a

b. Describe the organisation’s processes

for managing climate-related risks.

Fully compliant – see pages 60 to 61 n/a

c. Describe how processes for identifying,

assessing and managing climate-related

risks are integrated into the organisation’s

overall risk management.

Fully compliant – see pages 60 to 61 n/a

Metrics and targets see pages 42, 68 to 70, 120 and 129

a. Disclose the metrics used by the

organisation to assess climate-related

risks and opportunities in line with its

strategy and risk management process.

Fully compliant – see pages 42, 120

and129

n/a

b. Disclose Scope 1, Scope 2 and, if

appropriate, Scope 3 greenhouse gas

emissions and the related risks.

Fully compliant – see pages 68 to 70 n/a

c. Describe the targets used by the

organisation to manage climate-related

risks and opportunities and performance

against targets.

Fully compliant – see pages 68 to 70

and120

n/a

Annual Report and Accounts 2024

STRATEGIC REPORT

Task Force on Climate-related Financial Disclosures (TCFD) continued

Focused oversight at Board level

Our Board is responsible and accountable

for sustainability, including the achievement

of our environmental targets and for

overseeing climate-related risks and

opportunities. This is outlined within our

Sustainability Framework (available at

bytesplc.com/sustainability) which

outlines our sustainability reporting

methodology. TheBoard receives

relevant performance information from

the ESG Committee, which meets three

times a year, including on progress

against targets, significant actions taken

and any changes to risk. Any material

matters are discussed and actions

identified, as necessary.

Sustainability strategies may also be

discussed at the annual budget meeting

to review any material projects with

capital expenditure, such as on-site

renewable energy generation projects.

Aspart of our enterprise risk management

framework, our principal and emerging

Group risks, and any changes to these,

are also presented to the Board twice a

year for approval.

The Board delegates the authority for

delivering the risk framework to the Audit

Committee, which formally reviews our risk

performance twice a year. The committee

also receives Group risk updates for

review. Since 2022/23, the Audit

Committee has included climate-related

risks as a standing item on its agenda.

Since June 2024, our new Board-level

ESG Committee has increased the scrutiny

of our climate-related activities, monitoring

how we implement BTG’s ESG and

sustainability strategy. During the year, the

ESG Committee was briefed on our new

ESG Strategy and Environmental Policy,

and on the progress of our sustainability

initiatives and climate-related risks

andopportunities. The committee also

received standing updates on emerging

external trends and developments, and

stakeholder expectations around

commitments to net zero.

Governance and risk management

Given the importance of climate change, and that the issues are evolving constantly,

weoversee climate change at the highest level of the Group. Our governance structure

ensures we factor climate-related issues into our thinking throughout the business, while

our overall enterprise risk management framework integrates climate assessments and

sets out our risk management process for climate-related risks. Read more in our Risk

report on pages 47 to 56.

This year we have merged our reporting of climate-related governance and

riskmanagement, given that both are integral to the work of our Board and

ExecutiveCommittee.

The Board

• • Overall responsibility for the effective delivery of our sustainability targets

• • Considers reports from the ESG Committee

• • Our CFO is BTG’s executive director for sustainability

• • The Board, with senior leadership, also oversees governance aspects of ESG

ESG Committee

• • Reviews progress against sustainability targets

• • Monitors the changing regulatory requirements and trends in ESG

• • Reviews climate-related risks and opportunities

• • Considers sustainability as part of our engagement with stakeholders

Sustainability Steering Committee

• • Members drawn from senior leadership and across the business

• • Considers progress against targets and assesses operations from

asustainabilityviewpoint

Operational teams

• • Champion practical environmental and social activity, including volunteering

• • Raise awareness of local social and environmental issues

Executive Committee, management and Group Sustainability Manager

• • Operational management of environmental targets and stakeholder engagement

• • Review and monitor climate-related risks and opportunities

60 Bytes Technology Group plc

DISCLOSURE STATEMENTS

Responsibility and management

at executive level

Beyond the Board, we have a tiered chain of

responsibility within the business for driving,

embedding and monitoring our approach to

environmental issues, including considering

the potential effectsof climate change.

Our Executive Committee is responsible

for the delivery of our environmental

targets, and reviews and monitors

climate-related risks and opportunities,

reporting to the Board. Our CFO is the

executive director responsible for

overseeing climate-related activities and,

working with our Group Sustainability

Manager and the MDs of our operations,

leads thedevelopment of our climate

change policies. Our CFO is also

responsible foroverseeing climate-related

financial activities and reporting, including

sponsoring the Sustainability Steering

Committee and the Group risk forum.

Theforum comprises senior colleagues

from across our governance, sustainability,

risk management and finance functions.

The Executive Committee also receives

Group risk updates for review, in line with

our risk review cycle. Our CFO oversees

the implementation of our enterprise risk

management framework, and compliance

with it across the Group. Risk management,

which includes a review of climate-related

risks together with other risks faced by the

business, is a standing item on the agenda

of our Executive Committee meetings.

Formal feedback on risk management is

also integral to our operating company

board meetings, so reviewing climate risk

forms part of Bytes’s and Phoenix’s board

agendas – see the risk management section

of our Risk report on pages 48 to 56. This

ensures accountability at each level for

identifying, monitoring and proactively

managing risk and compliance issues.

Delivering at an operational level

At an operational level, we have our

Sustainability Steering Committee, which

aims to meet quarterly, but at least twice

ayear. It discusses the impact of climate

change and ensures we integrate

environmental issues into our strategic

planning. The Group Sustainability

Manager keeps up to date with the latest

science and regulations and works with

other members of the committee to

understand the implications of the

potential risks across thebusiness. As

well as the Group Sustainability Manager,

the committee includes our CFO and

other members of senior leadership, plus

colleagues with relevant functional roles

or who have a particular interest in this

area. Our CFO reports on the committee’s

work, the progress of our environmental

initiatives, and our risks and opportunities

to the Executive Committee.

We also have staff-led teams at operational

level, which promote initiatives, raise

awareness of the importance of

environmental issues and carry out local

activity. These teams form an important

part of our collective efforts and report into

our Sustainability SteeringCommittee.

Our business processes ensure that

thepolicies, procedures and control

environment set by the Board, and our

commitments on topics such as climate

risk, are understood and adhered to

across BTG. The factors we consider when

drafting policies and procedures include

regulatory requirements, reputational and

physical risks, and opportunities to advise

our customers onsustainable technology

solutions. Theevaluation criteria

includerelevance to our industry and

sustainability, regulatory and legal risks,

financial implications and the areas of

ourbusinessthat might be affected.

We manage our environmental impacts

through the framework of the ISO 14001

environmental management system.

ISO14001 requires that risks and

opportunities be identified, and

processes put in place to mitigate and

manage them. Both Bytes and Phoenix

are certified to ISO 14001. For more about

our principal risks and how we manage

and mitigate them, see pages 47to 56.

Our climate-related risk process

Risk identification

We identify risks at any level of the business, with climate-related risks channelled through either the

Sustainability Steering Committee (bottom up) or the ESG Committee and our executives (top down).

TheGroup Sustainability Manager stays informed about climate science and regulatory changes, raising

anypotential risks identified through these forums.

Risk assessment

We then discuss any identified risks at ESG Committee, Sustainability Steering Committee and Group risk

review meetings. These forums comprise individuals with wide-ranging knowledge of the business and its

operations and who are well placed to interpret the impact of the risk on different areas. The risk impact is

then measured against the chosen climate scenarios, and a financial impact estimated.

Risk management

If a risk is considered to have a potentially material impact, we will add it to the Group’s risk register as

eitheran emerging or a principal risk. Such risks will be managed through our enterprise risk management

framework. If a risk is considered immaterial, it will be added to the climate-related risk assessment and be

reviewed annually, with Board oversight. If a risk changes from immaterial to material, or vice versa, it will

move to the appropriate channels and be managed accordingly. We will also consider mitigating actions

andalignment with strategy, depending on the risk impact.

Annual Report and Accounts 2024

STRATEGIC REPORT

Task Force on Climate-related Financial Disclosures (TCFD) continued

Strategy

Our strategy is to grow organically by

doing more with existing customers and

winning new ones. But we also want to

grow while minimising our impact on the

environment, which is why our focus on

achieving net zero by 2040 matters, since

it enshrines that aim into our strategic

plans. Depending on how the effects of

climate change materialise, there could

also be opportunities for us as more

customers look to technology to reduce

or mitigate its impacts.

The Board is supported by our CEO,

CFOand other senior leaders in ensuring

that sustainability remains core to our

strategy. Forming the ESG Committee,

meanwhile, has added another level

ofoversight to how we manage our

climate-related risks and opportunities.

Analysing our climate-related

risks and opportunities

In 2024/25, we reviewed the latest

outputfrom organisations such as the

Intergovernmental Panel on Climate

Change (IPCC), reassessed our climate-

related risks and opportunities alongside

the TCFD recommendations, and

conducted scenario and financial

analyses and a financial risk assessment.

Scenario methodology

To incorporate the most realistic changes

in temperature for the UK, where the

Group’s operations are located, we have

selected three scenarios: two scenarios

of 2°C or below of global warming above

pre-industrial levels and one scenario of

3°C. Our analyses covered physical risks

(acute and chronic threats relating to

extreme weather) and transition risks

(such as financial, political, social and

reputational factors), which could have a

negative impact on our business, supply

chain and employees.

Given the differences between physical and

transition risks, two different mechanisms

have been used for the scenarios. For

physical risk scenarios, we have selected

three relevant categories from the eight

identified in the IPCC AR6 Categories from

Working Group III (IPCC AR6 WGIII). These

eight categories range from C1 (>50%

chance of limiting warming to 1.5°C with no

or limited overshoot) to C8 (>50% chance

of global warming exceeding 4°C). BTG

has chosen to use C1, C3 and C6, as

detailed in the physical risk scenarios

table below. For transition risks, we have

chosen to use the International Energy

Agency (IEA) World Energy Outlook 2024

scenarios, which relate to global energy

policy decisions and the adherence to

these. These range across three different

trajectories, as detailed in the transition

risk scenarios table below.

Physical risk scenarios

Group notation IPCC AR6 WGIII category Description

Low C1 Limit warming to 1.5°C (>50%) with no or limited overshoot

Medium C3 Limit warming to 2°C (>67%)

High C6 Limit warming to 3°C (>50%)

Transition risk scenarios

Group notation IEA Description

NZE Net Zero Emissions

by 2050 Scenario (NZE)

This scenario portrays a pathway in which the energy sector

achieves net zero carbon dioxide (CO

) emissions globally by

2050, in line with limiting the long-term global average

temperature to 1.5°C, along with achieving universal energy

access by 2030 and air quality objectives.

APS Announced Pledges Scenario

(APS)

This scenario outlines a trajectory for the energy sector if all

national energy and climate pledges, including long-term net

zero emissions goals, are met on time and in full.

STEPS Stated Policies Scenario

(STEPS)

This scenario provides a sense of the prevailing direction of

travel for the energy system, based on a detailed assessment

of current policy settings.

1 From the IEA World Energy Outlook 2024.

62 Bytes Technology Group plc

DISCLOSURE STATEMENTS

We considered these risk scenarios over

a broad timeframe, from 2024/25:

• • Short term: one to three years – the

depreciation of the majority of our IT

assets, which reflects the length of our

typical customer software contracts

• • Medium term: three to ten years –

incorporating 2030, the target date

forour main emissions goal

• • Long term: ten to 25 years – which

covers our net zero goal of 2040, and the

start of 2050, the UK’s net zero target.

Some risks may arise in the shorter term;

however, many of the effects of climate

change will arise in the longer term and so

come with an inherent level of uncertainty.

We have identified those – and potential

opportunities – most likely to affect BTG,

as set out in the tables on pages 64 to 67.

The magnitude of our climate-related

risks and opportunities not only depends

on the physical impacts on our business

operations, but is also shaped by

regulatory developments in our markets,

our goal to reduce our GHG emissions,

and our efforts to understand and shape

aculture of climate action.

We acknowledge that some physical risks

will be present well below the 2°C

threshold but, given these risks are

largely immaterial to our business, we

have deemed them to be a minor financial

risk – except for under the C6 scenario,

where more extreme weather events and

heating might require capital investment.

We have confidence that the business

would be resilient against the physical

risks of climate change under the

scenarios assessed. We will, though,

continue to monitor the potential impact

of increases in global temperatures and

adapt our analyses as necessary.

Overall, our analyses showed no

immediate material risks that would

affectour strategy or performance, so

concluded that climate change remains

an emerging risk for BTG. However, as the

analyses demonstrate, the transition risk

that suggests a moderate financial impact

is about staying aligned with stakeholders’

expectations and regulation relating to

climate change. In 2022/23, we elevated

the regulatory aspects of sustainability

toa principal risk. This principal risk

incorporates all aspects of sustainability

and, in particular, relates to predicted and

unforeseen future regulations, which may

assess areas we haven’t measured with

the same focus as climate, such as

biodiversity andsocial aspects of

sustainability. Thephysical risk (see page

49 in our Risk report for more details).

To analyse the materiality of the risks,

weused the same process and financial

impact categories to categorise the

climate risks as we do for principal risks.

We have made an assessment of the

potential financial cost/benefit for each

ofthose identified, which then dictates

the relevant materiality of each risk/

opportunity. The materiality of the risks

then informs whether the business needs

to consider the risk/opportunity in strategic

or financial planning. At present, the

materiality of the risks and opportunities

tothe business is considered low and our

resilience to risks high. The table above

shows these categories, which are also

referenced in the risks and opportunities

tables on pages 64 to 67.

Because developments this year have

notchanged our initial conclusions

around the nature of climate change, as

described earlier, we are confident that it

has had a limited effect on our accounting

judgements and estimates this year.

Wehave therefore determined that it has

had no material impact on our asset and

liability valuations at 28 February 2025.

Assurance from GHG emissions

targets validation

In June 2024, the SBTi validated our

near-term and net zero targets, creating

apathway for the work we need to do to

achieve these targets. For more details,

see Our planet on page 43.

Risks and opportunities

Estimated financial impact Risk category

<£2.5m Minor

£2.5m to £5m Moderate

£5m to £7.5m Material

£7.5 m+ Severe

Annual Report and Accounts 2024

STRATEGIC REPORT

Summary of our key climate-related risks

Risk

description

Risk

category

Potential

impact

Mitigation

actions

Scenario

andpotential

financial risk

Transition risks

Increased pricing of

carbon (or carbon-

intensive materials,

goods and services),

carbon reporting

obligations, regulation

ofproducts and services,

and exposure to litigation

Policy and

legal

The most likely effect of any

changes would be an increase

inoperating costs. For example,

reporting criteria could involve

additional time and expertise, or

amandatory reduction in GHG

emissions could require extra

capital expenditure. Failure to

comply with this risk, which is

relatively low, could result in

damage to our reputation and

possible regulatory fines in

certaininstances.

We have several internal groups

inplace to manage sustainability,

including the effects of climate

change on our business. We

continually monitor the regulatory

and legal environment and take

external advice as required. A large

percentage of our supply chain

iswith Microsoft, which has a ‘carbon

negative’ date of 2030. If itachieves

this, it will mitigate the majority of our

supply chain Scope 3 emissions from

2030 onwards. Wewill continue to

monitor our other vendors too,

including new ones, and will be

expanding our onboarding to include

information around their GHG

emissions and reduction targets.

NZE – minor

APS – minor

STEPS – minor

Changes in customer

working behaviour

andinfrastructure

requirements

Market The move away from full-time,

office-based working could

accelerate if climate change-related

extreme weather events routinely

made it difficult to reach centralised

workplaces. This could further

encourage employees to work from

home or at other non-office locations.

These changes could also mean that

customers no longer needed so

much of the hardware infrastructure

that we supply, such as desktop

computers and telephones.

However, hardware makes up less

than 2% of our business, and the

software side is unlikely to be

affected. So, the impact on us

would be relatively small and

potentially feeds into some of the

opportunities identified around

increased cloud computing.

Given this risk is relatively

insignificant, and within BTG’s risk

tolerance, we have not developed

formal mitigation plans.

NZE – minor

APS – minor

STEPS – minor

Substitution of existing

products and services

that we currently sell with

new technologies that

arenot in our portfolio

Technology On balance, we believe that most

ofthe software we sell would not

beaffected by this situation,

whichpresents both risks and

opportunities to BTG. If our

customers moved away from our

existing products and services,

andwe did not have relationships

with vendors that sold the new

in-demand products and services,

we would lose sales. However, if we

had built those relationships and

could offer those new products and

services, we would benefit from

additional revenue opportunities.

We analyse market trends to keep

up with changes in technology and

customer preferences and draw

onassistance and guidance from

external advisors as required.

Wealso have internal groups that

focus on managing sustainability,

including the effects of climate

change on our business.

NZE – minor

APS – minor

STEPS – minor

Short term: one to three years Medium term: three to ten years Long term: ten to 25 years

Task Force on Climate-related Financial Disclosures (TCFD) continued

64 Bytes Technology Group plc

DISCLOSURE STATEMENTS

Risk

description

Risk

category

Potential

impact

Mitigation

actions

Scenario

andpotential

financial risk

Transition risks continued

Concerned or negative

perceptions from

stakeholders that we

havenot responded

appropriately to

climatechange

Reputation Damage to our reputation could

affect all our stakeholders.

Investors increasingly have a

sustainability mandate – so a poor

or damaged reputation could

negatively affect our investment

case. Customers often include

asustainability score when

comparing suppliers. Reputational

damage would lower our score,

which, over time, would have a

negative impact on our revenue.

Our suppliers could also exert

pressure on us if our reputation

wastarnished. Any damage to our

reputation could also affect our

ability to attract and retain skilled

staff, who now look to employers for

more than just financial reward and

advancement opportunities.

We monitor our external reputation

through regular dialogue with our PR

agency and external advisors and

engagement with our institutional

investors, our vendors’ perception

through periodic reviews, our

customers’ views through our

customer NPS, and our people’s

views through our employee NPS

and through briefings from our

designated non-executive director

for employee engagement. We

monitor investor-focused scoring

through ISS, andact on areas

where we can improve. Public

disclosures through CDP and

EcoVadis enable us to understand

our position within our peer network

and enable engagement with

customers. Wealso create

opportunities for engagement with

all our stakeholders via our Annual

Report and Annual General

Meeting. We receive insights on our

performance from our internal

sustainability-focused groups. We

take account of the feedback from

these sources in the context of our

public commitments.

NZE – moderate

APS – moderate

STEPS – minor

Annual Report and Accounts 2024

STRATEGIC REPORT

Task Force on Climate-related Financial Disclosures (TCFD) continued

Risk

description

Risk

category

Potential

impact

Mitigation

actions

Scenario

andpotential

financial risk

Physical risks

Increase in extreme

weatherevents and

variable weather patterns

in the UK causing

disruption to energy

andrelated systems

Such physical risks could

make it difficult for our

people to get to work, or our

vendors and subcontractors

to deliver their products

andservices to us or our

customers because of

blocked roads or public

transport failure, for

example.

Acute/chronic Low-impact scenario (C1) will have

alimited impact on the business,

ascoastal inundation and localised

flooding is likely to be minimal.

Under medium- and high-impact

scenarios, this risk increases but is

dependent on tipping points, such

as that of the Greenland ice sheet,

which could increase sea levels.

However, none of our UK locations

is at high risk of flooding – although,

in extreme weather conditions,

commuting could be challenging.

Once-a-decade extreme events

(pre-industrial) will become more

frequent under each scenario as

warming increases. Periods of

extreme heat could affect

productivity and increase emissions

from officesthrough more frequent

use of air conditioning. Prolonged

heatwaves are still expected to be

limited in the UK under 2°C or lower

scenarios, with a relatively small

impact to the business and

energyuse.

Increased extreme weather could

affect power lines. With the ability to

work remotely and with employees

distributed across the UK, as well as

resilient cloud-based systems, the

impact to business activities and

productivity is considered limited.

Such physical risks could make it

difficult for our people to get to

work, however, or our vendors

andsubcontractors to deliver their

products andservices to us or our

customers because of blocked

roads or public transport failure,

forexample.

If extreme weather events affect

power lines, or flooding affects

travel to offices, mobile

connectivity and our network

access means that our staff could

work remotely during times of

power interruption to our offices.

Most of our IT requirements are

hosted in the cloud, so we have

limited physical connectivity to any

one site. We have alternative power

supply capabilities and multiple

vendors can provide additional

data connectivity, to serve locations

with on-site computing needs.

In a hotter climate and with more

frequent heatwaves, the office

environment would need to

maintain comfortable working

conditions for employees, which

iscurrently serviced through

theHVAC system. To manage

emissions, we would look to

usethe most efficient and least

polluting refrigerant gases and

explore alternative options to

ensure a comfortable working

environment, while also maintaining

carbon efficiency. This may include

increasing the number of solar

panels to provide more self-

generated power. In more extreme

scenarios, the UK may look to

amend working hours to a working

pattern similar to how more

southerly European countries

operate today.

Low (C1) – minor

Medium (C3)

– minor

High (C6)

– moderate

Supply chain disruption

from the physical impacts

of climate change

Global supply chains could be

affected by the locations of our

suppliers in more severely affected

parts of the globe and through

disruptions to distribution channels.

Issues are most likely to affect the

relatively small hardware and IT

services parts of BTG. Software,

which makes up 95.5% ofour

gross invoiced income, is unlikely

to be affected, but we willwork with

oursuppliers to understand their

climate change-related risks. We

perceive that the impact from this

will be fairly small, given our top-tier

suppliers will already be taking

steps to ensurethe sustainability

oftheirown businesses.

Low (C1) – minor

Medium (C3)

– moderate

High (C6)

– moderate

Short term: one to three years Medium term: three to ten years Long term: ten to 25 years

66 Bytes Technology Group plc

DISCLOSURE STATEMENTS

Summary of our key climate-related opportunities

Opportunity Description How we’re responding

Scenario and

potential financial risk

Expansion of

cloudproducts

andservices

The desire to be more sustainable

– and limit climate change – is

already encouraging organisations

to move their IT servers to the cloud.

This is likely to continue, and may

accelerate, as the climatechange-

related risks of accessibility and

physical damage prompt entities

tountether themselves from their

physicallocations.

Since we are specialists in cloud technology, this trend

would have positive effects on our sales. We already

actively promote the sustainability benefits of moving

tothe cloud, along with our expertise in this.

Under the more progressive scenarios, such as NZE,

our opportunity would be greater than under the slower

mechanisms – but there are several reasons for shifting

to the cloud, so this may continue increasing irrespective

of changes in jurisdictional climate policies.

NZE – minor

APS – minor

STEPS – minor

Demand for

resource

andenergy

efficiency

The growing demand for more

energy efficiency, and for lower

consumption of water and materials,

presents opportunities for us

because customers are likely to

need new technology to help them

identify, monitor and manage risk

and comply with regulation on

climate-related matters.

Factors linked to the drive for

low-carbon energy – such

aspolicy incentives, new

technologies, participation in

carbon markets and localised

energy generation – could present

more opportunities for us.

Given BTG’s established relationships with leading

vendors and our understanding of their software

offerings, we are well positioned to provide

appropriate solutions, as and when demand

increases. This could enhance our product

portfoliosleading to additional revenue streams.

Under the more progressive scenarios, customers

might be more likely to request information about

product sustainability, which could open up

opportunities for other services.

NZE – moderate

APS – moderate

STEPS – minor

Demand for

sustainable

hardware

Customers pursuing

renewableenergy programmes,

energy-efficiency measures

andresource replacements or

diversification may need new,

more sustainable hardware as

wellas associated software.

Although hardware sales are not our primary revenue

stream, we can advise customers on the most

environmentally friendly models, and this could

positively affect our revenue. We can also support

customers by advising on models that meet certain

certifications such as TCO, ePEAT or EnergyStar.

As with the ‘demand for resource and energy

efficiency’ opportunity, under more progressive

scenarios customers might be more likely to request

information about hardware sustainability, and this

could open up opportunities for other services.

NZE – minor

APS – minor

STEPS – minor

Keeping up with

socialchange

Companies with a market-leading

response to climate change could

attract new suppliers, customers,

investors, markets and assets.

Some public sector frameworks

already rate suppliers on their

sustainability credentials.

Being known for our sustainability

credentials could help us to

attractand retain talent. The

ITjobs market is extremely

competitive and increasing

ourheadcount is essential

forourgrowth.

We are raising our sustainability profile, for example

by having validated our emissions targets with the

SBTi, through public disclosures such asCDP and by

taking into account the expectations ofsustainability

ratings agencies with the aim of improving our scores.

We are also proactive about oursupport for the

environment and promote this toour employees.

Forexample, we have:

• • Employee-led sustainability committees

• • An employee EV and cycle-to-work programme

• • A carbon literacy awareness programme

• • Hybrid working (reducing commuting emissions)

• • Electric charging points in our staff car parks.

Under the various scenarios, STEPS would provide us

with the biggest opportunity to be leaders in our field.

Incomparison, however, it might be more difficult to

achieve our goals if government policy lags behind.

NZE – minor

APS – minor

STEPS – moderate

Annual Report and Accounts 2024

STRATEGIC REPORT

Additional environmental

disclosures

With the increased attention on environmental performance,

thisyear we’ve brought together in one place the environmental

disclosures we make in addition to our TCFD reporting.

This includes how we are meeting our GHG

emissions targets, so here we provide

detailed disclosures on our carbon

footprint (including our Scope 1, 2 and 3

GHG emissions), our Streamlined Energy

and Carbon Reporting (SECR) data, and

the related methodologies.

Changes to our

carbonaccounting

Since the start of 2022/23, we’ve worked

in partnership with a specialist GHG

emissions consultancy, which has helped

us to report on all Scope 3 categories

relevant to our business and to refine

these in 2024/25. We use the Greenhouse

Gas Protocol Corporate Accounting and

Reporting Standard as the methodology

for all our carbon reporting (see page 71).

Having comprehensive data has enabled

us to become far more sophisticated in our

analyses and reporting.

Scope 1 and 2 data year-on-year comparison

In July 2023, the Group submitted a

commitment letter to the SBTi to validate

our GHG reduction targets – and, in

December 2023, once our Scope 3

emissions had been fully calculated for

2022/23, we submitted our near-term

andnet zero targets. We reported on

thisexpanded Scope 3 work in last

year’sAnnual Report. From April to

June2024, theSBTi worked with us

toconfirm targets and emissions,

whichledto a few amendments in our

reporting. The main change was splitting

out how we report well-to-tank emissions

– from only in Scope 3, category 3, to

category 4 (upstream transportation and

distribution), category 6 (business travel)

and category 7 (employee commuting).

We were also advised that the software

component of our category 11 (use of

sold products) was optional under the

Greenhouse Gas Protocol. We decided to

remove this from our reporting from

2022/23 (Scope 3 baseline) onwards.

In December 2024, Bytes purchased

twobuildings next to our Leatherhead

head office. Although the offices are

currently leased out, under our chosen

organisational boundary the emissions

fall under Scope 1 and 2, as per the

Greenhouse Gas Protocol standards.

Theutility datafrom December 2024

tothe end of February 2025 are not yet

available, so wehave made estimates

based on the Leatherhead office usage

and our knowledge of the utilities in

theseoffices. During2025, we will

worktomeasure these emissions more

accurately and determine the impact

onour targets – and whether a re-

baselining or resubmission to the

SBTiisrequired forScope 1 and/or 2.

Our Scope 1 emissions for 2024/25

increased from 45.5tCO

e in the prior

year to 91.6tCO

e. Although an estimated

4.01tCO

e of this increase comes from

the new buildings, the majority comes

from failures in the ageing HVAC system

at the Leatherhead head office, which is

expected to be replaced in 2025.

Market-based Scope 2 emissions

increased on the prior year because of

estimated usage of the new buildings

purchased in December 2024. This will be

verified, and is expected to reduce as the

contracts are brought under the same

commitment as the head office and

REGO-backed electricity purchased.

Scope 1 Direct emissions from our sites

Scope 2 Market-based indirect emissions

from the energy we buy

Scope 2 50% reduction target set in 2020

2023/24

2022/23

2021/22

2020/21 2024/25 2025/26 2028/29

TargetsBaseline

2030/31 2040/41

Total tCO

100

235

54.5

62.1

73.2

45.5

91.6

233

26.7

0 0

5.3

116.5

68 Bytes Technology Group plc

DISCLOSURE STATEMENTS

Scope 3 data year-on-year comparison

Scope 3 data (revised for 2022/23 and 2023/24)

Scope 3 categories 2022/23 (tCO

e) 2023/24 (tCO

e) 2024/25 (tCO

1 Purchased goods and services 105,5 37. 9 141,420.9 199,618.6

2 Capital goods 8 8 0.1 914.9 1,026.5

3 Fuel and energy-related activities 55.8

72.3

64.7

4 Upstream transportation and distribution 6.5

4.6

3.9

5 Waste generated in operations 1.0 1.1 0.6

6 Business travel 264.0

315.2

39 8 .1

7 Employee commuting

(including working from home)

1,372.0

1,222.8

1,428.0

8 Upstream leased assets 33.8 39.2 19.6

11 Use of sold products 260.0

27 7.0

12,236.8

Total Scope 3 108 ,411.1 144,268.0 214,796.8

a Revised as part of the SBTi submission process. For our SBTi submission, all well-to-tank emissions were calculated for all transport types, and reallocated from category 3

into the relevant transport categories of 4, 6 and 7. For more details, see Changes to our carbon accounting on page 68.

b 2024/25 saw a large increase of category 11 (use of sold products) because we corrected the calculation to include the full lifetime use of the hardware, instead of one year’s

usage. We will assess whether this correction requires any amendments to our baseline or reduction targets. In addition, while compiling our SBTi submission, we became

aware that the software emissions reported in category 11 were ‘indirect-use phase’ and, so, optional. Given this category is based fully on assumptions, we have removed

software and only report on hardware.

Total tCO

100

200

3,000

6,000

9,000

12,000

15,000

100,000

150,000

200,000

250,000

2022/23

Baseline

2023/24 2024/25 2040/41

Target

Category 5

Category 4

Category 8

Category 3

Category 6

Category 2

Category 7

Category 11

Category 1

Total

Scope 3

Annual Report and Accounts 2024

STRATEGIC REPORT

Additional environmental disclosures continued

Energy and carbon data

Energy, GHG emissions and intensity metrics (kWh and tCO

2023/24 (revised

) 2024/25

Group kWh tCO

e kWh tCO

e Change

Energy consumption 4,989,909 5,751,831 +674,984

Scope 1 – Direct emissions from our sites 152,163 45.5 191,676 91.6 +46 .1

Scope 2 – Indirect emissions from the energy webuy

Location-based

1,000,124

207.1

955,574

180.5 -26.6

Market-based

0.0 5.3 +5.3

Scope 3 – All other indirect emissions across

ourvalue chain

3,8 37,62 2 144,268.0 4,604,581 214,796.8 +70,528.8

Total emissions – location-based

144,520.6 215,068.9 +70,548.3

Relative emissions – location-based tCO

e/£m GII 79.3 102.3 +23.0

Taking our renewable energy into account

Total emissions – market-based

144,313.5 214,893.7 +70,580.2

Relative emissions – market-based tCO

e/£m GII 79.2 102.2 +23.0

a Our methodologies for reporting energy and carbon data are set out on page 71.

b 2023/24 Scope 3 emissions figures have been revised following work with the SBTi – see more on page 69.

c Location-based emissions are calculated as the average emissions intensity of the electricity grid.

d Market-based emissions take renewable energy purchasing into account.

Energy and carbon data

The SECR regulation requires that UK businesses in scope of the regulation report on their kWh energy usage, as well as carbon

emissions and at least one intensity metric.

The table below shows our energy use and carbon emissions across Scope 1, 2 and 3 in 2023/24 and 2024/25. The intensity

metrics are shown for both market- and location-based emissions and are based on our energy intensity per million pounds of

gross invoiced income (GII).

The methodology for our calculations is on page 71, while more details can be found in the annual carbon reports published by

each of our operating companies at bytes.co.uk and phoenixs.co.uk.

70 Bytes Technology Group plc

DISCLOSURE STATEMENTS

Methodology

We have reported on the emission

sources required under the Companies

Act 2006 Strategic Report and

Directors’Report Regulations 2013

andhave followed the requirements

oftheSECR framework. We have used

the Greenhouse Gas Protocol Corporate

Accounting and Reporting Standard

tocalculate our GHG emissions, and

applied the emission factors from the

UKGovernment’s GHG Conversion

Factors for Company Reporting for

themost recent year published when

weconduct analysis.

We report on all emission sources

required by SECR under the Companies

(Directors’ Report) and Limited Liability

Partnerships (Energy and Carbon Report)

Regulations 2018. These sources fall within

our consolidated financial statements.

We followed the methodology of ISO

14064-1, which provides guidance at the

organisational level for quantifying and

reporting GHG emissions and removals.

Our approach to reporting

GHGemissions

We have reported on our GHG emissions

reduction since we listed in December

2020. Before this, GHG emissions

reporting was an established part of our

operating companies’ reporting process,

as a required regulatory disclosure for

ourformer listed group. In 2024/25, we

worked with notch carbon accounting

platform and consultancy to map our

energy and carbon data (Scope 1, 2

and3), using our 2020/21 baseline for

Scope 1 and 2 and our updated 2022/23

baseline for Scope 3, which we report

under the SECR regulations.

In our GHG emissions reporting, as well

as recording carbon dioxide (CO

), we

include all other GHGs covered under

good practice reporting – that is,

methane (CH

), nitrous oxide (N

O),

hydrofluorocarbons (HFCs),

perfluorocarbons (PFCs) and sulphur

hexafluoride (SF

). We calculate and

report GHG emissions in tonnes of

carbondioxide equivalent (tCO

e),

following recommended best practice.

Procured renewable electricity and gas

iscalculated in accordance with the

WBCSD-WRI Scope 2 Guidance on

procured renewable energy (2015).

Conversion factors have been applied

based on activity data wherever possible,

using 2024 factors as published by

DEFRA (Department for Environment,

Food and Rural Affairs) and DESNZ

(Department for Energy Security and

NetZero). Where activity data is not

available, conversion factors have been

applied based on DEFRA-published 2021

EEIO (environmentally extended input–

output) spend-based conversion factors.

Scope 3, category 1 (purchased goods

and services) emissions constitute the

majority of declared emissions, and were

calculated based on supplier-stated

emissions, where available. A proportion

of supplier-stated emissions were then

allocated to category 1, based on spend

with supplier, as a percentage of total

reported revenue. This approach

calculated emissions based on 79% of

Bytes spend and 83% of Phoenix spend.

In line with ISO 14064-1, when reporting

our carbon footprint we use the principle

of operational and financial control. This

involves us accounting for GHG emissions

from operations over which BTG has

control: both financial control, where we

direct the financial and working policies of

our businesses to gain economic benefits

from our activities, and operational control,

where we have full authority to introduce

and implement our working policies.

To calculate our emissions, we use

Greenhouse Gas Protocol standards,

which categorise emissions into three

scopes. More information about our

GHGemissions targets, workstreams

andperformance data is set out on

pagesin this section, on pages 42 to 46

and at bytesplc.com.

We will continue to improve the quality

and coverage of our GHG emissions and

associated reporting. As this process

matures, we will continue to work with

external experts to assure our carbon

data disclosures. The annual carbon

reports published by our operating

companies give more details of the

datasources and assumptions used to

calculate emissions. These reports are

available on the companies’ websites.

Waste management and water are

included within our GHG calculations,

butwe are also aiming to have a separate

waste and water policy based on usage.

We consider that impacts relating to

biodiversity and land use are not material

to our business and so are outside our

measurement scope. However, we will

continue to undertake initiatives to

improve the biodiversity in our local

areas, through volunteering with charities,

and to advocate for the importance of our

natural world, as wellas through our

offsetting initiatives, which have a

biodiversity benefit.

Annual Report and Accounts 2024

STRATEGIC REPORT

Non-financial and sustainability

informationstatement

We are required to include a non-financial information statement in our strategic report, under Sections 414CA and 414CB of

theCompanies Act 2006, as amended by the Companies, Partnerships and Groups (Accounts and Non-Financial Reporting)

Regulations 2016. We cover the information required by these regulations in Our business model (page 21), Sustainability review

(pages 34 to 46), and our Risk report and Viability statement (pages47 to 56 and pages 73 to 74).

More about us

Here we summarise where you can find more information – in this Annual Report and on the websites of BTG, Bytes and Phoenix

– for each of the key areas of disclosure that the Companies Act 2006 requires.

Environmental and social matters

Relevant policies

This year we have continued to disclose our environmental and social

commitments, including again reporting on the Task Force on Climate-related

Financial Disclosures (TCFD).

We were delighted to have our GHG emissions reduction targets validated by the Science

Based Targets initiative (SBTi) and in achieving an improved score from our CDP

disclosures from a C to a B. The beginning of our carbon literacy awareness programme

has also been well received by employees and will help drive action against our targets.

BTG employees spent more than 2,000 hours volunteering for local charities in

theircommunities.

For more information, see our Sustainability review on pages 34 to 46, the TCFD

section on pages 58 to 67, Additional environmental disclosures on pages 68 to 71

and the ESG Committee report on pages 106 to 111.

BTG: Sustainability Framework,

environmental policy

Bytes and Phoenix: Annual carbon

reports, environmental policies, Annual

carbon reports; environmental policies;

ISO 14001; climate, nature, waste and

water initiatives

Our employees

Our positive and inclusive culture, good employee engagement, and commitment to

diversity, equality and inclusion are integral to BTG’s success. We support initiatives

to help improve diversity, equality and inclusion, with progress monitored by senior

management and the Board. Our Board acknowledges there is more we need to do

toimprove diversity and we will continue with our efforts.

Employees can raise whistleblowing concerns through a variety of confidential

channels, which are most appropriate for the concern, including through Navex

EthicsPoint, an anonymous reporting tool. We have a process for investigating

whistleblowing reports and our Speak-up policy is available at bytesplc.com.

Therewere no whistleblowing reports this financial year.

Encouraging outcomes of our employee engagement included our eNPS,

andBytesand Phoenix being again Great Place toWork-certified in 2024.

For more information, see Our people on pages 36 to 39, The Board’s

yearonpage82, Stakeholder engagement on page 86 to 91 and the

NominationCommitteereport on pages 102 to 105.

BTG: Speak-up policy

Bytes and Phoenix: Health and safety

policies; equity, diversity and inclusion

policies; gender pay gap reports;

speak-up and whistleblowing policies;

EthicsPoint tool

Respect for human life

We believe that modern slavery and human trafficking are the key human rights

areas that our operations could be affected by. Given, though, that we operate

predominantly inthe UK and Ireland, where established legislation and systems

protect human rights, we believe that this is not a material issue for BTG.

BTG: Modern slavery and human trafficking

statement, human rights policy

Bytes and Phoenix: Modern slavery

andhuman trafficking statements,

supplier codes of conduct

Anti-bribery and -corruption

We operate anti-bribery and -corruption procedures that support compliance with

the UK Bribery Act and other legislation.

BTG: Anti-bribery, fraud and money

laundering policy

Business model and KPIs

Our business model includes non-financial inputs and outputs. Our Board regularly reviews both financial and non-financial KPIs,

which are relevant for monitoring the performance of the business and have a clear link to delivering against our strategy. We disclose

performance against our KPIs. For more information, see Our business model on page 21 and Measuring progress on pages 12 to 13.

Our policies are subject to periodic review, with updates made as and when required. To find out more about our policies,

visitbytesplc.com.

72 Bytes Technology Group plc

DISCLOSURE STATEMENTS

Viability statement

Our Board of directors has evaluated

BTG’s prospects over a three-year period

from the end of the financial year, in line

with provision 31 of the UK Corporate

Governance Code 2024.

The directors have chosen a viability

assessment covering a period of three

years to February 2028. They believe this

is an appropriate and realistic time over

which they can anticipate events and

assess how existing risks are developing

and new risks emerging.

Operationally, this is the time over which

BTG has a substantial view of:

• • Major customer contracts, typically

Microsoft EAs, which run for

threeyears

• • Our approved supplier status under

the main public sector framework

agreement with Crown Commercial

Services (RM6098 Technology

Products & Associated Services 2

(TePAS 2)) to 7 October 2027, which

covers the majority of the viability

period, and takes account of our long

history of successfully retaining our

position at previous renewal dates

• • The availability of external funding

from our HSBC revolving credit

facility, which runs until May 2026

andincludes an optional one-year

extension to 17 May 2027. This facility

has not been drawn against to date

and our cash flow forecasts for the

next three years show that it is unlikely

to be so in that period. If extended, the

current term covers the majority of the

viability period, and we do not foresee

there being an issue extending the

facility if required at its end date,

which we have done in the past.

The Board has performed a robust risk

assessment of the principal risks and

uncertainties facing BTG, as outlined

onpages 47 to 56. These are risks that

may pose a threat to our future financial

performance, our ability to meet future

commitments and liabilities as they fall

due, and the ongoing viability of our

business model.

Most recently, in light of changes to the

Microsoft EA incentive programme, the

Board has assessed the potential

downside impact and the extent to which

this can be mitigated by growing other

incentive opportunities and profit streams

in general – both with Microsoft and other

vendors – and by expanding our services

business. We have managed the initial

phase of change well. Any potential

negative impact will diminish as we move

through the viability period, as new and

renewing contracts are repriced to reflect

the level of incentives available –

something that affects all Microsoft

partners similarly and means we will

compete for future business on a level

playing field. We believe our stress tests,

therefore, detailed on page 74, consider

downsides around reducing gross profit

that are sufficiently severe to cater for any

adverse impacts from these incentive

changes, should they arise.

BTG’s gross invoiced income, gross profit

and operating profit increased by 15.2%,

12.0% and 17.1%, respectively, in 2024/25.

This growth continues to reflect our core

strength of doing more with existing

customers, which contributed 97% of our

gross profit at a renewal rate of 109% –

combined with success in winning new

customers – who contributed 25% of our

absolute growth in 2024/25, at more than

£4 million of gross profit. The rise in operating

profit at a higher rate than gross invoiced

income and gross profit also demonstrates

the business’s effective management of its

staff costs and overheads lines, balancing

the need to invest in the business with our

underlying growth objectives.

More generally, the 2024/25 results

demonstrate our ability to grow our key

performance metrics while remaining

resilient to the impact of external

disruptions. The directors believe this is

because of our mix of customers in the

corporate and public sectors, strong

relationships with our primary vendors,

the demonstrable value we add to our

customers, and our highly skilled

employees establishing competitive

advantage in an increasingly digital age.

The Board reconfirmed BTG’s strategy in

November 2024. Central to its conclusion

that BTG and our operating companies

will continue to operate and meet our

future commitments and liabilities over

the next three years are:

• • Our proven track record of growing

the business through securing strong

levels of customer renewals and by

winning new customers

• • A wide spread of customers over

multiple sectors and no one customer

making up more than 1.3% of our

gross profit in 2024/25

• • Strong and long-standing

relationships with our key vendors,

and continual addition of new vendors

with new products andservices

• • Our breadth of solution offerings and

our ability to quickly adapt and add to

these in line with changes to vendor

technologies and customer

requirements, recently in areas such

as managed services, security and AI.

We carried out the stress tests detailed on

page 74, which helped us make sure that

our assessment accurately reflected the

changes to our business in the past year

– such as our evolving risk management

process, and the overall industry and

economic climate.

How we stress-tested

ourbusiness

In our stress-testing, we evaluated our

viability by considering our current and

future strategies and the potential

financial impacts of our stated principal

risks. The principal risks were considered

individually and collectively, in the context

of global political and economic factors,

including the recent disruption caused by

new tariffs and the continued uncertainty

around the crises in Ukraine and the

Middle East.

While the introduction of import tariffs by

a number of countries will increase the

cost of imported goods within the global

supply chain, we do not expect this will

have a direct material impact on the

profitability of the business within the

viability period, given that we are neither

asignificant exporter nor importer of

goods. However, this is a fast-moving

matter, so we will continue to monitor

itclosely for more changes and, in

particular, for any indirect impact on

ourcustomers’ spending levels.

In assessing our viability, we applied

potential downside changes to three

keyfinancial measures – gross invoiced

income, gross profit and debtor

collections – to see how their

performance would alter if our principal

risks and uncertainties were realised.

Annual Report and Accounts 2024

STRATEGIC REPORT

Viability statement continued

Thelikelihood of such a realisation

threatening BTG’s viability considered

remote, given the robust nature of our

business model combined with the

effectiveness of our risk management

andcontrol systems and our current

riskappetite.

However, we focused on these three

financial measures because we believe

they’re the most likely to be adversely

affected – and to create a progressively

negative impact if they deteriorate

continually over the viability

assessmentperiod.

We also set out our operational mitigations

by considering the extent to which

negative impacts on these three financial

measures could be offset by freezing

future pay and recruitment of new heads,

and by making savings in discretionary

spend. More automatic and immediate

mitigation is ‘built in’ because commission

payments to employees would fall in line

with the reduced gross profit, ‘natural’

leavers would not be replaced, and lower

dividend payments would result from the

reduced profits.

Our most extreme downside scenario,

case two, is set within the context of

uncertainty around the current economic

conditions and geopolitical environment.

This scenario reflects the potential effect

of a generalised economic downturn

onour customers’ spending patterns

andwhere only partial mitigation would

bepossible.

Details of our stress-testing

BTG compared a base case scenario and

two downside scenarios. In each of the

downside cases, we considered two

levels of mitigation, full and partial:

• • Base case – this was forecast using

the growth rates included in the

Board-approved budget for the

year ending 28 February 2026,

extended until 28 February 2028

• • Downside case one – this severe but

plausible scenario modelled gross

invoiced income reducing by 10% year

on year, gross profit reducing by 15%

year on year in the same period, and

debtor collection periods extending

byfive days (all from June 2025)

• • Downside case two – this stress

scenario modelled both gross

invoiced income and gross profit

reducing by 30% year on year, with

debtor collection periods extending

by 10 days (again, all from June 2025)

• • Partial mitigation measures – with the

onset of both downside cases, we

modelled immediate ‘built-in’

reduction of commission in line with

falling gross profit, freezing recruitment

of new heads and not replacing natural

leavers from September 2025, freezing

future pay from March 2026 (given

current year rises are already

committed) and freezing rises in

general overheads from March 2026

• • Full mitigation measures – in addition

to all the partial measures, these

measures modelled additional

headcount reductions from March

2026, in line with falling gross profit.

The impacts of climate change were

considered as immaterial, so they fall

within the base case scenario.

The pay and headcount mitigations

applied in the downside scenarios are

within BTG’s control and, depending on

how severe the impacts of the modelled

downside scenarios are, the Group could

activate additional levels of mitigation. For

example, those relating to headcount

freezes or reductions could be

implemented even more quickly than

indicated to respond to downward trends

because, considering the sudden and

significant falls in profitability and cash

collections modelled under both

downsides, we would not wait for a full

three months before taking action. We

would also be able to take more action to

lower our operating cost base, given the

flexibility of our business model.

A natural reduction in the level of

shareholder dividends would follow,

inline with the modelled reductions in

profit after tax.

The Board believes therefore that all

mitigations have been applied prudently

and are within BTG’s control.

Our confirmation of viability

Having assessed the financial impact on

our results of these stress-tested models,

the Board concluded that our opening

reserves of cash, along with our projected

revenue and profitably over the review

period, and our ability to reduce spending

if required, would mean we could continue

trading over the next three years.

Section 172

statement

The Board embraces the principles

of the UK Corporate Governance

Code 2024, including those aimed

at promoting transparency around

stakeholder engagement. We

consider the interests of the Group’s

employees, customers, suppliers

and vendors, investors, and

communities and the environment in

our decision making and in how

wedeliver our strategy to achieve

long-term, sustainable success.

The Board continues to ensure it

acts in good faith and to promote

the success of the Group forthe

benefit of shareholders and,

indoing so, having regard for the

Group’s key stakeholders and other

matters set out in Section 172(1)

(a)to(f) of the Companies Act 2006.

More information on how we, as a

Board, have fulfilled our duties to

our stakeholders under Section 172

of the Companies Act 2006 can be

found on pages 86 to 91.

The Board approved the strategic

report on pages 1 to 74 of this

Annual Report on 12 May 2025.

Patrick De Smedt

Chair

12 May 2025

74 Bytes Technology Group plc

DISCLOSURE STATEMENTS

Governance report

76 Chair’s introduction to

corporategovernance

78 Board of directors

81 Executive Committee

82 The Board’s year

86 Stakeholder engagement

(s.172compliance)

92 Audit Committee report

102 Nomination Committee report

106 ESG Committee report

108 Compliance with the UK

CorporateGovernanceCode

112 Directors’ remuneration report

131 Directors’ report

135 Statement of directors’ responsibilities

Why is diversity, equity and inclusion

so important to BTG?

It’s a foundation of our winning

culture. Bringing together people

from different backgrounds –

including gender, age, ethnicity

andexperience – creates the

diversity of thought that fosters

innovation and growth.

Anna Vikström Persson

Independent non-executive director

GOVERNANCE REPORT

75Annual Report and Accounts 2024/25

Chair’s introduction to

corporate governance

The Board had a busy and productive

year: appointing a CEO and two

newnon-executive directors,

strengthening our governance

processes and supporting BTG

indelivering further growth.

Overseeing the Board changes and ensuring that

members were equipped to excel in their new positions

was a primary task this year. We were delighted to

appoint Sam Mudd as CEO on 10 May 2024. Sam,

whohas been an executive director since July 2023,

had become Interim CEO in February 2024, on the

resignation of the former CEO.

Sam was appointed after a benchmarking exercise

against strong external candidates. We chose her, not

just because she had the right skills and experience,

but also because she was the best cultural fit. Sam

hasproven to be the right choice. She is a great leader,

who is very credible with all our stakeholders, including

our employees, customers, partners and investors.

Stakeholder engagement is one of our main duties so,

for our investors, for example, Sam and I swiftly set

about an intensive round of meetings with them in the

months immediately following the leadership change.

The strong investor support the Board received at our

2024 AGM – with just one resolution gaining less than

95% of the vote – felt like a vindication of our decisive

approach and a sign of confidence in Sam and the

Board, which we also strengthened with two new

non-executive directors. Anna Vikström Persson

andRoss Paterson joined the Board on 1 June. Anna

became Chair of our new ESG Committee and Ross

became Chair of our Audit Committee, succeeding

theInterim Audit Committee Chair, Dr Erika Schraner.

Erika, in turn, stepped up to the role of senior

independent director in the year and has added

significant strength and value to this position.

BTG’s strong commercial performance this year,

particularly in the second half, as well as its refreshed

leadership, also served to reassure the markets and

deliver us a strong year end.

A strong, collaborative Board

Our refreshed Board has a great mix of skills and

experience. Anna’s HR experience will be invaluable

aswe further develop our culture and our people; Erika,

who is also our Remuneration Committee Chair, has a

strong track record in M&A, finance, technology and

strategic analysis; Ross is steeped in finance and M&A;

while Shruthi Chindalur, our designated non-executive

director for employee engagement, who joined

inFebruary 2024, has a strong commercial and

international background in thetechnology sector.

BTG’s executive directors complement this mix. Sam

brings more than 20 years of tech company leadership

experience and CFO Andrew Holden has a long-standing

tenure with the Group and is experienced in finance,

strategy and operations.

We became a strong, collaborative team in a very

shorttime, with each director fully aligned with Group

culture. I’m already pleased with how much we’ve

achieved together.

Part of the Board’s strength comes from our diversity.

We adhere to the Financial Conduct Authority (FCA) UK

Listing Rules, with women making up 57% of the Board

against the FCA’s target of 40%; two directors coming

from an ethnic minority background, against its

requirement of at least one; and two of our senior roles

being held by women, against the FCA target of at least

one. Diversity alone does not create a strong Board, of

course, but it often brings the breadth of thought and

mindset that is so essential to healthy board debate.

Strengthening governance processes

Our Board fully embraces the principles and

requirements of the UK Corporate Governance Code

and strives to continually improve our governance.

Thisyear, we introduced additional measures to keep

directors mindful of their regulatory responsibilities,

including an online training module on market abuse

regulations and an annual governance refresh session

by our external legal counsel. More details of Board

training are set out in my Nomination Committee report

on pages 102 to 105.

To continue to increase the rigour of our processes, we

introduced a corporate governance tracker. This sets

out all necessary Board activity – such as updates

ofshareholding records and ongoing succession

planning– enabling us to effectively track our

performance. The tracker is discussed at each of our

Board meetings and is shared with our external auditor.

We also use a dedicated tool to manage our insider lists.

Supporting and challenging

theexecutiveteam

Supporting and challenging the executive team in

pursuing the right strategy for long-term success and

shareholder value is one of our key roles. We discuss

the ongoing implementation of BTG’s strategy at each

meeting, including assessing the potential to expand

inour offering with acquisitions.

76 Bytes Technology Group plc

GOVERNANCE REPORT

At our annual November strategy day, we considered

and agreed BTG’s updated five-year strategic plan.

Themain points discussed were:

• • Investment in key technology propositions,

notablycloud migration, hybrid cloud security

andAI innovation

• • More investment in services, to complement

ourhistorical focus on software sales and to

buildon our existing service offerings

• • Maintaining our strong culture and ensuring our

senior managers have the management skills to

lead our business and people as BTG grows.

Supporting our people and culture

Our collaborative, customer-focused culture is key to

our success. This year we supported the business in

taking steps to nurture and enhance this asset – for

more details, see page 11.

A key decision was to appoint our first CPO, who will

report directly to Sam. Until now, our HR teams in each

business have provided strong support across core

HRoperations, but appointing a proven CPO – with

experience in areas like assessing and maintaining

company culture, and developing a solid approach to

success planning and leadership development across

our business – will help us build more strategic

HRfoundations.

Employee engagement is essential to keeping our

culture strong. Shruthi met many of our people during

the year and reported back to the Board – for details,

see her introduction to stakeholder engagement on

pages 86 to 91.

However, employee engagement is not only Shruthi’s

role – it is shared by all directors. In July, for example,

we all attended a town hall at Bytes’s Leatherhead

offices where I led a session about the Board, including

the strategy and governance oversight role we play, our

key strategic priorities, investments being made to

support the ongoing growth of the business, and our

focus on promoting and supporting a strong culture

across the Group. Half the town hall time was then

given over to questions and I was delighted at the level

of employee participation.

Our internal auditors held focus groups at both Bytes and

Phoenix to assess employee perception of our culture.

The results were reported to the Board and fed into a

Group culture framework, incorporating our purpose

and values and our new mission, which has been

developed by Sam in collaboration with the businesses.

Supporting internal investment

The quality of our customer service, reflected in our

strong net promoter score (NPS) with customers is

core to our competitive advantage. To ensure that our

service quality remains high, the Board supported

more investment in customer service, in particular,

therecruiting of more technically skilled pre-sales

andservices delivery people. In line with our strategic

emphasis on AI, we welcomed BTG’s creation of an AI

practice, to develop projects based on AI technologies,

and a Group AI forum, to share good practice across

our two businesses. These steps aim to both meet

customer demand and enable BTG to improve

internalproductivity.

Enhancing our focus on ESG issues

Customers, and other stakeholders, are also

increasingly demanding action on environmental,

social and governance (ESG) issues. This year we

established a Board ESG Committee, chaired by Anna

Vikström Persson. The committee will monitor BTG’s

progress against its ESG targets and help the Group

manage related risks and opportunities. It works

closely with our other Board committees, particularly

the Audit Committee.

BTG reached some significant environmental

milestones this year. In June 2024, the Group’s carbon

reduction targets were validated by the Science Based

Targets initiative. Other pleasing external recognition

included the rise in our ISS ESG corporate rating

fromC- to B-, a level attained by less than 10% in

ourindustry. This illustrated our strengthened ESG

governance, and was supported by external validation

and BTG’s carbon reduction targets and actions –

which contribute to sustainability awareness and

carbon reduction across the Group. This is discussed

in the Planet section on pages 42 to 46.

Our focus for 2025/26

In the coming year, the Board will continue to support

and challenge our Group growth strategy; focus on our

governance; engage with our investors, employees,

customers, suppliers and vendors, and communities;

and support our great people and the strong culture

that are so fundamental to our future success.

Patrick De Smedt

Chair

12 May 2025

Annual Report and Accounts 2024

25 77

GOVERNANCE REPORT

Board of directors

Our directors draw on a rich pool of collective industry knowledge

and skills and experience of UK and international business, gained

from senior roles both within BTG and in other leading companies.

Patrick De Smedt Chair Nationality Belgian, British Age 69

Appointed 15 October 2020

Patrick has a strong track record in international business, including 23 years in senior roles at

Microsoft. During his two decades at Microsoft, he founded the company’s Benelux subsidiaries,

led the development of its Western European business and served as chairman of its Europe,

Middle East and Africa region. Since leaving Microsoft in 2006, Patrick has served as chair

andnon-executive director on the boards of a diverse range of European public and private

equity-backed companies.

External board appointments None

Committees Nomination, Remuneration, ESG Attends by invitation Audit

Sam Mudd Chief Executive Officer Nationality British Age 56

Appointed 12 July 2023

Sam brings more than 20 years’ experience in leadership positions to the Board. Sam joined

Phoenix in November 2003, having previously held senior roles at WordPerfect, Novell Inc. and

Trustmarque Solutions. Sam became MD Phoenix in 2014, overseeing a period of significant

growth during which Phoenix won numerous awards, including Microsoft UK Partner of the

Year2021. She joined the Board in July 2023 and was appointed as CEO on 10 May 2024.

InOctober 2020, Sam won the Industry Achievement Award at IT reseller magazine CRN’s

Women in Channel Awards.

External board appointments None

Attends committees by invitation Audit, Nomination, Remuneration, ESG

Andrew Holden Chief Financial Officer Nationality British, South African Age 58

Appointed 21 October 2021

Andrew brings strong financial and commercial acumen to the Board, and has a proven

record of delivering insights into strategy implementation and executive decision making.

Inhis role as CFO, he has guided the Group, as it continues to pursue its growth strategy.

Hejoined BTG as COO in June 2021 from JSE-listed technology company Altron Limited,

BTG’s former parent company, from which it demerged in 2020. Andrew was appointed

asBTG’sCFO in October 2021.

External board appointments None

Attends committees by invitation Audit, Nomination, Remuneration, ESG

Dr Erika Schraner Senior independent director Nationality British, American, Swiss Age 57

Appointed 11 September 2021

Erika brings more than 25 years’ experience in senior leadership positions to the Board of BTG.

During her executive career, she spent more than 18 years working in Silicon Valley in the technology

sector. She held senior professional services roles with Ernst & Young and PricewaterhouseCoopers,

and an executive role with Symantec Corporation, a global cybersecurity company. Earlier in

herexecutive career, she held roles with IBM, REL Consultancy Group and Computer Science

Corporation. Erika earned a PhD in management science and engineering at Stanford University.

External board appointments JTC plc, HgCapital Trust plc, Pod Point Group Holdings plc

(until5 June 2025)

Committees Audit, Nomination, Remuneration, ESG

Chair

78 Bytes Technology Group plc

GOVERNANCE REPORT

Shruthi Chindalur Independent non-executive director Nationality Indian Age 47

Appointed 1 February 2024

Shruthi has more than 20 years’ experience across the technology, software-as-a-service and

advertising technology industries. She was most recently an executive managing director at the

AI-based advertising group Criteo, where she led EMEA and Global Indirect Channels. Shruthi

has also held a number of senior commercial roles at Oracle and LinkedIn, with market

responsibility covering APAC, EMEA and the Americas. She is our designated non-executive

director for employee engagement.

External board appointments None

Committees Audit, Nomination, Remuneration, ESG

Ross Paterson Independent non-executive director Nationality British Age 53

Appointed 1 June 2024

Ross is a qualified chartered accountant and brings extensive listed-company board

experience as a CFO and non-executive director. Ross spent more than 23years at

Stagecoach Group Limited (formerly Stagecoach Group plc and listed until 2022) in senior

executive finance positions, including ten years as CFO. Ross is currently onthe boards of

FTSE 100 company The Unite Group plc and AIM-listed technology businessTracsis plc.

External board appointments The Unite Group plc, Tracsis plc

Committees Audit, Nomination, Remuneration, ESG

Anna Vikström Persson Independent non-executive director Nationality Swedish Age 55

Appointed 1 June 2024

Anna was previously chief human resources officer for Pearson plc and executive

vicepresident, head of human resources at Sandvik AB and SSAB AB. She also held

senior HR roles at Ericsson Group and was an independent non-executive director at

Knowit AB. Anna currently serves as an independent non-executive director of

Videndum plc and will chair its remuneration committee from 16 June 2025.

External board appointments Videndum plc

Committees Audit, Nomination, Remuneration, ESG

Board changes

• • Erika Schraner assumed the role of senior independent director and Interim Audit Committee Chair on 24 March 2024,

and stepped down as Interim Audit Committee Chair on 1 June 2024.

• • Ross Paterson was appointed as an independent non-executive director and Audit Committee Chair on 1 June 2024.

• • Anna Vikström Persson was appointed as an independent non-executive director and ESG Committee Chair on 1 June 2024.

• • Sam Mudd was appointed as CEO on 10 May 2024.

• • Shruthi Chindalur assumed the role of designated non-executive director for employee engagement on 25 March 2024,

arole previously held by Erika Schraner.

• • Mike Phillips resigned as an independent non-executive director on 24 March 2024.

Read the full

biographies

Annual Report and Accounts 2024

25 79

GOVERNANCE REPORT

Board of directors continued

Board attendance*

Board member

For the financial year to

28 February 2025

Patrick De Smedt 13/13

Sam Mudd 13/13

Andrew Holden 13/13

Erika Schraner 13/13

Shruthi Chindalur 12/13

Ross Paterson – appointed 1 June 2024 6/6

Anna Vikström Persson – appointed 1 June 2024 6/6

Former directors

Mike Phillips – resigned 24 March 2024 2/2

* This table includes scheduled Board meetings and excludes Board calls.

Board composition at

28 February 2025

Independent non-executive Chair¹

Independent non-executive directors

Executive directors

Gender split of directors at

28/29 February

57%

29%

50%

29%

Target 40%

2023

2022

2025

2024

Men Women

Ethnic diversity of directors at

28/29 February

29%

17 %

2025

2024

White British or other White

Asian/Asian British

Directors’ collective skills scored

out of 21

Strategy

Management

Technology

Finance

Operations

Board independence and diversity

During the year, we continued to focus on independence and diversity, as illustrated in

the charts below and set out in this governance report.

The data here reflects the position at year end. We set out more details about changes

to the Board during the year in the Nomination Committee report on pages 102 to 105.

1 At time of appointment.

Directors scored themselves out of three for each skill.

80 Bytes Technology Group plc

GOVERNANCE REPORT

Executive Committee

The committee meets monthly and helps to develop and deliver BTG’s strategy.

Individual Executive Committee members are responsible for leading their

directorates and ensuring they are run effectively and efficiently.

Biographies for Sam and Andrew can be

found on page 78.

Sam Mudd Chief Executive Officer Andrew Holden Chief Financial Officer

Jack Watson MD Bytes Software Services Nationality British Age 41

Appointed as MD 1 March 2021

Jack joined Bytes as a new business account executive in November 2006. He was

promoted to Sales Manager in 2012 and grew his team’s sales profit by more than 200%

inless than four years. He developed the ‘7 steps’ sales programme, which boosted

individual sales performance and accelerates new talent in the organisation.

Bytes’s sales profitability doubled during Jack’s five years as Sales Director, from 2016

to2021. During this time, he oversaw the rollout of a new CRM system, launched a sales

management competency framework and coaching programme, and integrated the

salesteams from Bytes Security Partnerships, when the previously separate business

wasmerged with Bytes in 2020. Jack was promoted to MD Bytes in March 2021.

Clare Metcalfe MD Phoenix Software Nationality British Age 56

Appointed as MD 10 May 2024

Clare joined Phoenix in 1997, following a decade of experience in sales and procurement

roles in the IT industry. Having held a number of senior management positions within the

company, she was appointed as Operations Director and to the Phoenix Board in 2018.

Clare has overseen a wide range of responsibilities, including risk, governance,

operationsand systems development.

She stepped up to be Interim MD Phoenix on 21 February 2024 and MD Phoenix

on10 May2024, where her passion for innovation and transformation continues,

alongsideacommitment to supporting customers to transform digitally and deliver

ontheirbusiness objectives.

Annual Report and Accounts 2024

25 81

GOVERNANCE REPORT

Patrick speaking at the town hall

meeting at Bytes in July 2024

The Board’s year

Here is a round-up of events during a busy year for

the Board, with our activities ranging from appointing

a new CEO to engaging with BTG’s great people.

How we reshaped our Board

Our main priority in 2024/25 was reshaping

the Board after the former CEO resigned in

February 2024, and completing our related

investigation, conclusions of which we

announced on 16 May 2024 and are

available on our website.

The Board acted decisively, and we swiftly

appointed Sam Mudd as Interim CEO, making

her role permanent in May after a rigorous

recruitment process. Sam has been one of our

executive directors since July 2023 and was

Phoenix’s MD for a decade.

We appointed two new independent non-executive

directors shortly afterwards. Ross Paterson and

Anna Vikström Persson joined the Board on

1 June, just a few months after we appointed

Shruthi Chindalur.

Ross became Chair of our Audit Committee,

succeeding Dr Erika Schraner – who was Interim

Chair and appointed as senior independent

director earlier in the year. Anna took up the role

of Chair of our new ESG Committee, while

Shruthi succeeded Erika as designated non-

executive director for employee engagement.

For more details, see our Nomination

Committee report on pages 102 to 105.

Keeping our stakeholders engaged

Stakeholder engagement is one of our main duties – one that

was even more important this year following the change of

CEO and appointment of two new non-executive directors.

Our Chair, Patrick De Smedt, and CEO, Sam Mudd, spoke to

numerous investors, particularly in the months immediately

following the leadership change.

The Board also met with Microsoft UK’s leadership, to

discussthe technology market, partner landscape and key

technologies. Deepening our market insights and remaining

aligned with the priorities of BTG’s vendors is an ongoing part

of the Board’s work, and will continue in the year ahead.

Staying close to BTG’s people was another priority. In her

designated employee engagement role, Shruthi met many

employees on day-long visits to Bytes’s Leatherhead office

and Phoenix’s Pocklington office. She also had one-to-one

meetings with BTG’s two MDs.

As part of our wider employee engagement role, our whole

Board attended a town hall meeting at Bytes, where Patrick

outlined the Board’s role and why engagement is so crucial.

Time was also devoted to answering questions and engaging

with employees in a more informal setting.

For more details, see our introductions to

corporate governance on pages 76 to 77 and

tostakeholder engagement on pages 86 to 87.

My closed listening sessions

with employees encouraged

unfiltered, insightful and direct

feedback from them.

Shruthi Chindalur

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GOVERNANCE REPORT

Keeping our

winningculture

How we preserve trust in our business

Trust in the way BTG operates is essential to keeping

ourstakeholders’ support. To ensure that such trust

remainsjustified, we took more steps to strengthen

ourgovernance processes.

We made regular awareness training central to our Board calendar,

and directors received presentations on corporate governance

from BTG’s legal counsel and external auditors. Our Board also

received a refresher session on market abuse regulations. All BTG

directors have signed up to the Deloitte Academy, which offers

governance briefings, webinars and seminars.

For more details, see our Nomination Committee

reporton pages 102 to 105.

Ensuring BTG’s strategy continues to deliver

BTG’s strategy has delivered exceptional growth since the

2020 IPO. One of the Board’s key functions is to oversee and

advise on strategy and to ensure that, as markets change,

the Group continues in the right direction.

Our annual strategy day, the first with Sam Mudd as CEO, gave the

Board the chance to discuss and challenge BTG’s strategic growth

plans with the senior management team.

We fully support the executive team’s strategy, which remains

largely consistent with previous years, while evolving in line with

the industry and vendors’ changing needs. It will concentrate on

investing in key technologies, notably cloud migration, hybrid

cloud security and AI innovation, investing more in managed

services, and maintaining a strong culture.

For more details, see our Chair’s introduction

tocorporate governance on pages 76 to 77.

Numerous awards, including vendor

recognitions, being Great Place to

Work-certified, and continuing

growthtestify to BTG being a leading

company to do business with.

Employees enjoy working for the

Group–they care about delivering an

exceptional service to customers and

developing long-term relationships with

them, which can sometimes span decades.

The Board supported the executive

team’s continuing efforts to uphold the

strong culture, as BTG grows. These have

included focus groups to determine what

Bytes and Phoenix people think about

BTG’s culture and to identify areas for

continual improvement. Their findings

were fed back to the Board and

incorporated into a culture framework,

including a revised BTG mission, that Sam

Mudd developed with the businesses.

As part of this drive to maintain BTG’s

winning culture, in early 2025 the Board

approved the appointment of a CPO.

TheCPO will help BTG to continue

todevelop our HR tools, including

advancing our succession and

leadershipdevelopment plans.

For more details, see our

Chair’sintroduction to corporate

governance on pages 76 to 77

and Our people on pages 36 to 39.

Annual Report and Accounts 2024

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GOVERNANCE REPORT

Upping our oversight

ofESG issues

The Board’s year continued

Environmental, social and governance

(ESG) issues remain important to our

investors, regulators, employees and

communities.

This year the Board established our ESG

Committee, chaired by Anna Vikström

Persson. With BTG being a ‘people

business’, the ‘S’/social aspect of ESG

isparticularly important to the Group.

Aformer chief human resources officer,

Anna’s strategic, executive-level

expertise is helping us bring out the

bestin our people.

The committee will monitor BTG’s

progress on implementing the Group’s

ESG strategy, which the Board approved

in October. It will work particularly with the

Audit Committee to make sure BTG

reports accurately on ESG issues.

Reflecting the importance of the ESG

function, all our non-executive directors

are members of this committee.

For more details, see our

ESGCommittee Chair’s

introduction on pages 106

to107 and Our planet on

pages42 to 46.

The Group has already achieved notable

ESG milestones and has ambitious

goals– and will continue to work to

makethese a reality over the long term.

Anna Vikström Persson

Staying up to date with what matters

tothebusiness

A thorough understanding of BTG’s operations and industry

is essential if directors are to support and challenge the

executive team effectively.

Both our new non-executive directors had comprehensive

inductions on joining BTG. They visited key sites; met Bytes’s MD,

Jack Watson, and Phoenix’s MD, Clare Metcalfe, plus our Group

Company Secretary, Group Sustainability Manager and a senior

HR manager; were introduced to our external legal counsel,

remuneration consultants and brokers; and were briefed on BTG,

itsstrategy and governance processes, and the year ahead.

At Board meetings, directors heard updates on market and industry

trends, had briefings from both BTG MDs, and received valuable

perspectives from senior vendor partners within the market.

SeniorBTG operations managers presented on topics relevant

toour business, including a session with Bytes’s and Phoenix’s

chief technology officers onthe risks and opportunities of AI.

For more details, see our Nomination Committee

report on pages 102 to 105.

Preparing for ongoing regulatory changes

Staying ahead of regulatory change is essential.

This year the Board oversaw BTG’s preparations for provision 29

ofthe UK Corporate Governance Code 2024, which, from the

year ending 28 February 2027, will require BTG to declare the

effectiveness of its material controls; and for IFRS S1 and S2,

thenew sustainability reporting requirements expected to come

into force for UK companies in 2026, which will affect the Group’s

2026/27 reporting. We are also preparing for the new failure to

prevent fraud offence, introduced through the Economic Crime

and Corporate Transparency Act 2023, which becomes effective

from 1 September 2025.

We used these regulatory preparations as an opportunity to review,

and make recommendations for improving, BTG’s risk

management and governance processes.

For more details, see our Audit Committee

Chair’sintroduction on pages 92 to 93.

84 Bytes Technology Group plc

GOVERNANCE REPORT

Completing an efficient internal review

The Board continued to get the most out of our internal

review by using expert help with the annual process.

Lintstock, a board-review advisory firm, again brought external

insights to our 2024/25 internal evaluation. Our directors

completed bespoke questionnaires on our effectiveness,

returning them anonymously to Lintstock for analysis and

feedback. Our Chair, Patrick De Smedt, met all directors

individually to hear their thoughts, while Erika Schraner,

oursenior independent director, met with Patrick and had

discussions with her Board colleagues. Members of ourAudit,

Nomination, Remuneration and ESG Committees also

provided feedback on the performance of their committees.

Lintstock found the Board performed well above, or equal

to,its governance index of more than 200 other companies,

against comparable metrics. It recommended that we

continue to focus on BTG’s growth strategy, people and

culture, and on supporting the executive team. We discussed

the review findings at our February Board meeting and,

goingforward, agreed to prioritise:

• • Maintaining a strong focus on the Group’s

growthstrategy

• • Ongoing focus on strengthening governance

• • External communication and engagement

• • Continually developing our plan for succession,

leadership development and a strong culture

• • Continually assessing and reviewing our collective

Boardand committee skills and experience

• • Developing leadership in AI

• • Ongoing strategic support and guidance for

theexecutive team.

We also spent time addressing recommendations from last

year’s internal review, making good progress on Lintstock’s

recommendations for 2024/25, by:

• • Maintaining our focus on reviewing composition,

diversity, skills and experience

• • Continuing to expand our knowledge of topics that

mattermost to customers and vendors, such as

emerging technology

• • Continuing to focus on strategy and future direction,

particularly around customer requirements, emerging

technologies like GenAI, vendor offerings andstrategies,

and outcomes from the annual strategy session

• • Providing ongoing opportunities for the Board to hear

from external experts to challenge our thinking

• • Continuing to focus on company identity and culture,

particularly as we grow, through succession planning,

leadership development and talent recruitment.

Our Board will have its next full external review in 2025/26.

With high ratings for its dynamics,

theBoard shows a healthy and

respectful culture of debate

andchallenge, and directors

sharetheirviews openly.

Lintstock

Our Board will have its next full external review in 2025/26.

Annual Report and Accounts 2024

25 85

GOVERNANCE REPORT

Stakeholder engagement (s.172 compliance)

Introduction from our designated non-executive

directorfor employee engagement

Fulfilled employees are at the heart of great companies. Commitment

tocaring through words and actions is fundamental to employee

success, company success and the success of its customers.

BTG people have

unswerving customer

focus, a passion for

technology, deep

prideinwhat they do,

bigambitions and a

lotofgratitude for

theircolleagues.

Shruthi Chindalur

Foundational principles and

focus areas

Since becoming BTG’s designated

non-executive director for employee

engagement in March 2024, I have met

peers in the same role from other listed

technology and non-technology

companies to discuss what our role could

become and achieve. I am keen to build

on the good work of my predecessors and

engage more deeply and broadly with our

people than we have before. The Board

decided that the focus areas for the

designated non-executive director for

employee engagement will cover

company culture, attracting and retaining

the best talent, and future-proofing

organisational strength and structure.

As a Board, we have crafted our operating

principles on employee engagement to

revolve around:

• • Maintaining the integrity of employee

relationships with the Board

• • Building a structured feedback loop

between employees and the Board

• • Engaging the Chair and all the

non-executive directors with the

employees meaningfully

• • Working closely with the ESG

Committee on diversity, equality

andinclusion matters.

The central tool for this engagement is

ourlistening sessions with employees.

An encouraging engagement

journeyso far

I’ve had the pleasure of meeting several

groups of BTG employees. The full-day

visits to our Leatherhead and Pocklington

offices, employee forums, HR/culture

sessions, structured and unstructured

floor walks, individual and group site

leadership meetings, and meetings with

the MDs revealed some unmistakeable

observances – the pure passion and

positivity from the employees.

At both sites, I held closed listening

sessions with employees across

fourlevels of seniority from various

departments. A new prescriptive format

encouraged unfiltered, insightful and

direct feedback from them. For me, this

information formed the foundation for

thefirst set of actionable items to move

forward, working with the CEO and

therest of the Board. The combined

learnings from the employee forums were

consolidated, prioritised and fed back to

the Board and the MDs to take actions

across the year and the next.

86 Bytes Technology Group plc

GOVERNANCE REPORT

Preserving positive cultural traits

as we grow and amplifying the

employee voice

In the process of taking a company pulse,

I was positively struck by the strong

culture of community within the company.

Our people have unswerving customer

focus, a passion for technology, deep

pride in what they do, big ambitions and a

lot of gratitude for their colleagues. Their

voice matters more than ever and, as a

Board, we will strive to preserve these

positive traits as the company grows.

Employee listening sessions provided

valuable insights that are shaping key

plans and policies in HR, organisational

structure, diversity, equality and

inclusion, remuneration, reward and

recognition, culture, succession planning,

and talent and leadership development.

Employees also shared useful

perspectives on the company strategy.

Based on employee feedback, the Board

and the leadership team took action

through the decision to appoint a CPO,

and to approve a new office building to

support the company’s growth and

employees’ wellbeing. Other steps

included strengthening career and

succession planning, expanding the

finance team, formalising the Women in

Technology employee group, enhancing

pay parity, and reinforcing staff

recognition and rewards.

As a Board we also prioritised preserving

key initiatives that enhance the employee

experience, including apprenticeship

programmes, culture workshops, induction,

learning and development, community

collaboration, and a strong focus on

customer and technology excellence.

This Board commitment to engaging with

employees was also demonstrated at the

Bytes 2024 town hall, which followed

onethe Board had held at Phoenix the

previous year. With full Board attendance,

our Chair presented on our role as a

board, our duties and how and why we

engage with stakeholders. An informal

lunch followed with several employees

who shared positive feedback about the

presentation. Our committee chairs

visited different sites and enjoyed meeting

various employee groups across the year.

Employee engagement is core to the way

the Board and the leadership team works.

It has always been important at BTG,

butwe want to amplify it even more. The

perspectives of employees will remain an

important part of our Board deliberations

and decision making – and, in my

employee engagement role, it has been

and will be my continued duty to bring

their voice to the Board at and beyond

ourformal meetings.

Making BTG a shining example of

culture, inclusion and leadership

In the year ahead, we will continue our

wider Board engagement with employees

and share how their feedback has

powered the actions taken by the

company as it grows and scales.

If companies have great leadership, are

inclusive by design and sustain an excellent

culture, employees are automatically

more engaged – which, of course, drives

results. My personal goal is for BTG to be

a shining example of culture, inclusion

and leadership in the tech company

ecosystem. I am really looking forward

toworking with my colleagues and BTG’s

people this year to further that ambition.

Shruthi Chindalur

Designated non-executive director

foremployee engagement

Annual Report and Accounts 2024

25 87

GOVERNANCE REPORT

Stakeholder engagement (s.172 compliance) continued

Our approach to Section 172

Customers, suppliers and vendors, employees and investors are core parts of

BTG, while support for our communities and the environment – which is also a

stakeholder – underpins the company’s values and purpose.

Section 172 of the Companies Act 2006

imposes a duty on directors to act in a

way that they consider, in good faith, best

promotes the success of the company

forthe benefit of all its members.

In our decisions and actions during the

year, we, the Board, believe we promoted

the success of BTG for the benefit of

itsmembers as a whole, while also

considering stakeholders and the matters

set out in Section 172(1) (a) to (f) of the

Companies Act 2006. We know that

different stakeholders may hold different

views about the decisions we take, and

that we sometimes need to act based on

competing priorities. Our engagement

activities help us to understand what

matters most to our stakeholders and

tomake fully informed decisions in

theirinterests.

We believe strongly in doing business

inthe right way, with all our decisions

underpinned by their impact on BTG’s

main stakeholder groups. We describe

these groups in the tables that follow,

alongside a discussion of how we engaged

with and responded to them in the year.

Principal decisions in 2024/25

It was another busy year for the Board.

Here we set out two examples of principal

decisions we took in 2024/25 and how

weconsidered Section 172 matters in

theprocess.

Setting up our ESG Committee

The Board established the ESG

Committee with effect from June 2024,

asa natural evolution of the company’s

governance arrangements.

How the Board made its decision

Given the importance of climate change,

and that the issues are evolving constantly,

ESG is now part of our governance

structure and overseen at the highest

level of the Group. To increase this

oversight, and to more closely monitor

theimplementation of BTG’s ESG and

sustainability strategy, as a Board we

decided to delegate our authority to a

new, dedicated ESG Committee.

Chaired by independent non-executive

director Anna Vikström Persson, the

committee provides focused input to the

Board and other Board committees on

ESG matters. Its mandate encompasses

the ongoing focus on the company’s

climate transition strategy, including

reaching net zero emissions; addressing

employee matters, including diversity,

equality and inclusion, as well as matters

related to customers, partners and

communities; and overseeing the

company’s business conduct, including

corporate and commercial governance,

business ethics, anti-bribery and

-corruption measures.

The ESG Committee provides more rigour

as the company matures its ESG strategy,

bringing together knowledge of financial,

operational and sustainability strategies

to find synergies, and to identify conflicts,

risks and opportunities. It also helps the

company navigate ESG regulations and

reporting requirements.

For BTG’s stakeholders, like employees,

itmeans greater consideration of diversity

and inclusion; for the environment,

additional oversight of our carbon

reduction goals; for customers, and

suppliers and vendors, help to reduce

their carbon footprint and support their

employees andcommunities; and for

investors, more robust governance and

assurance in our ESG reporting.

Appointing a chief people officer

During the year, the Board agreed and

approved the appointment of a CPO at

Group level, which the company will

undertake in 2025/26.

How the Board made its decision

With an increasing focus on maintaining

BTG’s culture in light of continued

company growth, the Board agreed the

need to appoint a CPO. Feedback from

employees, received during internal

audits, continues to highlight how

important the company’s strong,

collaborative and supportive culture

is– and what a key part of its attraction

and retention strategy it is.

This decision not only supports

employees but, in doing so, also drives

operational excellence, increasing sales

productivity, customer satisfaction and

repeat business. This directly benefits

BTG as well as its customers, suppliers

and vendors, and investors.

A CPO also allows us, as a Board, to

better support the development of the

next level of the company’s leadership –

senior management – which is a crucial

part of our succession planning for future

executive roles. A CPO will lead the work

here, taking responsibility for diversity

and succession planning among the

company’s senior leaders and wider

management team.

88 Bytes Technology Group plc

GOVERNANCE REPORT

Stakeholder engagement

Here we set out how, as the Board, we have engaged with and been influenced by the

interests of different stakeholders, as well as by the macroeconomic and environmental

factors that affect them. Our engagement activities are well established, as is our investor

community as a stakeholder group since the company’s listing in December 2020.

Our key stakeholder groups

Stakeholder

groups

How the Board stays informed What the Board has learnt is important

toour stakeholders

Employees

People are at the

heart of BTG’s

business and are

instrumental to its

continued growth

and success

• • Regular updates from the managing directors

andHR about talent and succession planning,

andemployee remuneration and benefits,

includingpensions.

• • Updates from management about career

development and BTG’s leadership coaching

programme, online staff feedback platforms,

quarterly whole-company meetings, eNPS surveys

and engagement with the leadership team.

• • Feedback, insights and ideas from Bytes and

Phoenix employees, including constructive

challenge about how management can improve.

Dental treatment is now included in Bytes’s

optionalemployee healthcare plan as a result

offeedback in 2023/24.

• • Direct email communication from the CEO to

employees during the year, and invitations for

various teams to brief her directly on their roles and

areas of work.

• • Visits by our new non-executive directors to the

Phoenix office to meet employees, and meetings

with senior leaders from Bytes and Phoenix.

• • Meeting between our new Audit Committee Chair

and members of the Group finance team to better

understand their systems and processes.

• • Town hall held at Bytes at which our Chair gave a

presentation and introduced the refreshed Board to

employees, and where the Board took questions

from employees and talked with them over an

informal lunch.

• • Monitoring the all-employee ShareSave scheme,

which this year saw the 2021 scheme mature,

enabling employees to exercise their shares.

• • Reports from our designated non-executive director

for employee engagement on the programme she

has developed to enhance the relationship between

employees and the Board. She also gave us

feedback from her site visits to Bytes and Phoenix.

• • Report from the company’s internal auditors on a

review of employee perceptions of BTG’s culture,

values and talent.

• • On accepting her new role, our CEO prioritised

learning from, and embedding herself, in the

widerbusiness.

• • Similarly, our new non-executive directors made

themost of their induction process, by taking

opportunities to familiarise themselves with the

business and its culture.

• • These efforts reinforced what we as a Board

knowwe must prioritise for BTG’s people:

փ Opportunities for professional development

andcareer progression

փ A safe, diverse and inclusive working culture

փ The ability to deliver market-leading solutions

toour customers.

• • Employees’ physical and mental health and safety

also remains a priority for us as a Board. We support

the culture of openness promoted by the leadership

team, particularly their direct interaction with

employees and their decision to implement an

anonymous incident reporting hotline.

• • We continue to support the company’s ongoing

employee programmes, such as offering health

support by partnering with an independent health

and wellbeing specialist.

• • We supported management’s decision to roll out

anEV scheme to Bytes this year, a scheme already

in place at Phoenix.

• • We reviewed the findings and recommendations

from our company culture review to understand

howemployees are feeling and to support

continualimprovements.

Annual Report and Accounts 2024

25 89

GOVERNANCE REPORT

Stakeholder engagement (s.172 compliance) continued

Stakeholder

groups

How the Board stays informed What the Board has learnt is important

toour stakeholders

Customers

Building trusted

relationships

withcustomers,

based on a deep

understanding of

their needs, is

critical to BTG’s

strategy

• • Feedback from BTG’s account and sales teams’

meetings with customers in person and at virtual

events, including tradeshows and conferences,

andthrough social media and podcasts.

• • Feedback and insights from management about

BTG’s clients’ strategies and future investment

plans, through contract reviews and feedback

fromthe company’s customer success teams.

• • Feedback from management’s interactions with

customers in roundtable and summit events, and

other events.

• • Annual customer experience survey, which is sent

tocustomers, requesting honest feedback. Results

are reported to the Board against the results of the

previous year to track progress.

• • Interactions between the CEO and customers about

what they want to see from BTG’s products and

services from an operational and sustainability

perspective. Major feedback is discussed with

management and the Board.

• • Customers valued the open and honest way our

CEO discussed the former CEO’s resignation

withthem.

• • Through direct customer feedback and events,

wecan prioritise what is most important to our

customers, such as:

փ Effective and cost-efficient technology sourcing,

adoption and management across software,

andsecurity and cloud services

փ Help to identify their software needs, select and

deploy appropriate software products, manage

licence compliance and, ultimately, optimise

theirsoftware assets

փ Guidance and expertise on emerging

technologies, especially AI and GenAI.

• • BTG often screens customers for reputational and

financial risks to identify issues that could damage

its reputation or finances, and flags any material

issues with us at Board level.

Suppliers

andvendors

BTG’s well-

established

relationships with

suppliers and

vendors helps

ittoprovide the

bestsolutions

andsupport for

employees and

customers

• • Updates from management keep us informed about

the major third parties with which the company does

business, including its suppliers, banks and

regulators.

• • Direct engagement with vendors and partners at

industry events, through specific company-directed

engagements and in interactions around solutions

and services. The CEO updates the Board on these

engagements.

• • Close engagements with suppliers and vendors

about changes within their programme and pricing

structures. They discussed how the company and

Board could best manage interactions and relations

with customers.

• • Long-standing relationships between our non-

executive directors and the industry, which includes

material vendors and partners that the Group works

with on a daily basis.

• • Based on these updates, the Board understands

how important to suppliers and vendors a close

andmutually beneficial relationship with BTG is.

• • The Board’s strategy and decision making are also

informed by developments in technology, which

highlight the importance of maintaining strategic

and trusted partnerships with the world’s most

successful software companies.

• • BTG screens all major third parties for

reputationaland financial risks to make sure

thereare no apparent issues that could damage

itsreputation orfinances, and flags any material

issues at Board level.

90 Bytes Technology Group plc

GOVERNANCE REPORT

Stakeholder

groups

How the Board stays informed What the Board has learnt is important

toour stakeholders

Investors

BTG’s investors

own the company

and have made

afinancial

commitment

toitssuccess

• • Insights from the regular engagement between the

CEO, CFO or members of the senior leadership

team with the company’s larger shareholders and

potential investors.

• • Regular market announcements and presentations

from the company, as well as feedback from

discussions with investors and through the

investorrelations section on BTG’s website.

• • Feedback from the executive directors’ in-person

and virtual roadshows that they hold following key

announcements, including the company’s full-year

and half-year results.

• • Insights from the follow-up one-to-one

conversations the executive directors hold with

investors and analysts following these

announcements.

• • Regular analysis of shareholder and analyst

sentiment and of peers.

• • Meetings between our Board Chair, CEO, CFO

andvarious investors to, this year, discuss finance,

strategy, AI and technology topics, and the

company’s growth – and to introduce our new

CEOto the market.

• • Availability of our Chair, senior independent director

and committee chairs to meet with shareholders

during the year.

• • Our AGM, which is a key opportunity for

shareholders and Board members to meet face to

face to discuss the company’s annual performance,

strategy and any other matters shareholders wish to

raise. We look forward to welcoming and meeting

shareholders at this year’s meeting.

• • As a Board, we understand that investors are

interested in a wide range of issues about BTG,

including the implementation of its strategy, and its

financial and operational performance, governance,

remuneration, M&A and other capital allocations.

• • The directors are aware of their duty to treat

members as a whole fairly, with Board decisions

taken with all members’ long-term interests in mind.

• • We maintained strong engagement with our

shareholders in 2024/25, introducing our refreshed

Board, including our new CEO and two new

Boardmembers.

Community and

environment

BTG recognises

that it is part of the

communities in

which it operates

and strives to make

a meaningful

contribution

tosustainable

environments

• • Briefings from management to keep Board

members informed that BTG’s operations, products

and services are aimed at not adversely affecting

the environment and positively contributing to the

communities in which the company operates.

• • Briefings on BTG’s sustainability programme and

progress against its ESG strategy, the objectives

ofwhich cover both BTG’s operating companies.

Briefings included updates on the rollout of a

carbon literacy awareness programme and

increasing uptake of volunteer days.

• • Updates on key developments in the company’s

sustainability work including receiving validation

from the SBTi of its sustainability targets and

improved scores from disclosures, including CDP

and the ISS ESG quality score and corporate rating.

• • We support the company to provide engaging

andwell-paid local employment.

• • We endorse how BTG encourages employees to

help charities and various social and environmental

causes – including matching charitable donations,

supporting employees’ fundraising events and

offering paid time to volunteer.

• • We also support the company to continue working

to minimise its impact on the environment, including

recent refurbishments that switched to LED lighting,

used less harmful refrigerant gases and installed

sensor taps.

• • In response to management’s carbon reduction

efforts, we continued to support a salary sacrifice

scheme to help employees participate in an EV

programme, which was rolled out to the entire

Group in the last year and promotes cleaner air

inour communities. We also endorsed capital

expenditure for solar panels at Phoenix’s office.

Annual Report and Accounts 2024

25 91

GOVERNANCE REPORT

Audit Committee report

Introduction from our Chair

Over the past year, the Audit Committee has continued to focus on

ensuring the Group has robust and appropriate systems in place to

manage risk, internal controls and external reporting.

I have been heartened

bythe strength of BTG’s

audit, risk management

and financial reporting

infrastructure – although,

of course, we will strive

tocontinually improve it.

Ross Paterson

I became Audit Committee Chair on

1 June 2024, taking over from Erika

Schraner who became Interim Chair in

March 2024, following the resignation

ofMike Phillips. Erika did a great job

ensuring that the committee continued

tooperate smoothly and effectively

duringher tenure.

Anna Vikström Persson also joined the

committee in June 2024 and Shruthi

Chindalur had become a member in

February 2024, while Erika’s continuing

committee membership and Patrick

DeSmedt’s regular attendance at our

meetings provided continuity throughout

the year. The fact that we have had the

same external auditors, EY, and the same

EY lead audit partner since BTG listed in

2020, also delivered valuable consistency

during a period of change on the Board

and the committee.

A good mix of skills

andexperience

Our committee has a good mix of relevant

skills and experience. Shruthi brings great

experience of the technology sector,

complementing that of Patrick and Erika.

Meanwhile, Anna’s track record in HR is

invaluable, with BTG being very much a

people business. Audit committees have

been part of my own professional life for

almost 30 years, in my roles as an auditor, a

finance executive, a company secretary, a

CFO and an audit committee chair of listed

and unlisted companies. This gives me an

understanding of ‘both sides of the fence’:

an awareness of the pressures faced by the

CFO and their team, particularly in regard

to the ever-increasing tide of regulation,

and an understanding of the role and

significance of the audit committee.

On getting to know BTG’s business, I have

been heartened by the strength of its audit,

risk management and financial reporting

infrastructure – although, of course, we

will strive to continually improve it.

This year, as generally, the committee

concentrated on the core areas I discuss

here: financial and narrative reporting,

internal control and risk management

systems, compliance and fraud, and

internal and external audits.

The broadening of reporting

toencompass ESG issues

Overseeing BTG’s annual and half-year

reporting this year included a reasonable

focus on preparing for IFRS S1 and S2,

the new standards in the ESG sphere.

These are expected to come into force for

UK companies in 2026, meaning we will

be in scope for our financial year 2026/27.

As well as preparing for the new

regulations, we have been intent on

ensuring that BTG is mindful of the ESG

opportunities and risks it faces.

The Audit Committee works closely with our

new ESG Committee in preparing forthe

new regulations. It’s helpful for dovetailing

the committees’ remits that I sit on both,

as does Anna, who is the ESGCommittee

Chair. As one might expect, while the ESG

Committee hasabroad remit (see pages

106 to 107), the AuditCommittee’s main

concern here isto ensure BTG reports

ESG information accurately.

92 Bytes Technology Group plc

GOVERNANCE REPORT

Preparing to declare the

effectiveness of material controls

Another key focus has been preparing for

provision 29 of the revised UK Corporate

Governance Code, which, from the

year ending 28 February 2027, will require

BTG to comment on the effectiveness of

our material controls. PwC has been

helping us identify which internal controls

should be considered material – aligned

to our principal risks – as a prelude to

testing their effectiveness and to making

our declaration. One of PwC’s specialist

teams is carrying out this work, which is

independent of its internal audit function.

As well as ensuring we are prepared for

provision 29, we are using this exercise as

an opportunity to further enhance our risk

management structure.

Ensuring readiness for

compliance and fraud regulations

We have also been reviewing our controls

and processes in readiness for the new

corporate criminal offence of failure to

prevent fraud, which comes into force on

1 September 2025. Once again, we’re

using the new legislation as a catalyst to

assess and, if necessary, improve our

anti-fraud systems.

On compliance and fraud, we reviewed

and revised our whistleblowing policy,

making it less legalistic and more

accessible.

A good year with our internal

andexternal audit teams

We continue to work well with, and be

pleased with the contribution of, our

internal auditors, PwC, and our external

auditors, EY.

While still reviewing traditional internal

audit areas of interest, such as payroll

andpurchasing, this year the PwC team

continued to broaden its range of work.

For example, it led focus groups at

Bytes’s and Phoenix’s offices, to gain

insights into employees’ perception of

ourcorporate culture. The findings were

discussed at both the Audit Committee

and the Board and will influence BTG’s

approach to developing Group-wide best

practice. PwC also reviewed our

approach to ESGissues.

In other internal audit work, PwC is

reviewing the implementation of new

accounting systems at Bytes and

Phoenix, which are scheduled to go live

this spring, to provide further assurance

before they are used for reporting our

2025/26 half-year results.

The lead PwC partner reports directly

tothe Audit Committee. Before PwC’s

findings are presented to us, they are

reviewed by the relevant teams to ensure

they are accurate and complete. This year,

to ensure BTG is rigorous in reviewing and

acting on PwC’s recommendations, the

business strengthened accountability for

monitoring and ensuring follow-up of

internal audit recommendations.

EY has continued as BTG’s external

auditor. In the coming year, our EY audit

will be led by a new partner, since James

Harris has completed his five years in the

role. I know I speak for all my Board

colleagues in thanking James for his

commitment and expertise in steering our

audit over the past five years, and

particularly for his support during last

year’s more challenging audit process.

Both Andrew Holden, our CFO, and I met

James’s successor, Anup Sodhi, after EY

first nominated him as our new lead

partner. We were both satisfied with our

meetings, so his appointment was

supported by the Audit Committee and,

on our recommendation, by the Board.

I am also pleased that we will retain

continuity with BTG’s wider EY team

members after James stands down.

Thiswill ensure that we have the fresh

perspective of a new audit partner

combined with the knowledge offered by

the existing team familiar with the business.

The committee again oversaw the

questionnaire-based evaluation of our

external auditor, reflecting the Financial

Reporting Council’s (FRC’s) Minimum

Standard for Audit Committees. The

standard, while not yet mandatory, asks

audit committees to consider the culture

of their auditor (among other usual

matters, such as the skill, quality and

robustness of the audit). We concluded

that we remain confident in EY’s

independence, effectiveness and ability

to provide rigorous review and challenge.

In light of the efficiency and quality of the

audit, and what we see as the benefits of

continuity, we have recommended that

the Board presents a resolution to

shareholders to reappoint EY for 2025/26.

We approved EY’s work plans and

estimated fees for 2024/25 ahead of this

year’s audit. A full breakdown of the firm’s

fees, for audit and non-audit services, for

this year and for 2023/24, is on page 97.

Continually improving our

governance to support growth

BTG has delivered another set of

excellent results. In the coming year, the

Audit Committee will continue to work to

improve our processes and controls to

support greater efficiency and oversight,

to retain shareholder trust and to help the

Group maintain the secure foundations

toprosper.

Ross Paterson

Audit Committee Chair

12 May 2025

Annual Report and Accounts 2024

25 93

GOVERNANCE REPORT

Audit Committee report continued

Significant issues considered in relation to the financial statements

Accounting judgements

Issue Key uncertainties and judgements Review and challenge by the committee Conclusion

Revenue recognition

Misstatement of revenue

recognised at or near

the year end

The Group transacts high

volumes of customer orders

across multiple vendor

products and many

software licensing

programmes.

Within each income stream,

management has made

judgements focused on

determining when the

Group’s performance

obligations are satisfied and

the point at which revenue

should be recognised,

including the accounting

foraccrued and deferred

revenue. This is most

sensitive at or near the

year end.

As new product areas and licensing

programmes are introduced by vendors, the

Group reviews its revenue recognition policy at

least annually to ensure that it is being applied

appropriately and consistently across the Group.

During the year, the committee engaged with

management in its assessment of the policy,

and to understand whether any new revenue

streams have been introduced.

The Board received detailed monthly reports

from management on business performance,

which include revenue and gross profit trends

against budget and previous periods, to help

identify anomalies that may indicate a mismatch

of revenue and costs.

The committee concluded

that there is a consistent

understanding and

application of the revenue

recognition policy across

the Group, with processes

in place to minimise

cut-off errors that

mayresult in revenue

being reported in the

wrong period.

Incentives receivable

Misstatement of

incentives receivable

inthe reported results

The Group receives

significant incentive income

across multiple vendors

andschemes, including

rebates and fees relating to

transactions and activities it

carries out. These give rise

to large receivable balances

(totalling £5.6 million at

28 February 2025), because

payments are received up to

90 days following the

year end. Judgement is

therefore required by

management to estimate

the Group’s incentives

receivable at the end of the

financial year.

As vendor schemes evolve and new ones

areintroduced, the Group must ensure

consistency in determining the incentive

recognition triggers aligned to completion of

itsperformance obligations across schemes

and from year to year.

The committee reviewed the Group’s policy

andprocedures in relation to recognising

supplier and vendor incentives through the

yearand at the year end, and discussed with

themanagement team any significant changes

to incentive schemes during the year.

The committee concluded

that the Group has

appropriate knowledge

and processes in place to

ensure incentives are

accurately and completely

accounted for in the

correct period, including

materially accurate

estimates of the

incentives receivable at

the year end.

Accounting for new

property purchase

Assessment of

appropriateness

ofaccounting treatment

to classify the new

buildings as owner-

occupied property,

plantand equipment

rather than as

investment property

During the year, the Group

purchased property (two

buildings directly adjacent

to its main office in

Leatherhead). This new

property is intended for the

immediate and future use of

the Group to provide

additional capacity in line

with its current and

continued organic growth.

Given there are a number of

tenants within the property

at the purchase date with

rental leases expiring over

the next few years,

management has reviewed

IAS 16 Property, Plant and

Equipment (PPE) and IAS

40 Investment Property to

determine the appropriate

accounting treatment.

The committee reviewed and discussed with

management its assessment that the property

be accounted for as owner-occupied, noting

key considerations that:

• • The buildings will be owner-occupied with

refurbishment and phased occupation in line

with growth

• • The property is not held for the primary

intention of earning rental or for capital

appreciation or both. While the property will

generate rental income for the Group initially

from the existing tenants, the intention of the

acquisition is for full occupation by the Group

in the long term.

The committee concluded

that the Group has

correctly interpreted and

applied the requirements

of IAS 16 and IAS 40 to

ensure that the property

purchase has been

correctly accounted for as

owner-occupied at the

end of the financial year.

94 Bytes Technology Group plc

GOVERNANCE REPORT

Strengthening our financial

reporting and internal controls

This year, the committee focused on

several significant areas of financial

reporting and internal control, including

financial, operational and compliance

controls. For example, we:

• • Reviewed BTG’s financial statements

and assessed whether suitable

accounting policies were adopted

andwhether management made

appropriate estimates and

judgements

• • Reviewed the detailed scenarios

andassumptions behind the going

concern basis of accounting and

longer-term viability

• • Monitored the effectiveness of BTG’s

enterprise risk management and

internal control systems, and received

detailed reports and presentations

onprincipal risk tolerance levels

andmanagement

• • Oversaw the implementation of the

internal audit plan for 2024/25 and

approved the new plan for 2025/26

• • Continued to support the strong

finance leadership team, with insights

from PwC’s internal audit experience

within BTG and from other

organisations

• • Reviewed the progress around

implementing the new accounting

system in Bytes and upgraded

accounting system in Phoenix,

aheadof them going live in 2025/26

• • Reviewed the Annual Report and

Accounts 2024/25 and half-year

results for the six months to

31 August2024

• • Monitored the implementation of

improved controls for share dealings

and share register analysis, with

continued monitoring of the

ongoingprocess.

Membership

At the year end, the Audit Committee

comprised four independent non-

executive directors who have a

combination of recent and relevant

financial experience and competence in

accounting, risk management and

governance. As a whole, the committee

has expertise that is relevant to the

technology sector in which BTG operates.

Ross Paterson as Audit Committee Chair

is a qualified chartered accountant with

extensive listed-company board

experience as a CFO and non-executive

director. Erika Schraner has recent

relevant financial experience as a result

ofher previous executive work and her

roles as chair of the audit committee of

UK-listed companies, and considerable

technology sector experience. Shruthi

Chindalur and Anna Vikström Persson

also have considerable expertise across

multiple sectors.

For the purposes of the code, Ross is

currently the designated financial expert.

Biographies for all the committee

members are set on out pages 78 to 79.

Following Mike Phillips’s resignation from

the Board as an independent non-

executive director on 24 March 2024, we

were not compliant with provision 24 of

the code until 1 June 2024, because the

Audit Committee only comprised two

independent non-executive directors

(Erika Schraner and Shruthi Chindalur)

during that time. At this date, two new

independent non-executive directors

joined us: Ross Paterson as Audit

Committee Chair and Anna Vikström

Persson as a member of the

AuditCommittee.

How the committee operates

Our committee generally meets on the

same day as Board meetings, to make

interacting with the other directors as

efficient and effective as possible. Our

external auditor, EY, and internal auditor,

PwC, are invited to attend our meetings,

as are the other members of the Board

and the Group Company Secretary.

Depending on the agenda, other members

of senior management are also invited.

During 2024/25, we met seven times.

Thesemeetings include those held

approximately one week before our main

half-year and year-end results meetings

to consider reports from the auditors and

management teams. This ensures that any

material aspects relating to the results are

raised and addressed by the committee in

an efficient way.

The Board receives monthly financial

reports for BTG and, at each Board

meeting, the CFO provides a written and

verbal report on our financial performance

and outlook. This gives members a good

understanding of the Group’s financial

performance and a platform to ask

questions and challenge management.

Additional financial information and

management reports are provided around

financial reporting periods.

This year we benefited from a series of

meetings with key members of the

management teams of Bytes and Phoenix,

as part of Board engagement sessions.

Our committee has reviewed and

approved its terms of reference, which

were set on 30 November 2020 as part of

the IPO process, and these were last

updated on 27 February 2025. We have

also agreed a schedule of items for each

of our planned meetings for the 2025/26

financial year, with two of these dedicated

to risk management.

Committee attendance

Committee member

For the financial year to

28 February 2025

Ross Paterson

4/4

Erika Schraner

7/ 7

Shruthi Chindalur 7/ 7

Anna Vikström Persson

4/4

Mike Phillips

n/a

1 Appointed and Chair from 1 June 2024.

2 Interim Chair from 25 March to 31 May 2024.

3 Appointed 1 June 2024.

4 Chair and member until 24 March 2024. There were

nomeetings held from 1 March 2024 to the date

ofresignation.

Annual Report and Accounts 2024

25 95

GOVERNANCE REPORT

Audit Committee report continued

Responsibilities

During the year, the Audit Committee

reviewed its current practices against

thenew Minimum Standard for Audit

Committees and confirmed it is fulfilling

its responsibilities, as set out below.

The committee’s principal

responsibilities, as delegated by the

Board, remained unchanged this year.

They include oversight, assessment

andreview of:

Financial statements and reporting

• • The integrity of BTG’s financial

reporting as a whole and any formal

announcements relating to its financial

performance, including any significant

judgements contained in them

• • BTG’s assessment of its going

concern and longer-term prospects

and viability

External auditor

• • The effectiveness of the external

auditprocess, with consideration

ofrelevant UK professional and

regulatory requirements

• • Developing and implementing policy

on the supply of non-audit services by

the external auditor and approving

relevant work

• • Obtaining comfort that the external

auditor is independent and objective

Internal auditor

• • The relationship with the internal

auditor, advising on its effectiveness

• • Considering and approving the

internal audit review plan, the

outcome of audit reviews and

associated actions

Risk management and internal

controls

• • The effectiveness of BTG’s internal

financial controls, risk management

and internal control systems,

including the activities of the internal

audit function, and supporting an

agenda of continuous improvement

• • Reviewing BTG’s finance and risk

management policies for ensuring

regulatory and legal compliance

• • Identifying and assessing principal

and emerging risks and risk exposures

• • The effectiveness of anti-fraud

andanti-bribery systems, and

whistleblowing arrangements where

employees and third parties can raise

concerns in confidence.

Other responsibilities

As well as these responsibilities,

thecommittee:

• • Supports the Board in discharging

itsresponsibilities to comply with

thecode

• • Advises the Board on proposed

full-year and half-year financial results

and periodic reporting, and related

announcements

• • Reviews the annual and half-year

financial statements and accounting

policies, and internal and external

audits and controls

• • Recommends to the Board the

payment of final, interim and special

dividends

• • Assesses the effectiveness of

financial reporting procedures

• • Advises the Board on the outcome

ofthe external audit and whether it

considers that the Annual Report and

Accounts, when taken as a whole, is

fair, balanced and understandable

and provides the information

necessary for shareholders to assess

BTG’s position and performance,

business model and strategy

• • Makes recommendations to the Board

on the appointment, reappointment or

removal of the external or internal

auditors

• • Approves both the external and

internal auditors’ fees and terms of

engagement

• • Maintains strong relationships with

theBoard, executive management

and the external and internal auditors

in the execution of their respective

responsibilities

• • Reports to the Board on how the

committee has discharged its

responsibilities during the year.

External auditor

The external auditor is a key stakeholder

in helping the committee fulfil its oversight

role for the Board.

For its core audit work, during the year EY

presented to the committee its detailed

audit plan for 2024/25, which outlined its

audit scope, planning materiality and

assessment of key audit risks. The

committee also received reports from EY

on its assessment of the accounting and

disclosures in the financial statements,

including observations around financial

controls where identified, and was

satisfied that the audit work remained

appropriate to BTG’s business.

EY attends each committee meeting,

receiving all committee papers in

advance and, during the year, the

committee met with EY without

management present. Outside formal

meetings, EY’s audit partner, James

Harris, had direct access to the

committee Chair throughout the year and

continues to do so, to raise any matters of

concern or clarification. This enables

efficient engagement.

In addition, two workshop sessions were

held during the year between BTG’s

finance team and the external auditor

– and one was attended by the committee

Chair. These were good opportunities for

proactive teamwork and for sharing

knowledge of our business, processes,

policies and lessons from previous audits,

and to support an efficient 2024/25 audit.

Our committee approved EY’s fees for the

external audit with the total recurring fee

element increasing from £766,822 in

2023/24 to £808,026 in 2024/25,

representing an increase of 5.4% and

reflecting an inflationary rise in EY’s

underlying costs.

Both years also included an element of

non-recurring fees. The higher amount in

2023/24 was substantially in connection

with the two investigations into unreported

share dealings and associated

governance matters, which totalled

£415,000. The rest of the non-recurring

fees in 2023/24 covered EY’s review of

the minority interest investment in

technology company Cloud Bridge.

96 Bytes Technology Group plc

GOVERNANCE REPORT

The lower level of non-recurring fees in

2024/25, totalling £62,510, includes EY’s

review of BTG’s software capitalisation,

changes in vendor incentive

arrangements, the new payroll system at

Phoenix and the consolidation system at

Group level, as well as some follow-on

costs relating to the previous year’s

corporate governance issue.

The committee assesses the quality,

effectiveness, objectivity and

independence of EY’s annual audit,

andseeks feedback from the Board.

Thecommittee concluded that EY

hadprovided appropriate focus and

challenge throughout the audit and had

remained objective and independent.

Thecommittee once again recommended

EY’s reappointment as BTG’s auditor

andthat the directors determine its

remuneration. This will be proposed

atthe2025 Annual General Meeting.

Non-audit services

It is the Board’s policy that all proposals

from EY for any non-audit services must

be approved in advance by the committee

and must not be prohibited by the FRC’s

Revised Ethical Standard 2019. EY may

only provide such services if its advice

does not conflict with its statutory

responsibilities and ethical guidance. The

committee is aware of the requirements of

the Statutory Auditors and Third Country

Auditors Regulations 2016. The regulations

cap non-audit services in any financial year

at less than 70% of the average audit fees

paid on a rolling three-year basis.

The ratio between audit and non-audit

services performed by EY during the year

was 7.3:1 (2023/24: 10.7:1), and non-audit

services in the year were 12.1% compared

with the cap of 70%.

Audit risks and areas of focus

As part of its audit planning process, EY

advised our committee of the key audit

risks and other areas of audit focus.

Key audit risks

• • Misstatement of revenue recognised

at or near year end

• • Management override of controls

• • IFRS 15 revenue presentation and

disclosure in respect of principal

versus agent

• • Misstatement of rebate receivable at

period end and recognition of vendor

incentives

Other areas of audit focus

• • Going concern and viability

• • Accounting for share-based payments

• • Impairment of goodwill

• • Software capitalisation

• • Accounting for property purchase

Our committee has the authority to

request that additional areas are reviewed

should the need arise.

Working with the external auditor

The committee approved EY’s terms of

engagement and reviewed the

effectiveness of the external audit

through the year-end reporting period.

We assessed the auditor’s performance,

based on our evaluation and feedback

from senior members of BTG’s finance

team, across a range of relevant topics.

We concluded that the auditor showed

appropriate focus, critical analysis and

challenge on the key audit areas and

applied robust challenge and scepticism

throughout the audit. We recommended

to the Board, which, in turn will

recommend to shareholders in a

resolution at our 2025 Annual General

Meeting, that EY should continue as

external auditor.

The external auditor reported to the

committee on its independence from

BTG, in line with all UK regulatory and

professional requirements, and confirmed

that the objectivity of the audit partner

and staff is not impaired. The committee

also confirmed that BTG has adequate

policies and safeguards to ensure EY

remains objective and independent.

Internal controls and risk

management systems

The management of risk is treated as a

critical and core aspect of our business

activities. Although the Board has

ultimate responsibility for establishing

and maintaining BTG’s internal control

and risk management systems – ensuring

the Group has robust risk identification

and management procedures in place

– certain risk management activities are

delegated to the level that is most capable

of overseeing and managing the risks. On

behalf of the Board, the committee keeps

the adequacy and effectiveness of the

company’s internal financial controls and

risk management systems under review,

and assesses and approves the Annual

Report statement concerning internal

control and risk management. This

includes assessing principal and

emerging risks and the viability statement.

As part of its internal audit this year, PwC

confirmed to the committee that BTG’s

internal controls have been appropriately

documented for the areas reviewed.

External auditor fees

2024/25 2023/24

Consolidated Group and parent company £289,542 £268,281

Subsidiary audits £413,315 £3 97,417

Half-year review (non-audit services) £105,169 £101,124

Total recurring fees £808,026 £766,822

Non-recurring (investigation reviews) £– £415,000

Non-recurring (other) £62,510 £5,000

Total non-recurring fees £62,510 £420,000

Total fees £870,536 £1,186,82 2

Annual Report and Accounts 2024

25 97

GOVERNANCE REPORT

Audit Committee report continued

For more on our risks and mitigation and

our risk management framework, see the

Risk report on pages 48 to 56. To gain a

comprehensive understanding of the risks

facing the business and management,

thecommittee periodically receives

presentations from senior managers

andexternal advisors.

We have also followed the code’s key

requirements on risk management and

control. For example, this year, as the

code requires, the Board has:

• • Continued to implement our

enterprise risk management

framework and policy

• • Carried out a robust assessment of

our risk appetite, and principal and

emerging risks

• • Confirmed that we have completed

this assessment in our Annual Report,

along with describing our principal

risks and indicating how we identify

emerging risks and manage or

mitigate risks

• • Monitored and reviewed the

effectiveness of our material risk

management and internal control

systems and summarised this

effectiveness review in our

AnnualReport.

Assessing our principal risks

twicea year

The Board carries out a robust

assessment of BTG’s principal risks twice

a year. This considers the risks that could

threaten our business model, future

performance, solvency or liquidity, and

the Group’s strategic objectives over the

short to medium term. Our principal risks

are documented in a schedule that

includes a comprehensive overview of the

key controls in place to mitigate the risk

and the potential impact on our strategic

objectives, KPIs and business model.

Given its importance, changes to BTG’s

risk register can only be made following

approval from the committee or the

Board. We outline changes to the

principal risks during the year on page 50.

Risks that are not principal to BTG are

documented within the risk registers of

our two primary subsidiaries, which are

overseen by the Executive Committee.

The Audit Committee received updates

on material aspects relating to these risk

registers at intervals during the year. In

addition, risks that are considered key

indicators of changes in BTG’s risk profile,

or deviation from the Board’s risk

tolerance level, are identified and

reported to the committee.

Following our review, the committee

confirmed to the Board that it is satisfied

BTG’s internal control and risk

management procedures operated

effectively throughout the period and are

in accordance with the FRC’s Guidance

on Risk Management, Internal Control and

Related Financial and Business Reporting.

The committee continues to use the

Group’s enterprise risk management

framework and policy and its risk appetite

framework. Our enterprise risk

management approach determines our

overall principles, requirements and

responsibilities for a sound approach to

risk management and an effective and

continual internal control assurance

framework within the business.

The committee also assessed the Group

risk register – which consolidated the risk

registers of BTG, Bytes and Phoenix –

during the year. This included the

underlying methodologies, inherent risk

scores of the identified risks and what

mitigation, if any, could be applied to the

inherent risk scores depending on the

classification of green, amber and red.

Green (low) risks can be accepted without

mitigation, amber (medium) risks should

be mitigated where possible and red

(high) risks must be mitigated as much as

possible. Once mitigations are taken into

account, management scrutinises the

netred risks to determine if they are

compatible with the Group’s risk appetite.

Our committee formally reviews the

Group risk register twice a year to identify

the likelihood and business impact of any

material or emerging risk, as well as any

mitigating factors or controls. A robust

assessment of the principal and emerging

risks facing the Group was carried out

bymanagement – and reviewed and

incorporated into the register by the

committee – during the year.

The boards of directors of Bytes and

Phoenix have implemented internal

controls and processes to deliver

financial control and reporting, including

controls incorporated into their

underlying systems. On a day-to-day

basis, the Group system of internal

control is managed and coordinated by

our CFO.

At our meetings in October 2023

andFebruary 2024, the committee

considered the process by which

management evaluates internal controls

across the business. IT security risk, in

respect of data security breaches around

the Group’s own data and that held on

behalf of third parties, remained a key

theme. So too did the broader and

continuing challenges in the

macroeconomic environment.

Our business continuity plans for Bytes

and Phoenix remain robust. We continue

to embed an annual business continuity

plan management cycle as part of our

overall risk management process, to

track, review and evolve our plans.

For 2025/26, the Board at the

recommendation of the Audit Committee

agreed that the following areas of risk

remain relevant and should be reviewed

and assessed:

• • Cybersecurity risk of breaches of

BTG’s own data and that held on

behalf of third parties

• • Factors linked to high interest rates,

supply chain constraints and

geopolitical uncertainty – given their

significant impact on the global

economy, customer behaviours and

associated cash flows, and the

carrying amount of assets and

projected future cash flows in the

context of going concern and

impairment assessments

• • People- and culture-related risks,

inparticular the ability to continue

toattract and retain talented people

orto maintain the unique nature of

ourculture

• • Increasingly competitive environment

and evolving vendor landscape

• • Non-compliance- and governance-

related risks.

98 Bytes Technology Group plc

GOVERNANCE REPORT

Going concern and viability

statements

The committee considered BTG’s going

concern and viability statements at our

meeting in May 2025. We also challenged

the nature, quantum and combination of

the unlikely but significant risks to our

business model, future performance,

solvency and liquidity, which were

modelled as part of the scenarios and

stress-testing for our viability statement.

As part of this review, we:

• • considered our financial forecasts

position to the end of August 2026 for

going concern and over the next three

years for viability

• • conducted a principal risk assessment

• • analysed the impact of sensitivities on

cash and available funding,

individually and collectively, in a

reasonable worst-case scenario.

These scenarios considered the

mitigating actions we could take.

We are satisfied that our going concern

statement, on page 134 of the Directors’

report, and our Viability statement, on

pages 73 to 74 of the Strategic report,

have been prepared appropriately.

Internal audit

Our internal audit function’s main task is

to provide independent assurance about

the adequacy and effectiveness of the

Group’s internal controls and risk

management systems.

This year marked PwC’s third full year as

BTG’s internal auditor and once again the

committee reviewed and approved the

internal audit charter. This provides the

framework for how internal audit is

conducted in BTG and was created to

formally establish its purpose, authority

and responsibilities. The committee

approved the internal audit plan for

2024/25, designed to support BTG’s

organisational objectives and priorities

and to identify the risks that could prevent

the Group from meeting those objectives.

PwC carried out six audit reviews across

our two primary subsidiaries covering:

• • Talent retention

• • Payroll (Bytes)

• • Payroll (Phoenix)

• • Budgeting/forecasting

• • ESG

• • Cybersecurity.

While these identified certain areas for

continued improvement, PwC found no

material issues or areas of concern.

Before each review, PwC holds a planning

meeting to understand the context, key

stakeholders, audit objectives and

timeframes. Together with our CFO, it also

reviews areas of particular importance to

the committee to ensure the scope of the

audit meets the committee’s expectations.

So that we can continually improve our

internal audit processes, PwC considers

a range of feedback and issues as part of

its planning process each year. This

includes gathering views from our senior

executives and managing directors of our

two primary subsidiaries, as well as

considering previous areas of internal

audit focus and their results, and the

mostsignificant risks that we face as

anorganisation.

Following up on internal

auditreviews

The committee receives a report on

internal audit activity at each scheduled

meeting and monitors the status of

internal audit recommendations and

management’s responsiveness to their

implementation. The committee keeps

other Board committees updated on the

outcome of any reviews that fall within

their areas of responsibility. To ensure

management completes actions from

internal audit reviews in a timely manner,

PwC follows up on the completion and

implementation of critical, high and

medium findings after their nominated

completion date and examines

supporting data to validate the

information provided. PwC also carries

out follow-up reviews with management if

unsatisfactory conclusions are reached.

We will continue to strengthen the way we

monitor actions following internal audits.

The committee approved the internal

audit plan for 2025/26 at our meeting in

February 2025. It includes five planned

reviews covering:

• • The new accounting systems at Bytes

(Oracle Netsuite) and Phoenix (Sage

Intact), in two separate reviews

• • Readiness of Bytes’s newly developed

Next Gen platform

• • Fraud risk assessment aligned to the

new corporate criminal offence of

failure to prevent fraud in the

Economic Crime and Corporate

Transparency Act 2023 (ECCTA)

• • Company-level controls.

Annual Report and Accounts 2024

25 99

GOVERNANCE REPORT

Audit Committee report continued

Effectiveness review of the

internalauditor

As planned, we conducted a formal

review of the effectiveness of the internal

auditor and internal audit process

following year end. The review looked at

several areas, including the qualifications

and expertise of PwC’s team, the depth

and breadth of our internal audits, and the

quality of planning.

Overall, the committee is satisfied with

the way PwC manages our internal audit

function. The team’s extensive combined

experience means it can draw on

subject-matter expertise from within the

wider PwC ecosystem. It also meets with

the senior BTG team each month to

understand the changes and challenges

in the business and engages with the

committee Chair ahead of committee

meetings. PwC also meets regularly with

our external auditor to exchange

knowledge on the risk and control

environment and to coordinate plans

where appropriate.

At the start of any review, PwC holds

scoping meetings with key stakeholders

to agree the depth and breadth of the

internal audit, and to ensure the scope

covers the risks identified during the

planning stage while focusing on the most

relevant areas. All significant audit

findings remain ‘open’ until approved by

our CFO with input from the committee.

Reporting

As part of BTG’s financial reporting cycle,

it is the committee’s responsibility to

review the quality and appropriateness

ofthe annual and half-year financial

statements with the management team

and external auditor. For the period under

review, we focused on:

• • The quality, appropriateness and

completeness of our significant

accounting policies and practices and

any resulting revisions

• • The reliability of processes underlying

the integrity of our financial reporting

• • The clarity, consistency and

completeness of our disclosures,

including compliance with relevant

financial reporting standards and

other reporting requirements

• • Significant issues where management

judgements and/or estimates were

material to our reporting, or where

discussions took place with the

external auditor to reach a judgement

or estimate

• • The committee’s advice to the Board

on the long-term viability statement.

The committee received reports from

management on the identification of

critical accounting judgements,

significant accounting policies and the

ongoing application of accounting

standards in financial year-end reporting.

Fair, balanced and

understandable statement

The committee considered this Annual

Report as a whole, and the processes and

controls underlying its production, in light

of the requirement that it must be fair,

balanced and understandable. This

included making sure that we addressed

the following areas:

Process

• • All team members involved in the

process were properly briefed on the

fair, balanced and understandable

requirement

• • The core team responsible for

coordinating content submissions,

verification, detailed review and

challenge had the necessary

experience to carry out their work well

• • The committee received drafts early

enough to review and comment in a

timely manner

Content

• • The report includes accurate key

messages, market and performance

reviews, principal risks and all other

financial and narrative disclosures

required for good corporate

governance

• • The report is balanced in describing

potential challenges and

opportunities and includes relevant

forward-looking information

100 Bytes Technology Group plc

GOVERNANCE REPORT

• • Information in the different parts of

thereport is consistent

• • The report is written concisely, without

unnecessary verbiage, and avoids

jargon as far as possible

• • Senior management confirmed that

they believe that the information

included about their respective areas

of responsibility is fair, balanced and

understandable.

On the basis of this review, we

recommended to the Board that this

Annual Report is indeed fair, balanced

and understandable, and gives readers

the information they need to assess the

Group’s position and performance,

business model and strategy.

Looking forward

During 2025/26, our committee will

remain focused on the key areas of

responsibility delegated to it by the

Board, which include:

• • Continuing to seek appropriate

assurance, with a particular focus

onBTG’s principal risks, control

environment and approach to

financialreporting, taking into

accountdevelopments in reporting

responsibilities and the ongoing

consideration of TCFD and other

climate-related reporting

requirements

• • Monitoring progress on the

implementation of the new

systemsinBytes and Phoenix

• • Monitoring BTG’s preparations for the

new provision 29 in the code relating

to the effectiveness of material

controls, which will come into effect

for BTG’s financial year ending

28 February 2027

• • Monitoring BTG’s preparations for the

new ECCTA regulations, which are

effective from September 2025

• • Reviewing the external audit strategy

coming into EY’s sixth year as

BTGauditor

• • Supporting BTG’s continuing

governance improvement initiatives.

We welcome questions from shareholders

about the committee’s activities. If

youwish to discuss any aspect of this

report, please contact us through our

GroupCompany Secretary at

wk.groenewald@bytesplc.com.

Annual Report and Accounts 2024

25 101

GOVERNANCE REPORT

Nomination Committee report

Introduction from our Chair

In a busy year for the committee, we welcomed two new directors and our permanent

CEO, and ensured we had a balanced mix of skills and knowledge among our Board

members to provide the right support and challenge to the executive team.

BTG ended the

financialyear with a

strong, collaborative

Board, who have

acomplementary

skillsetand a shared

commitment to the

Group’s strategic

ambitions.

Patrick De Smedt

Our committee’s primary duty this year

was to formalise the Board changes

thatBTG announced around the end

of2023/24. As I mentioned in my

introduction to governance, Sam Mudd

was appointed CEO on 10 May, having

become Interim CEO in February 2024

following the resignation of former CEO,

Neil Murphy.

Sam was appointed after a benchmarking

exercise against strong external

candidates, led by executive search

partner Odgers Berndtson. As part of

thisrigorous process, Sam took part

inpsychometric tests, a 360-degree

assessment, and a review of her leadership

strengths and development areas.

Welcoming our new

non-executive directors

Three weeks after Sam took up her post,

our two new non-executive directors,

Anna Vikström Persson and Ross

Paterson joined the Board, on 1 June

2024. Anna and Ross bring invaluable

skills and experience. Anna was formerly

chief human resources officer of FTSE

100 company Pearson plc, and Ross

chairs the audit and risk committee of

another FTSE 100 business, The Unite

Group, and is a former CFO of

Stagecoach Group.

Anna’s recruitment satisfied a need we

had identified for a Board member with

strong HR experience, while Ross’s

appointment was prompted by the

requirement for a permanent Audit

Committee Chair. Their capabilities

complement those of our Board

colleagues, with the full Board now

providing the right balance of skills and

experience to support and challenge

ourexecutive directors and the wider

management team in delivering

ourstrategy.

Anna became Chair of our new ESG

Committee and a member of this

Nomination Committee and our Audit

andRemuneration Committees. Ross

became Chair of our Audit Committee,

succeeding Dr Erika Schraner, who

served as Interim Audit Committee Chair

for part of the year. Ross also joined our

committee, as well as the ESG and

Remuneration Committees.

Odgers Berndtson once again supported

us with the appointment of the new

non-executive directors, carrying out

initial vetting and interviews before

shortlisting two strong candidates for

both Anna’s and Ross’s roles. As well as

receiving candidate suggestions from our

executive search partners, we received

recommendations from our directors and

the 350 Club, an online community for

FTSE 350 board members. Board

members met each of the shortlisted

candidates before the committee

recommended Anna’s and Ross’s

appointments.

UK Corporate Governance

Codecompliance

These two appointments brought us back

to full compliance with the UK Corporate

Governance Code 2024, following two

months in which we did not comply with

provisions 24 and 32. Ross’s appointment

as Audit Committee Chair and Anna’s as

an Audit Committee member mean we

comply with provision 24, while their

appointments to the Remuneration

Committee mean we comply with

provision 32.

102 Bytes Technology Group plc

GOVERNANCE REPORT

Our Board composition also reflects good

practice on diversity. Women make up

57% of our Board, well above the FCA’s

UK Listing Rules requirement of at least

40%. The Board also has two directors

from an ethnic minority background,

compared with the FCA requirement of

one, and two of our senior roles are held

by women, against the requirement for at

least one.

Prioritising governance training

for directors

The committee continued to prioritise

governance training and education for

directors. This is essential, both to remind

Board members of their regulatory

responsibilities and to keep them up

todate with the ever-changing

governance requirements.

Some training is mandatory. During this

year, for example, directors completed two

online training sessions on market abuse

regulations. They must also sign up to the

Deloitte Academy, which offers briefings,

webinars and seminars on governance

and other Board-related matters. Our

directors also drew on the Academy’s

orsimilar governance resources.

Our committee arranged a programme

ofdevelopment events, including

presentations on corporate governance

by our legal counsel, Travers Smith, and

our external auditors, EY. Travers Smith

also delivered a session on market abuse

regulations. More widely, Board members

received updates on market and industry

trends and on new audit and sustainability

reporting requirements.

Our Group Company Secretary logs every

individual director’s training session.

Bringing new directors up

tospeed

Our committee prepared comprehensive

induction programmes for both our new

non-executive directors to familiarise

them with our business. These included

internal meetings with our MDs, Group

Company Secretary, Group Sustainability

Manager and a senior human resources

manager, and introductions to our

external legal counsel, remuneration

consultants and brokers; visits to key

sites; and briefings on our business and

strategy, our governance processes and

the year ahead.

Succession planning

Our ability to immediately appoint Sam as

Interim CEO on Neil’s resignation – and

shortly afterwards as permanent CEO –

was testimony to the strength and

adaptability of our succession planning

and, of course, to her capabilities. We

discuss Board succession planning at

every Nomination Committee meeting,

supported by a matrix of suitable internal

and external candidates, available in the

short, medium and long term. This year,

Sam introduced a similar system for the

Group’s senior managers.

Overseeing the development of BTG’s

senior managers is an important part of

our committee’s role. To manage our

growth and achieve our strategic ambitions,

senior managers must have the right

leadership capabilities to support that

growth and to reinforce and enhance our

strong culture. The central importance of

BTG’s culture to the Group’s success, and

the need to preserve it, was a key topic of

committee discussions, as I discuss in my

introduction to governance on page 77.

BTG continues to use external and

internal trainers to develop their senior

leaders and is planning to introduce

amentoring framework in 2025/26.

Duringthe year, following the success

ofPhoenix’s women’s leadership

acceleration programme and female

coaching scheme, the committee

welcomed BTG’s introduction of similar

initiatives at Bytes, including the launch

ofa Women in Technology group.

Succession planning is an ongoing focus

of the committee. Our work in this area

will continue to evolve in line with BTG’s

business requirements, individual career

development plans and the external

networks that directors bring to the Board.

Future priorities

BTG ended the financial year with a

strong, collaborative Board, who have

acomplementary skill set and a shared

commitment to the Group’s strategic

ambitions. Looking ahead to 2025/26,

tohelp achieve those strategic ambitions,

our committee will continue to focus on:

• • Further aligning Board composition

with our corporate strategy and future

business needs

• • Ensuring compliance with the UK

Corporate Governance Code 2024

and other regulatory requirements

• • Maintaining directors’ development

and overseeing the progression of

succession planning for BTG’s

seniormanagers.

Patrick De Smedt

Chair

12 May 2025

Annual Report and Accounts 2024

25 103

GOVERNANCE REPORT

Nomination Committee report continued

Committee attendance

Committee member

For the financial year to

28 February 2025

Patrick De Smedt 7/ 7

Erika Schraner 7/ 7

Shruthi Chindalur 7/ 7

Ross Paterson

3/3

Anna Vikström Persson

3/3

Mike Phillips

1/1

1 Appointed 1 June 2024.

2 Resigned from the committee on 24March2024.

Focus areas for

2025/26

Our committee will continue to

monitor its compliance with the

code and, with the Board, review

succession plans to continue to

build on the skills balance and

diversity across the business.

This will include:

• • Building on the breadth of our

directors’ skills, as we have

done in appointing Ross and

Anna, to support BTG’s growth

strategy and maximise the

potential of the business

• • Continuing our Board-level

succession planning process and

giving more time to developing

the succession pipeline at

senior management level

• • Supporting our executives as

they work with the new CPO to

continue developing the

leadership capabilities of the

wider senior management team,

especially as the company grows

• • Supporting the ongoing

development of our Board and

that of the executive directors.

Our Nomination Committee works to

ensure that we have the right executive

and non-executive leaders to deliver

ourstrategic plans and maximise our

business potential – now and in the future.

As part of this, we focus on three

complementary elements: ensuring

appropriate leadership and succession

planning for our Board and senior

management, overseeing the

development of a diverse and inclusive

succession pipeline, and promoting

BTG’s long-term sustainable success

inthe interests of our stakeholders.

Each year, we review and approve

ourcommittee terms of reference,

whichare available at bytesplc.com.

Our responsibilities

Our committee’s main responsibilities areto:

• • Regularly reassess the composition of

the Board and committees – including

size, skills, knowledge, experience

and diversity – to ensure they

remainappropriate, and to make

recommendations for changes,

asnecessary, to the Board

• • Review the criteria for identifying

andnominating candidates for

appointment to the Board, based on

the specification for a prospective

appointment, including the required

skills and capabilities

• • Identify and nominate candidates for

Board approval to fill Board vacancies

when they arise, considering other

demands on directors’ time

• • Lead the process regarding

appointments to the Board,

includingthat of the Chair

• • Review the time commitment and

independence of the non-executive

directors, including potential conflicts

of interest

• • Deliver succession planning for the

Board and senior executives, including

recruitment, talent development,

identifying potential internal or

external candidates, and making

recommendations to the Board

• • Ensure that all new Board members

have an appropriate and tailored

induction, and that training and

development is available to

existingmembers.

Exceeding diversity expectations

As well as being the right thing to do,

establishing a truly diverse leadership

team ultimately benefits our stakeholders

by enabling us to perform better. We

areproud of our Board and Senior

Management Diversity Policy (available

atbytesplc.com), through which we

continue to make progress against or

exceed diversity recommendations. This

is especially true of the board elements

ofthe FTSE Women Leaders Review:

• • Aspire to having at least 40% female

directors on the Board and senior

leadership team by the end of the

2025/26 financial year

• • Consider appointing at least one

woman in the Chair, senior

independent director, CEO or CFO

role by the end of 2025/26

• • Consider candidates for non-

executive director roles from diverse

gender and ethnic backgrounds

• • Develop a pipeline of diverse,

high-calibre candidates by

encouraging a range of employees

with different ethnic, gender and

experiential backgrounds to take on

additional responsibilities and roles.

With the changes to the Board this year,

women represent 57% of our Board at the

date of this report. That means we are

also aligned with the UK Listing Rules to

have women represent at least 40% of the

Board and to have at least onedirector

from a minority ethnic background.

With women in the roles of CEO (Sam)

and senior independent director (Erika),

we have reached a significant milestone,

because they contribute to the diversity

ofthought and mindset that we value so

highly at BTG. Our priority, of course,

willalways be to ensure we have the

rightperson in the right role, and the

requirements will continue to inform

ourfuture appointments.

We would like to see more progressat the

next level of the company’s leadership:

senior management. When appointed,

BTG’s new CPO will lead the work here,

taking responsibility for diversity and

succession planning of thecompany’s

senior management.

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Our Board and executive diversity data

The following tables provide data on gender and ethnicity across our Board and senior management team as at the date of this

report. The information was collected on a self-reporting basis.

Number of

Board members

Percentage

of the Board

Number of senior positions on the

Board (Chair, SID, CEO, CFO)

Number in the

Executive Committee

Percentage of senior

management team

Gender

Men 3 43% 2 2 50%

Women 4 57% 2 2 50%

Not specified/prefer not to say – – – – –

Ethnicity

White British or other White

(including minority-white groups) 5 71% 4 4 100%

Mixed/multiple ethnic groups – – – – –

Asian/Asian British

2 29% – – –

Black/African/Caribbean/

BlackBritish – – – – –

Other ethnic group, including Arab – – – – –

Not specified/prefer not to say – – – – –

Independence of non-executive

directors and potential conflicts

of interests

Our committee reviewed the independence

and potential conflicts of interests of the

non-executive directors in line with the

code. Having considered their time

commitments and other roles, and the time

they have served with BTG, we concluded

that they are all independent and continue

to make independent contributions and

effectively challenge management.

Managing succession planning

We manage succession planning in line

with the Group’s relevant policies. These

are aligned with regulatory requirements

around diversity targets and with the

company’s growth aspirations, which we

consider in relation to the skills and

expertise that we need or will need in

future at Board level.

In 2024/25, we continued to evaluate

BTG’s succession planning for senior

executive roles. This included assessing

the strengths of senior managers, areas

that need improvement and plans to

address those areas. While we identified

immediate and long-term candidates

among internal leaders, we also identified

areas where there are gaps for natural

long-term successors – and this is

wherewe will focus our attention in the

coming year.

We also again assessed the existing

succession planning for our executive

Board member roles, and reviewed the

formal succession plans for each of our

non-executive positions.

Carrying our performance

reviews

This year, we again carried out internal

performance reviews of our Chair, directors

and committees, completing our current

external consultancy Lintstock’s three-year

board development programme.

Progress on implementing the findings

and recommendations of these reviews

ismade during Nomination Committee

meetings. The Chair, with support from

the Group Company Secretary, monitors

this progress and, with feedback from the

CEO, reports back to the Board.

For more details, see The Board’s year on

pages 82 to 85.

Annual Report and Accounts 2024

25 105

GOVERNANCE REPORT

ESG Committee report

Introduction from our Chair

The creation of our ESG Committee reflects the company’s strong commitment

to our planet, people and communities, making sure we progress and achieve

important milestones. Our committee aims to inspire the business with good

practice from our members’ wide-ranging experience.

Setting up our committee

The ESG Committee was established in

June 2024, and we held two meetings

during the year. A dedicated committee

allows us to focus on, advocate and

monitor our approach to and progress

onESG areas. It will help us to meet the

expectations of all our stakeholders –

employees, customers, suppliers and

vendors, investors, and community and

environment – and ensure BTG’s ESG

activities support the company’s

competitive businessadvantage.

Our mandate and focus

Our mandate covers these three

areas,which form part of the Group’s

ESGstrategy:

1 Environmental – our main focus is

ouroversight of performance and

initiatives to meet the Group’s carbon

reduction targets, including a

transition plan to net zero

2 Social – our people and culture,

including a strong commitment to

diversity, equity and inclusion

3 Governance – we oversee BTG’s

business conduct, including

corporate and commercial

governance, policies around

businessethics and anti-bribery and

-corruption measures, and consider

emerging regulatory and reporting

requirements regarding sustainability

that are relevant to the Group.

Approving the ESG strategy

At our first meeting, we considered our

committee’s terms of reference, and

discussed and reviewed the proposed

ESG strategy and environment policy,

before approving both. The strategy and

policy are intended to be supportive and

living documents. We will review and

amend them at least once a year – as the

landscape changes, as we get feedback

from our stakeholders, and as we learn

from experience and best practice.

Reflecting the business significance of

the ESG agenda, all five non-executive

directors are members of the committee,

including our Board Chair – while our

CEO, CFO, Group Company Secretary

and Group Sustainability Manager all

have a standing invitation to attend. Our

members bring a wide variety of skills and

experiences from leading companies and

different industries to our discussions.

Adding rigour and monitoring

progress

I see the committee’s main role to add

rigour: setting clear targets, continually

monitoring progress, following up and

improving data accuracy. The Group has

already achieved notable ESG milestones,

by calculating Scope 3 emissions across

all categories relevant to the business,

achieving SBTi validation for carbon

reduction targets, and by beginning

tomeasure ethnicity. This significant

progress has been reflected in the high

scores the Group has received from

external ratings agencies, such as the

ISSESG, CDP and EcoVadis.

Continuing to develop our culture will be a

particular focus. While there is already so

much that is good about BTG’s culture,

there is always room for improvement.

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GOVERNANCE REPORT

The diversity, including gender balance,

at Board level is impressive, but we need

to make sure we measure and encourage

diversity across all levels of management

and the wider workforce. Similarly, while

the gender pay gap has improved, there is

still some disparity.

BTG will benefit from a more structured

way of working on talent management and

succession planning. We also need to

encourage greater diversity of thought.

My learning from other businesses is that

progress takes time and requires hard,

dedicated work.

How the committee works

The ESG Committee will meet formally

three times each year. We work closely

with the other Board committees,

especially the Audit Committee to ensure

the accuracy of data and reporting. I am

keen that we do not duplicate the work of

our other committees. The fact that all

directors are members of this and other

committees will help – as will my own

membership of the Audit Committee

andShruthi’s role as designated NED

foremployee engagement.

ESG Committee’s terms of reference

The new committee will focus on:

General

Significant ESG-related

projects, including their

impact, materiality

andbudget

Relevant internal audit

reports and BTG’s response

to actions that affect people,

planet and communities,

including interacting with

theAudit Committee

Monitoring emerging

regulatory and reporting

requirements for ESG

issuesto ensure we

remaincompliant.

Environmental

BTG’s impact on the natural

environment and our response

to climate change, including

reviewing plans and targets

BTG’s performance

againstour science-based

targets, and the

implementation of

relevantpolicies

andpractices

The potential impact on

BTGof climate-related

risksand opportunities.

Social

Progress against targets

forgender balance, the

gender pay gap and

ethnicdiversity

Board member

employeeengagement

andways to enhance

employee welfare

andperformance

Key BTG charitable and

community initiatives and

partnerships, monitoring

alignment with Group ethics

and transparency.

Governance

Reviewing ESG content in our

Annual Report and Accounts

to ensure it is fair, balanced

and understandable

Reviewing other reports

andstatements, including

ourmodern slavery statement

and human rights policy.

Priorities to grow our business

We look forward to 2025/26, as the ESG

Committee focuses on supporting the

business in working towards these

priorities:

• • Building the first phase of our net zero

transition plan

• • Establishing a water conservation and

waste policy

• • Enhancing BTG’s culture, with wider

promotion of diversity, equity and

inclusion, so we continue to be a great

workplace, attracting and retaining

the best talent

• • Advancing succession planning

• • Addressing the highest-rated risks

from the ESG audit

• • Continuing education across the

Group, through the continuing rollout

ofthe carbon literacy awareness

programme

• • Wider, more impactful,

communication of our plans

andsuccesses.

I also look forward to reporting back

tostakeholders in 2026 on how the

ESGCommittee has supported the

business in delivering these priorities

inour first full year.

Anna Vikström Persson

ESG Committee Chair

12 May 2025

Committee attendance

Committee member

For the financial year to

28 February 2025

Anna Vikström Persson 2/2

Patrick De Smedt 2/2

Erika Schraner 2/2

Shruthi Chindalur 2/2

Ross Paterson 2/2

1 Committee formed 1 June 2024.

Annual Report and Accounts 2024

25 107

GOVERNANCE REPORT

Compliance with the UK

Corporate Governance Code

For the year ended 28 February 2025, we applied the

principles of UK Corporate Governance Code 2024.

We complied with all the provisions of the UK Corporate

Governance Code 2024 (code) during the financial

yearandupto the date of this report, with two exceptions:

• • At the time of Mike Phillips’s resignation from the Board as

an independent non-executive director on24 March 2024,

we were not compliant with provisions 24and 32.

Thiswas resolved on 1 June 2024 when two newindependent

non-executive directors joined us:

փ Ross Paterson as Audit Committee Chair and a

memberofthe Remuneration Committee

փ Anna Vikström Persson as a member of the

AuditandRemuneration Committees.

The code is available in full on the FRC’s website at frc.org.uk.

1 Board leadership and company purpose

A The Board’s role Our Board’s objective is to create and deliver BTG’s long-term sustainable success, supported by

the right culture and behaviours, to generate value for shareholders and contribute to wider society.

Our governance framework ensures that we have a robust decision-making process and a clear

structure within which decisions can be made and strategy delivered.

Our delegation of authority matrix ensures that decisions are taken by the right people at the right

level with accountability up to the Board. This enables an appropriate level of debate, challenge and

support in the decision-making process. We continue to be led by an effective Board, which

ensures that the most relevant topics are discussed at meetings throughout the year. The Board’s

main activities are detailed on pages 82 to 85.

B Purpose, culture

and strategy

The Board has overall responsibility for establishing BTG’s purpose, culture and strategy and, in

doing so, delivering our long-term sustainable success and generating value for shareholders.

Central to this role is the need for the Board collectively to set the right ‘tone from the top’, in living

and upholding our values, encouraging open and honest debate, and behaving ethically. The Board

places great importance on ensuring that its conduct and decision making are appropriate for the

businesses and sector in which we operate, and in line with our culture.

Our Board is committed to delivering our strategy and to advancing our purpose: empowering and

inspiring our people to fulfil their potential, so they can help our customers make smarter buying

decisions and meet their business objectives through technology. The Board discusses company

culture during its meetings and regularly reviews reports from the CEO, CFO and senior

management that provide insight into the culture across the organisation. The Chair also receives

regular updates from management around culture. Together, this helps to promote behaviours

throughout the business to align with BTG’s purpose, culture and strategy.

C Resources

andcontrols

The Board ensures that BTG has the necessary resources to meet its objectives and to continually

measure its performance against them. Through the Audit Committee, it oversees BTG’s control

environment and risk management framework. The Board’s agenda is set to deal with those matters

relating to BTG’s strategic plan, risk management and systems of internal control, and corporate

governance policies.

D Stakeholder

engagement

Our key stakeholders play an important role in the successful operation of our business. Our Board

is fully aware of, and takes seriously, its responsibilities to them under Section 172(1) of the

Companies Act 2006. Our Board members are mindful of the potential effect on our stakeholders

when considering the company’s strategy or other activities.

Board members take an active role in engaging with shareholders and wider stakeholders. Non-

executive directors are available to meet shareholders and discuss their concerns in person at the

Annual General Meeting. They also attend investor calls when requested and are invited to attend

relevant industry events.

We have a designated non-executive director who takes responsibility for employee engagement.

This role engages with staff, including operational managers. Senior managers are also given

opportunities to present at Board meetings and so engage with Board members in a different

setting. This work contributes to our employee net promoter score (eNPS).

We provide more information about how we consider all stakeholders’ views in our decision making

on pages 86 to 91.

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E Workforce

engagement

Shruthi Chindalur took on the role of designated non-executive director for employee engagement

in March 2024, a role previously held by Erika Schraner, when she assumed other Board roles. For

more details, see pages 86 to 87.

Our speak-up policy sets out how employees and third parties can raise concerns in confidence,

either to one of our whistleblowing officers, directly to our independent Chair or through our

independent whistleblowing line. We also offer external whistleblowing guidance and have a

process for investigating whistleblowing reports. Our speak-up policy is available at bytesplc.com.

There were no whistleblowing reports this financial year.

2 Division of responsibilities

F Role of the Chair Our Chair, Patrick De Smedt, leads the Board. He determines the agendas for meetings, manages

the meeting timetable and encourages open and constructive dialogue during meetings, inviting

the views of all Board members.

Patrick was considered independent when he was appointed. We review the status of all our

independent non-executive directors each year and confirm that each continues to be

independent.

G Composition of

the Board

At year end, the Board consisted of four independent non-executive directors and two executive

directors, as well as an independent non-executive Chair. The roles of the Chair and CEO are

clearly defined, with their role profiles reviewed as part of the Board’s annual governance review.

The Chair is responsible for effective leadership of the Board and for maintaining a culture of

openness and transparency at its meetings. The CEO has day-to-day responsibility for the effective

management of BTG’s business and for ensuring that Board decisions are implemented.

Our Board has agreed a clear division of responsibilities between its leadership function –

supported by our corporate governance framework – and the executive leadership of the business.

To ensure that no individual has unrestricted powers of decision making and no subgroup of

directors can dominate the Board, we have defined responsibilities clearly in our role statements

and in the matters reserved for the Board. Committee terms of reference determine the authority

given to each Board committee.

For more on our Board composition, leadership and role statements, see pages 78 to 79. The

responsibilities of our Chair, CEO and senior independent director, and our Board and committees,

are set out on page 135 and at bytesplc.com.

H Non-executive

directors’ role

and time

commitment

Our non-executive directors scrutinise the performance of the executive team and hold it to

account against agreed objectives. Our Chair holds discussions with the non-executive directors

without the executive directors being present, a practice that continued in the past year.

Our senior independent director serves as a sounding board for the Chair and is available as an

intermediary for our other directors and shareholders. For the year ended 28 February 2025, our

Chair’s performance appraisal was done through our senior independent director, with input from

external advisor Lintstock, and was concluded in February 2025.

Regular Board and committee meetings are scheduled throughout the year to ensure directors

allocate sufficient time to discharge their duties effectively. A non-executive director role generally

takes up at least 24 days a year, after the induction phase, plus additional time to prepare for each

meeting. Directors are also required to regularly update and refresh their skills, knowledge and

familiarity with the company, and attend additional Board, committee or shareholder meetings at

certain times.

Before appointing a candidate, the Nomination Committee assesses that person’s commitments,

including other directorships, to ensure they have enough time for the role. The committee

reassesses the directors’ time commitments every year to ensure they each still have time for their

role; the Chair also does this periodically as part of his role. Our directors must obtain approval

before taking on additional external appointments.

I Role of the

Company

Secretary

The Group Company Secretary is secretary to the Board and also oversees BTG’s legal function.

Their responsibilities include ensuring the Board has the information, time and resources to

discharge its duties and to function effectively and efficiently. They provide briefings and

guidanceto the Board on governance, legal and regulatory matters and facilitate induction

ofnewdirectors.

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GOVERNANCE REPORT

3 Composition, succession and evaluation

J Appointments

tothe Board

andsuccession

planning

The Board, with the Nomination Committee’s support, continually reviews its own composition and that of

its committees, and considers succession planning, diversity, inclusion and governance-related matters.

The Nomination Committee has overall responsibility for leading the process for new Board

appointments. It also ensures that these appointments bring the required skills and experience to the

Board to assist in developing and overseeing BTG’s strategy. The committee makes sure all appointments

are made on merit, having evaluated the capabilities of all potential candidates against the requirements

of the Board and considered all types of diversity, including gender.

For more details, see our Nomination Committee report on pages 102 to 105.

K Skills, experience

and knowledge of

the Board

As part of our succession planning, the Nomination Committee considers the balance of skills,

experience and knowledge our Board needs to work effectively and help BTG deliver its strategic

goals. Find all the details of our directors’ tenure, skills and experience on pages 78 to 80.

L Board evaluation In line with the need to undertake an externally facilitated evaluation every three years, we have now

completed a three-year board effectiveness programme with external advisor Lintstock. The

programme includes one Board review with interviews followed by two survey-based reviews.

During the year, BTG again worked with Lintstock around its Board evaluation process, which

consisted of tailored surveys and one-to-one discussions by the Chair with Board members.

Lintstock provided feedback to the Chair and the senior independent director in January 2025,

followed by its report to the Board in February 2025. The Board then agreed actions for 2025/26 to

further strengthen the way it operates. The Chair and Group Company Secretary are managing

these actions, which we set out on page 85.

4 Audit, risk and internal control

M Internal and

external audit

The Board receives regular updates on audit, risk and internal control matters, with the Audit

Committee having detailed oversight and reporting its findings to the Board.

Provision 24 of the code recommends that the audit committees of companies within the FTSE 350

should comprise a minimum of three members, all of whom should be independent non-executive

directors. Following Mike Phillips’s resignation from the Board as an independent non-executive

director on 24 March 2024, the company was not compliant with provision 24. However, this was

resolved on 1 June 2024, when Ross Paterson joined us as independent non-executive director

and Audit Committee Chair, and when Anna Vikström Persson joined us as an independent

non-executive director and a member of the Audit Committee.

The Audit Committee report on pages 92 to 101 sets out more about audit, risk management and

internal control, and the committee’s work. The report also includes details about how the

committee assesses the effectiveness and independence of EY – our external auditor – and PwC,

our internal auditor, which reports to the Audit Committee about progress against audit reviews and

identifies areas of our control environment for review.

N Fair, balanced and

understandable

assessment

The Board considers this report to be fair, balanced and understandable and to provide the

information necessary for shareholders to assess BTG’s position and performance, business

model and strategy. The Board’s assessment is described on pages 100 to 101.

O Risk management

and internal

control framework

Our Board is accountable to our stakeholders for ensuring BTG is managed appropriately. It sets

the Group’s risk appetite, satisfies itself that its financial controls and risk management systems are

robust, and ensures that it is adequately resourced.

A description of the principal risks facing the Group is set out on pages 50 to 56. This shows how the

directors have assessed the prospects of the company, over what period and why they consider

that period to be appropriate (see Viability statement on pages 73 to 74).

Compliance with the UK Corporate Governance Code continued

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5 Remuneration

P Remuneration

policies and

practices

Provision 32 of the code recommends that the remuneration committees of companies within the

FTSE 350 should establish a remuneration committee of independent non-executive directors with

a minimum membership of three. In addition, the chair of the board can only be a member if they

were independent on appointment and cannot chair the committee. Following Mike Phillips’s

resignation from the Board as an independent non-executive director on 24 March 2024, the

company was not compliant with provision 32. However, this was resolved on 1 June 2024, when

two new independent non-executive directors joined us – Ross Paterson and Anna Vikström

Persson – both as new members of the Remuneration Committee.

Our Board, supported by the Remuneration Committee, ensures that our remuneration policies

support BTG’s strategy and promote long-term sustainable success. Executive remuneration is

aligned to the successful delivery of our long-term strategy and considers overall BTG

remuneration policies and practices. This includes linking executive remuneration more closely

with achieving our sustainability targets for 2025/26.

Our current directors’ remuneration policy was approved by a binding shareholder vote at our

Annual General Meeting held on 11 July 2024 and took formal effect from that date. It will apply for

three years from the date of approval, and will next be included as part of our Annual General

Meeting in 2027 – unless a new policy is presented to shareholders before then. The updated

directors’ remuneration policy can be found in full on pages 108 to 115 of our Annual Report and

Accounts 2023/24.

Q Executive

remuneration

The Remuneration Committee is responsible for setting the remuneration for executive directors.

No director is involved in deciding their own remuneration. See our directors’ remuneration report

on pages 112 to 130 for more on our remuneration policy and how it is implemented.

R Remuneration

outcomes and

independent

judgement

Details of the composition and work of the Remuneration Committee are set out in the directors’

remuneration report on pages 118 to 130.

Annual Report and Accounts 2024

25 111

GOVERNANCE REPORT

Directors’ remuneration report

Introduction from our Chair

As in previous years, the Remuneration Committee’s

decisions for 2024/25 have been shaped by BTG’s

performance and broader developments, and guided

by the remuneration policy and the Group’s values.

I’m proud of our strong

performance this year,

which reinforced our track

record of growth. With

Sam stepping into the

CEO role, we sharpened

our strategic focus and

strengthened execution.

We further aligned our

executive compensation

frameworks with the

company’s strategic

goalsand the interests

ofall stakeholders.

Dr Erika Schraner

The start of the financial year brought

unique challenges for the Board,

duringwhich the committee upheld

therobustness and fairness of BTG’s

remuneration framework. This included

overseeing the successful resolution of

the former CEO’s remuneration clawback

and actively supporting the leadership

transition. The adoption of a new

remuneration policy at the 2024 AGM –

backed by 98.71% of shareholder votes

– underscores our commitment to clear

governance and to building stakeholder

confidence through transparent,

accountable decision making.

For the rest of the year, our committee

turned its attention to establishing the

remuneration package for our new CEO,

onboarding our new Remuneration

Committee members, reviewing

developments in relation to the UK

Corporate Governance Code 2024 (code)

and implementing the new remuneration

policy. The committee devoted

considerable time to ensuring that our

remuneration policies and practices align

to strategy and that rewards are linked

firmly to performance and are fair.

When considering the implementation of

the policy for the 2025/26 financial year, as

a committee we paid particular attention

to developing rewards to keep pace with

the growth of BTG and the increasing

complexity it brings, while seeking fairness,

and achieving competitiveness in

attracting and retaining top talent. In our

deliberations, we carefully consider the

interests of shareholders, management

and employees, drawing on relevant

market data to provide context and guide

our decision making. Following a thorough

review of the appropriateness of the

executive directors’ salaries and taking into

consideration the feedback from our major

shareholders, the committee is proposing

adjustments to the salaries of the CEO

and CFO for the 2025/26 financial year.

We also launched our fourth ShareSave

plan, in August 2024. This was again well

received by employees, with more than

50% participating in one or more of these

plans. The first ShareSave plan, launched

in 2021, vested this year, with participants

able to exercise their options.

Board changes

Sam Mudd was appointed Interim CEO

on21 February 2024 and subsequently

asCEO on 10 May 2024. Having served

as an executive director on the Board

since July 2023 – and, for the ten years

before that, as MD at Phoenix, where she

oversaw an extended period of strong

organic growth – Sam has continued

toapply the expertise and experience

gained from more than 20 years in

leadership positions to her role as CEO.

The Board was further strengthened

during the year with the appointments

ofRoss Paterson as an independent

non-executive director and Chair of the

Audit Committee, and of Anna Vikström

Persson as an independent non-executive

director and Chair of the ESG Committee,

both with effect from 1 June 2024. On

joining the Board, Ross and Anna were

also appointed as members of the

Remuneration Committee.

Following Neil Murphy’s resignation as

CEO on 21 February 2024, the company

reached a settlement agreement with

him, enforcing BTG’s remuneration

policyclawback provisions, requiring the

repayment of net bonuses received over

the previous three years (resulting in

repayment of £274,825 in May 2024), the

forfeiture of any bonus due for 2023/24,

and the forfeiture of all entitlements under

the company’s Performance Share Plan

and Deferred Bonus Plan. More details

are available in the annual report on

remuneration on page 123.

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GOVERNANCE REPORT

Remuneration outcomes

for2024/25

As outlined in the Financial review on

pages 28 to 33, BTG delivered another

year of strong financial results in 2024/25,

achieving record gross invoiced income,

gross profit and operating profit. This

performance – delivered against a

backdrop of ongoing economic

uncertainty – demonstrates the

strengthof our business and the

resilience of our operations.

We achieved double-digit growth across

key performance indicators, further

building on the momentum established

since our IPO. Our earnings per share

(EPS) performance over the five financial

years since listing highlights our

sustained ability to deliver value for

shareholders.

Equally important to our long-term

success are the non-financial measures

that support sustainable growth. In

2024/25, we continued to prioritise

employee satisfaction and customer

engagement – both strong indicators

oforganisational health and essential

drivers of our future performance.

The Board is highly encouraged by the

progress made across both financial and

non-financial dimensions. As we look to

the future, the Board recognises the

importance of retaining our high-

performing leadership team, incentivising

ongoing delivery, and ensuring we remain

well positioned to attract the talent

required to sustain our growth trajectory.

For 2024/25, the CEO and CFO were

eligible for a maximum annual bonus

opportunity of 125% of their base salary.

The 2024/25 performance for the CEO

and CFO was assessed based on a

balanced scorecard of financial and

non-financial metrics, with 80% based

onadjusted operating profit and 20%

based on key ESG-related and other

strategic objectives.

As a result of this year’s strong

performance, our executive directors

received an annual bonus payout of 84%

of salary (being 67% of the maximum

bonus). More details of performance

against the targets are set out on page

120. In line with our Deferred Bonus Plan,

these bonuses will be paid two thirds in

cash and one third in shares, deferred for

two years.

We were pleased with the strong

performance that led to the vesting

of83% of the maximum under the

Performance Share Plan (PSP) awards

granted on 1 June 2022. These awards

were structured with 75% based on

adjusted EPS and 25% on relative total

shareholder return (TSR) versus the FTSE

250 Index (excluding investment trusts

and real estate investment trusts) over

thethree-year performance period to

28 February 2025.

Importantly, this represents the first PSP

award eligible to vest for our executive

directors since our IPO in 2020, marking

the first time a long-term incentive value

will be reflected in the single total figure

ofremuneration for each director. As a

result, the total remuneration figures

forSam Mudd and Andrew Holden are

notably higher this year compared to the

prior year.

The committee considered the

appropriateness of the annual bonus

andPSP outcomes following the end of

2024/25 and whether any adjustments or

use of discretion might be appropriate.

We concluded that the overall outcomes

reflect the underlying performance of

thebusiness and are in line with the

experience of shareholders and other

stakeholders over the respective

performance periods, so that no

adjustments to the outcomes are

necessary.

Sam’s participation in incentive plans in

2024/25 was prorated over the periods

when she acted as Interim CEO and then

as CEO. For 2024/25, this meant applying

a weighted average salary for the full-year

bonus calculations and also for her PSP

award – reflecting Sam’s increase in salary,

which took effect on her appointment as

permanent CEO on 10 May 2025, as set

out in this remuneration report.

As fully described in last year’s Annual

Report, the Board asked some of the

non-executive directors to provide

substantial additional support to the

company during the second half of the

2023/24 financial year and into 2024/25,

to lead specially established Board

subcommittees overseeing the

investigation of undisclosed share dealings

by two former directors. At the end of this

work, BTG paid additional non-executive

directors’ fees in 2024/25 for these

purposes in line with our remuneration

policy. As indicated last year, the Board

regards the payment of these additional

fees in 2024/25 as appropriate and in

shareholders’ bestinterests.

Remuneration policy and

UKCorporate Governance

Code2024

Shareholders approved BTG’s new

remuneration policy at the 2024 Annual

General Meeting, offering strong

endorsement with 98.71% of votes in

favour. During the year, our committee

conducted a review of the policy and

concluded that it continues to align well

with the company’s objectives and

remains appropriate for its purpose.

We welcomed the updates to the code

published in early 2024. Having considered

the updates to malus and clawback

provisions under the new code, we were

satisfied that these have been duly

addressed by the company – as set out in

the updated disclosures in the directors’

remuneration report – and determined

that no changes to the remuneration

policy were needed at thistime.

Annual Report and Accounts 2024

25 113

GOVERNANCE REPORT

Directors’ remuneration report continued

Pay arrangements for 2025/26

Base salaries

The executive directors’ salaries were

increased by 9% from 1 March 2025.

Following these increases, the salaries

ofSam as CEO and Andrew as CFO are

£459,000 and £381,000, respectively.

Over the past year, Sam has

demonstrated exceptional leadership in a

challenging environment, driving strong

performance. Beyond ensuring stability

following the former CEO’s resignation in

February 2024, she swiftly established

herself in the role, infusing the business

with renewed energy and a growth

mindset. Looking ahead, her leadership

ispivotal to capitalising on significant

growth opportunities and driving

continued success. As the company

scales, the CEO role has become

increasingly complex, requiring strategic

vision and operational expertise. With

strong ambitions for the future, we are

committed to retaining Sam to lead BTG

through its next phase of growth,

recognising her tremendous value

andhighly sought-after skill set.

When Sam was appointed CEO in the

firstquarter of 2024/25, she inherited the

same fixed pay level as her predecessor.

This was deemed appropriate at the time

to allow her to demonstrate results in

herfirst year. However, an important

distinction is that our previous CEO was

apre-IPO leader who benefited from a

material shareholding as the result of the

successful outcome of a pre-IPO equity-

based incentive plan. His equity position

influenced all elements of his pay, with

lowfixed pay at IPO and subsequently

forgoing adjustments beyond inflationary

measures. This led to a continued market

pay gap, which further widened with the

growth of the company. In comparison to

both the pan-sector FTSE 250 comparator

group and the bespoke technology sector

comparator group, our assessment shows

that Sam’s compensation falls below the

lower quartile.

After careful consideration of pace of

growth, complexity and the interests of

stakeholders, including consultation

with16 of our largest shareholders

representing around 63% of our register,

as well as key proxy agencies, the

committee has decided to increase the

CEO’s reward this year as permitted within

our existing policy. We are therefore

increasing Sam’s annual base salary by

9.0%, bringing her 2025/26 base salary

to£459,000, and so moving itcloser to,

but still below, market medianlevels.

Andrew Holden, CFO, joined BTG in

2021and the committee initially set

hisbase salary 6.25% lower than his

predecessor’s, to recognise that, while

hewas an experienced senior executive

at JSE-listed technology company Altron

Limited, BTG’s former parent company,

this was his first executive director role in

a UK-listed environment. As was the case

with Neil Murphy, Andrew’s predecessor

as CFO was also a pre-IPO leader with the

benefit of a successful pre-IPO equity

plan, and that status affected the level of

CFO salary that Andrew assumed from

appointment. Andrew quickly established

himself in the role, and, over the past four

years, has provided excellent leadership

of the company, delivering strong

progress against our financial objectives

and robust financial results in a

challenging and uncertain economic

environment. Since joining, while

Andrew’s base salary has been adjusted

through annual increases aligned to

BTG’s workforce levels, the continuing

discount of Andrew’s base salary to

market levels for CFOs remains. After

more than four years in post and given

Andrew’s contributions and strong track

record of delivery, the committee has

determined that it is an appropriate time

to review his base salary and address its

continuing discount of Andrew’s base to

wider market levels.

Against the pan-sector FTSE 250

comparator group and the bespoke

technology sector comparator group,

ourCFO is below lower quartile at base

rate and bonus as a percentage of salary.

The committee considered the company

performance over the past four years,

thescale of the CFO role, his experience

and his contribution to the company,

anddetermined that an adjustment

toAndrew’s salary is warranted.

Thecommittee is therefore increasing

Andrew’s salary by another 6.2% over

the3% workforce increase to £381,000.

On page 128 we set out more details of

themarket data reference points that

wehaveconsidered in relation to the

appropriateness of our executive

directors’ salary levels.

The salary increases for the CEO and

CFO move their fixed pay closer to market

median levels while remaining below

median. The committee has therefore

adopted a phased approach over a

number of financial years to progressively

align executive director pay with

competitive benchmarks. As part of this

approach, the committee may consider

more corrective adjustments in the

2026/27 financial year. However, any

such increases will only be implemented

following a thorough review of both

company and individual performance.

Inline with our overarching remuneration

philosophy, the committee remains firmly

committed to ensuring that reward follows

performance – not precedes it. Any future

salary adjustments will be subject to

rigorous evaluation, with careful

consideration given to performance

outcomes, market positioning, retention

needs, and the views and expectations of

shareholders.

Pension and benefits

Pension contributions for our executive

directors will remain unchanged at up to

4% of salary, and continue to be in line

with the level provided to the majority of

our employees.

Annual bonus

The annual bonus opportunity will be

maintained at 125% of salary for the CEO

and CFO for 2025/26. This is the same as

the previous year and within the headroom

allowed for in the remuneration policy.

Targets are based on the Board-approved

budget and aligned with the financial

andnon-financial objectives for the year.

The bonus opportunity is structured as

apercentage of base salary as follows:

72% operating profit (and no longer

adjusted operating profit), 28% key

strategic metrics, which include services

gross profit, and other measures linked to

our strategic goals.

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GOVERNANCE REPORT

PSP

The award level under the PSP in 2025/26

will be maintained at 150% of salary for

the CEO and CFO. This is the same as the

previous year and within the headroom

allowed for in the remuneration policy.

Vesting will be subject to performance

conditions based on EPS (previously,

adjusted EPS) – still with 75% weighting,

and relative TSR with a continued 25%

weighting, measured over three years –

and will be subject to a two-year post-

vesting holding period.

Non-executive director and

committee evaluation

The committee’s performance was

assessed as part of the annual Board

evaluation. I am pleased to report that the

committee is operating highly effectively.

Our Board Chair’s fees and the fees of our

non-executive directors were reviewed

and increased last year and have been

held at that level for 2025/26, as set out

on page 130.

Looking ahead to 2025/26

Over the next 12 months, the committee

will focus on:

• • Keeping the directors’ remuneration

policy under review to ensure our

arrangements continue to support

BTG’s strategy and objectives

• • Ensuring that the 2025/26 annual

bonus plan continues to drive

performance and reward sustainable

growth and is set against appropriate

financial and non-financial targets

• • Granting PSP awards in 2025 with

appropriately stretching EPS and TSR

performance conditions

• • Monitoring corporate governance

developments and addressing any

associated differences as appropriate

• • Reviewing the performance of our

external remuneration consultants

after five years of service

• • Monitoring external market practice,

and developments in the governance

expectations of institutional

shareholders and shareholder

representative bodies.

Conclusion

Our committee remains committed to

ensuring that remuneration supports

BTG’s objectives and drives the company

forward, while aligning the interests of

both BTG shareholders and management.

We will continue to take a disciplined,

performance-driven approach to

compensation, and I look forward to

continuing that discussion with my

committee colleagues over the coming

year and listening to stakeholders’ input.

At the 2025 Annual General Meeting,

shareholders will be asked to approve a

single remuneration-related resolution –

on the directors’ remuneration report –

which is the normal annual advisory vote

on this report.

The committee welcomes all input

onremuneration matters. If you have

anycomments or questions on any

element ofthe directors’ remuneration

report, please email me through

ourGroup Company Secretary at

wk.groenewald@bytesplc.com. We are

grateful for the guidance and support we

have received from our shareholders on

remuneration matters in the past year.

I would like to express my gratitude to our

shareholders, the Board, and the BTG

team and its advisors for their unwavering

support and engagement throughout the

2024/25 financial year. I hope you will join

the Board in supporting our directors’

remuneration report at the Annual General

Meeting on Wednesday, 2 July2025.

Erika Schraner

Remuneration Committee Chair

12 May 2025

Annual Report and Accounts 2024

25 115

GOVERNANCE REPORT

Directors’ remuneration report continued

Remuneration at a glance

Our pay principles

• • Clear and simple

• • Aligned with the interests of shareholders

andother stakeholders

• • Performance-related and linked to our KPIs

• • Competitive but not excessive

• • Aligned with our culture and values

Implementing our policy in 2025/26

The following table shows how we intend to apply the policy for 2025/26 for our two executive directors.

Fixed pay Salary փ CEO: £459,000 (9.0% increase effective 1 March 2025)

փ CFO: £381,000 (9.2% increase effective 1 March 2025)

փ Workforce average increase 3%

Pension փ 4% of salary (in line with workforce)

Benefits փ Medical and life insurance

Bonus Maximum փ CEO and CFO: 125% of salary (within policy limit of 150%

ofsalary)

Performance measures փ Operating profit (72%)

փ Strategic financial and ESG objectives (28%)

Operation փ One third deferred into shares for two years

փ Malus and clawback provisions operate

փ Discretion to adjust formulaic outcomes

Long Term Incentives (LTI)

(Performance Share Plan

(PSP))

Award level փ CEO and CFO: 150% of salary (within policy limit of 200%

ofsalary)

Performance measures փ Earnings per share (EPS) (75%)

փ Relative total shareholder return (TSR) (25%)

Operation փ Performance measured over three years

փ Two-year post-vesting holding period applies to vested awards

փ Malus and clawback provisions operate

փ Discretion to adjust formulaic outcome

Share ownership

guidelines

In-employment փ 200% of salary

Post-employment փ 200% of salary to be held for two years post-cessation

Current shareholding փ CEO: 101% of salary

փ CFO: 100% salary

փ Both the CEO and CFO will continue to move towards the

200% guideline, as share options awarded under the LTI

vestand are exercised each year

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GOVERNANCE REPORT

Implementing our policy in 2024/25

The following charts show the actual levels of remuneration earned by the executive directors for 2024/25 relative to the

maximum potential remuneration that was available.

2024/25 remuneration outcomes versus policy maximum

£’000 0 300 600 900 1,200 1,500

Andrew Holden, CFO

2024/25

Maximum

Actual

Sam Mudd, CEO

2024/25

Maximum

Actual

Fixed pay Annual bonus

LTI

1 Annual bonus was 125% of salary maximum (with one third deferred), and measured against adjusted operating profit (80%) and strategic/ESG objectives (20%).

2 The PSP was awarded in June 2022, and measured against adjusted EPS (75%) and relative TSR (25%) over a three-year performance period to 28 February 2025.

Compliance with the UK Corporate Governance Code 2024

In designing our remuneration policy, and implementing it throughout the year, the code has been a core source.

The committee took full account of its remuneration-related provisions – as we illustrate below in describing how

we sought to comply with the six factors in provision 40:

Clarity Our remuneration framework supports financial delivery and the achievement of strategic objectives,

aligning the interests of our executive directors and shareholders. Our approved policy is transparent

and has been well communicated to our senior executive team. It will be clearly articulated to our

shareholders and representative bodies (both on an ongoing basis and during consultation, if any

changes are considered necessary).

Simplicity Our framework has operated on a consistent basis since IPO and has been designed to be

straightforward to communicate and operate.

Risk Our incentives have been structured to align with the Board’s system of risk management and

riskappetite. Inappropriate risk-taking is discouraged and mitigated by, for example:

• • A balance of fixed pay to performance-related incentive pay and through multiple performance

measures based on a blend of financial and non-financial targets

• • Deferring a proportion of annual bonus into shares and operating a post-vesting holding period for

theLong Term Incentive Plan (LTIP)

• • Significant in-employment and post-employment shareholding guidelines

• • Robust recovery and withholding provisions.

Predictability Our incentive plans have individual caps, with share plans also subject to market standard dilution

limits. The committee has full discretion to alter the payout level or vesting outcome to ensure

payments are aligned with our underlying performance.

Proportionality Our approach is underpinned by the principle that failure should not be rewarded. There is a clear link

between individual awards, strategic delivery and our long-term performance. This is demonstrated,

forexample, by the connection between executive directors’ pay arrangements and their building and

maintaining meaningful levels of shareholding; through linking our incentive measures and KPIs; by our

ability for, and openness to, using discretion to ensure appropriate outcomes; and via the structure of our

executive directors’ contracts. As mentioned above, the committee reviews formulaic incentive outcomes

and may adjust them in the light of overall Group performance and our wider employee remuneration

policies and practices.

Alignment to culture Our policy is aligned to our dynamic, can-do culture and strongly held values. The committee

strivesto embed a sustainable performance culture at management level that can cascade down

throughout our business. The Board sets the framework of KPIs against which we monitor the

company’s performance and the committee links the performance metrics of our incentive

arrangements to those indicators. We are also keen to foster a culture of share ownership and

operate employee share schemes across the workforce.

Annual Report and Accounts 2024

25 117

GOVERNANCE REPORT

Directors’ remuneration report continued

Annual report on remuneration

Committee attendance

Committee member

For the financial year to

28 February 2025

Erika Schraner 4/4

Patrick De Smedt 4/4

Shruthi Chindalur 4/4

Ross Paterson

2/2

Anna Vikström Persson

2/2

Mike Phillips

n/a

1 Appointed 1 June 2024.

2 Resigned from the committee on 24March2024.

The committee’s role

andcomposition

The Board is ultimately accountable for

executive remuneration and delegates

this responsibility to the Remuneration

Committee. The committee is responsible

for developing and implementing a

remuneration policy that supports BTG’s

strategy and for determining executive

directors’ individual packages and terms

of service, together with those of other

members of senior management

(including the Group Company Secretary).

When setting the remuneration terms for

executive directors, the committee

reviews and considers wider employee

reward and related policies. It also takes

close account of the remuneration-

related provisions of the UK Corporate

Governance Code 2024 (code) (see

page117).

The committee is formally constituted and

operates with written terms of reference,

which are available at bytesplc.com.

In the year, the committee comprised

Erika Schraner (Chair), Patrick De Smedt,

Shruthi Chindalur, Ross Paterson and

Anna Vikström Persson. Mike Phillips

resigned from the Board and from the

committee on 24 March 2024, while Ross

Paterson and Anna Vikström Persson

joined the Board and the committee on

1 June 2024. All the other members of the

committee were members throughout the

year ended 28 February 2025. The

committee met four times during the year,

with full attendance at all meetings.

At the committee’s invitation, the Group’s

executive directors, the Group Company

Secretary (who acts as committee

secretary) and FIT Remuneration

Consultants LLP (FIT) – BTG’s retained

remuneration consultants – also attend

its meetings. The executive directors are

consulted on matters discussed by the

committee unless these relate to their

own remuneration. Advice or information

is sought from other employees and from

FIT where the committee feels it would

assist its decision making.

The committee is authorised to take such

internal and external advice as it considers

appropriate to carry out its duties, including

appointing external remuneration advisors.

During the year, it was assisted by FIT. FIT

was appointed by the Board in September

2020 and provided advice during the year

on general remuneration matters, the

former CEO clawback settlement, and

onthe design and implementation of the

policy. Fees paid to FIT for advising the

committee during the year to 28 February

2025 were £112,830 (excluding VAT),

charged on a time/cost basis. FIT did not

provide any other services to BTG during

the year to 28 February 2025. FIT is a

member of the Remuneration Consultants

Group and, as such, voluntarily operates

under its code of conduct on executive

remuneration consulting in the UK. The

committee is satisfied that FIT’s advice

was objective and independent.

The committee carried out the following

significant activities during the 2024/25

financial year:

• • Concluded a comprehensive review of

the executive directors’ remuneration

arrangements and prepared a revised

directors’ remuneration policy, which

was put to shareholders for approval

at the 2024 Annual General Meeting

• • Engaged with our major shareholders

on the proposed revision of the

directors’ remuneration policy

• • Reviewed and approved remuneration

packages for the current executive

directors

• • Established the compensation for the

Interim CEO, and subsequently

determined the terms of the package

on her appointment as CEO

• • Reviewed and approved the annual

bonus outcomes for the 2023/24

financial period

• • Reviewed and approved the terms of

the 2024 PSP awards

• • Oversaw the PSP, DSB, CSOP and

SAYE plans

• • Monitored corporate governance

developments, and ensured that BTG

is appropriately positioned to comply

with the code

• • Monitored external market practice,

and developments in the governance

expectations of institutional

shareholders and shareholder

representative bodies

• • Determined the treatment of

remuneration for the former CEO

following his resignation, including the

clawback in full of all cash bonuses

paid since IPO and the forfeiture of all

outstanding share awards.

Since the end of the 2024/25 financial

year, the committee has:

• • Determined the outcomes under the

annual bonus plan for the year ended

28 February 2025

• • Determined the outcomes under the

PSP for the year ended 28 February

2025 – that is, relating to the awards

granted on 1 June 2022

• • Aligned our executive compensation

package and the annual bonus

structure for the year ending

28 February 2026 with the company’s

strategic goals and 2025/26 budget,

ensuring a strong correlation between

pay and performance, while ensuring

competitiveness of executive pay

packages in attracting and retaining

top talent in support of the Board’s

succession planning

• • Reviewed and agreed the award levels

and performance targets for the PSP

grants to be made to eligible

participants in 2025

• • Engaged with our leading

shareholders with regard to our

approach to implementing the

directors’ remuneration policy for

the2025/26 financial year.

118 Bytes Technology Group plc

GOVERNANCE REPORT

The current directors’ remuneration policy was approved by shareholders at our 2024 Annual General Meeting on 11 July 2024 –

receiving strong support, with 98.71% of votes in favour – and took formal effect from that date. The committee currently intends

that the policy will apply for the full three-year period until the 2027 Annual General Meeting. The full shareholder-approved policy

can be found on pages 108 to 115 of Annual Report and Accounts 2023/24, available at bytesplc.com.

The information that follows has been audited (where indicated) by BTG’s external auditor, EY. The annual report on remuneration

and the annual statement will be put to a shareholder vote at the Annual General Meeting on 2 July 2025.

Single total figure of remuneration for each director (audited)

The table below reports the total remuneration for BTG directors during the year ended 28 February 2025. As previously noted,

Sam Mudd joined the Board as MD of Phoenix on 12 July 2023, with 2023/24 remuneration prorated from that date. She became

Interim CEO on 21 February 2024 and was confirmed as CEO on 10 May 2024. Her salary remained unchanged for the brief period

she was Interim CEO in 2023/24. From 1 March 2024, she received an annualised salary of £400,000 (including a supplement of

£91,725 as Interim CEO), increasing to £421,000 from 10 May on her appointment as permanent CEO. Compensation shown in the

table below for 2024/25 has been prorated to reflect her time in both roles.

Directors’ total remuneration

Base salary/

fees

Benefits

Annual

bonus

Long-term

incentives

Pension

Total Total fixed Total variable

Executive directors

Sam Mudd

2024/25 416,997 5,803 3 47,9 84 190,537 16,680 978,001 439,480 538,521

2023/24 187,957 530 101,114 – 6,368 295,969 194,855 101,114

Andrew Holden 2024/25 348,926 5,480 2 91,179 374,215 13,957 1,033,757 368,363 665,394

2023/24 333,900 816 184,544 – 13,356 532,616 348,072 184,544

Non-executive directors

Patrick De Smedt 2024/25 205,000 – – – – 205,000 205,000 –

2023/24 187,20 0 – – – – 187,2 0 0 187, 2 0 0 –

Shruthi Chindalur

5, 6

2024/25 115,2 21 – – – – 115 ,221 115 ,221 –

2023/24 6,233 – – – – 6,233 6,233 –

Ross Paterson

2024/25 51,000 – – – – 51,000 51,000 –

2023/24 – – – – – – – –

Mike Phillips

6, 8

2024/25 56,933 – – – – 56,933 56,933 –

2023/24 86,050 – – – – 86,050 86,050 –

Erika Schraner

6, 9

2024/25 80,583 – – – – 80,583 80,583 –

2023/24 92,13 3 – – – – 92,13 3 92,13 3 –

Anna Vikström

Persson

2024/25 51,000 – – – – 51,000 51,000 –

2023/24 – – – – – – – –

Total 2024/25 1,325,660 11,28 3 639,163 564,752 30,637 2,571,495 1,367,580 1,203,915

2023/24 893,473 1,346 285,658 – 19,724 1,200,201 914,543 285,658

1 Non-salary benefits include life insurance and the discount on options granted under the 2024 SAYE (2023/24: nil).

2 This relates to the PSP award granted in June 2022. The value of PSP awards has been calculated using the three-month average share price measured to 28 February 2025 of

440 pence per share less the 1-pence-per-share exercise price. See more on pages 120 to 121.

3 The amount of employer contribution based on a percentage of base salary.

4 Joined the Board in her position as MD Phoenix on 12 July 2023. All remuneration amounts for 2023/24 are prorated over the period from this date. Promoted to Interim CEO on

21 February 2024 and subsequently appointed as CEO on 10 May 2024. Sam’s salary was unadjusted during the few days in 2023/24 when she served as Interim CEO. Annual

salary of £400,000 (including a salary supplement of £91,725) for the period of acting as Interim CEO from 1 March 2024 to 9 May 2024 and annual salary of £421,000 from

10 May 2024. Base salary amounts for 2024/25 are prorated over these periods and include the Interim CEO salary supplement, being £76,345 from 1 March 2024 to 9 May

2024 and £340,652 from 10 May 2024 to 28 February 2025. Annual bonus for 2024/25 is based on annual target achievements applied to the prorated base salary, being

£63,710 from 1 March 2024 to 9 May 2024 and £284,274 from 10 May 2024 to 28 February 2025. Annual pension for 2024/25 is based on the employer contribution percentage

applied to the prorated base salary, being £3,054 from 1 March 2024 to 9 May 2024 and £13,626 from 10 May 2024 to 28 February 2025.

5 Joined the Board on 1 February 2024.

6 Includes additional fees during 2024/25 and 2023/24 for work on special Board subcommittees investigating undisclosed share dealingsby former directors (Shruthi Chindalur

£50,888 in 2024/25 and £1,900 in 2023/24, Mike Phillips £50,350 in 2024/25 and £13,250 in 2023/24, Erika Schraner £nil in 2024/25 and £32,000 in 2023/24).

7 Joined the Board on 1 June 2024.

8 Resigned from the Board on 24 March 2024. All fees earned were in respect of services performed while a director.

9 Erika received £1,833 for her role as Interim Audit Chair from 24 March 2024 to 31 May 2024. See more on page 92.

Annual Report and Accounts 2024

25 119

GOVERNANCE REPORT

Directors’ remuneration report continued

Annual bonus for the year ended 28 February 2025 (audited)

For the 2024/25 financial year, executive directors were eligible for an annual discretionary bonus, for which performance

objectives with suitably challenging 12-month goals were set at the beginning of the period. These comprised measures based

80% on adjusted operating profit (adjusted for amortisation and share-based payment charges) and 20% on key ESG and other

strategic objectives, which itself comprised five equally weighted metrics (cash conversion, employee net promoter score (eNPS),

customer net promoter score (NPS), gross margin and ESG rating). Sliding scale threshold-to-stretch targets operate for all the

metrics other than for cash conversion and ESG rating, for which straightforward stretch targets were set. This was considered

appropriate for these two metrics because the objectives were quantitative measures and their weightings not material in isolation.

The committee also evaluated each objective considering industry standards and the company’s specific context. No

discretionary adjustments were made to the annual bonus outcome for the year.

The maximum annual bonus payable for the CEO and CFO was 125% of salary, against which bonuses of 67% of maximum (84% of

salary) were earned.

The targets and the related performance outcomes were as follows:

Performance metric

Proportion of

bonus determined

by metric

Threshold performance

(25% of max payable)

Target performance

(50% of max payable)

Stretch performance

(100% of max payable)

Actual

performance

Bonus

earned

(% of max for

this element)

Bonus

earned

(% of salary)

Adjusted operating

profit (£’000)

100% 63,985 71,094 74,6 49 72,355 68% 68%

Key strategic objectives

Proportion of bonus

determined by

metric n/a n/a Target

Actual

performance

Bonus

earned

(% of max)

Bonus

earned

(% of salary)

Cash conversion 5% n/a n/a Not <100% 104% 100% 5%

Employee

satisfaction (eNPS)

5% 60 n/a 70 57 0% 0%

Customer

satisfaction (NPS)

5% 60 n/a 70 79 100% 5%

Gross margin

5% 7.6% n/a 9% 7.8% 14% 1%

ESG rating

(ISSQuality Score)

5% n/a n/a Not >3 2 100% 5%

Total 125% 67% 84%

1 Measured on a straight-line basis between threshold and stretch.

2 As per ISS Quality Score methodology, where 1/10 equates to a higher level of environmental and social disclosure, and to a lower level of governance risk.

No discretionary adjustments were made to the annual bonus outcome for the year.

For all executive directors, two thirds of the bonus is paid in cash and one third will be deferred in shares, which will vest after a two-

year period.

PSP awards vesting for the year ended 28 February 2025 (audited)

Awards were granted on 1 June 2022 under the PSP to the CEO (before joining the Board and in her position as MD Phoenix) and

the CFO, and these were based on performance targets measured over the three financial years to 28 February 2025. A total of

75% of the award was subject to an adjusted earnings per share (EPS) growth condition and 25% subject to a relative total

shareholder return (TSR) condition.

Performance metric

Proportion of

PSP determined

by metric

Threshold

performance

(20% vesting)

Intermediate

performance

(50% vesting)

Stretch

performance

(10 0% vesting)

Actual

performance

Vesting level

(% of max for

this element)

Vesting level

(% of overall

award)

Adjusted EPS

75% 18.4 pence 21.7 pence 24.1 pence 25.1 pence 100% 75%

Relative TSR

25% Median n/a Upper quartile 66th of 142 32% 8%

Total vesting 83%

1 Measured on a straight-line basis between threshold to intermediate and between intermediate to stretch. The adjusted EPS target was based on performance in the final

yearof the performance period.

2 Measured on a straight-line basis between median and upper quartile relative to the constituents of the FTSE 250 Index (excluding investment trusts and real estate

investmenttrusts).

120 Bytes Technology Group plc

GOVERNANCE REPORT

The committee considered that the underlying performance of the company and the performance of the executive directors fully

justified the level of vesting. The committee did not consider it necessary to apply any discretion to adjust the outcome for these awards.

PSP shares granted

(1 June 2022)

Shares after performance

conditions applied

Share price at end of performance

period (three-month average to

28 February 2025)

Value at end of

performance period

Sam Mudd 52,230 43,402 439 pence £190,537

Andrew Holden 102,580 85,243 439 pence £374,215

1 Values shown in the Single total figure of remuneration for each director table are based on the share price at the end of the performance period of 440 pence less the

1-pence-exercise price per share. None of the value is as a result of share price growth over the period.

PSP awards granted in the year (audited)

The table below provides details of share awards made to the executive directors on 1 June 2024.

Date of award Type of award

Basis of award

(% of salary)

Number of shares

under award

Face value of

award (£’000)

% vesting at

threshold

End of vesting

period

Sam Mudd

1 June 2024 Nil cost option 137% 99,700 557 20% 31 May 2027

Andrew Holden 1 June 2024 Nil cost option 150% 91,600 512 20% 31 May 2027

1 The number of awards was calculated using a share price of £5.71, which was based on the company’s average closing share price on 29, 30 and 31 May 2024.

2 Sam Mudd’s award was calculated on a prorated basis over the financial year based on an award equivalent to 100% of salary over the period she was Interim CEO (with her

salary for this purpose excluding her Interim CEO salary supplement) and 150% of salary over the period she was CEO. At the date of grant, this equated to 137% of her annual

salary in her position as CEO, with the applicable salary being £59,121 from 1 March 2024 to 9 May 2024 and £510,390 from 10 May 2024 to 28 February 2025, with 10,350 and

89,350 awards, respectively.

The PSP awards granted on 1 June 2024 are subject to a combination of performance conditions, being adjusted EPS and TSR

compared with the constituents of the FTSE 250 Index (excluding investment trusts and real estate investment trusts) measured

over a three-year performance period. The targets are set out here:

Measure Weighting Performance period Targets

Adjusted EPS 75% Three financial years to

28 February 2027

Adjusted EPS of 23.6 pence (20%

vests) rising on a straight-line basis to

50% vesting for 27.7 pence, and on a

straight-line basis again to full vesting

for achievement of 30.6 pence

Relative TSR versus constituents

ofthe FTSE 250 Index (excluding

investment trusts and real estate

investment trusts)

25% Three financial years to

28 February 2027

Median (20% vests) rising on a

straight-line basis to full vesting

forupper-quartile performance

1 The adjusted EPS target is based on performance in the final year of the performance period.

In addition, the committee retains discretion to reduce the overall PSP vesting level (potentially to zero) if it considers that the

underlying business performance of the company does not justify it.

A two-year holding period will apply to any awards vesting, and recovery and withholding provisions will apply in line with our

approved policy.

Annual Report and Accounts 2024

25 121

GOVERNANCE REPORT

Directors’ remuneration report continued

Executive directors’ share options outstanding at the year end (audited)

Details of share options outstanding at the financial year end are shown in the following table.

Scheme

No. of options

at 29 February

2024

Options

granted

in year

Options

forfeited

in year

Options

exercised

in year

No. of options

at 28 February

2025

Date of

grant

Share price

at date of

grant

Exercise

price

Date from

which

exercisable

Expiry

date

Sam Mudd

PSP 137,85 5 – – – 137,85 5 17 December

2020

£3.43 £0.01 17 December

2023

16 December

2030

CSOP 50,000 – – – 50,000 1 June

2021

£5.00 £5.00 1 June

2024

31 May

2031

SAYE 4,500 – – 4,500 – 22 June

2021

£4.53 £4.00 1 August

2024

1 February

2025

PSP 52,230 – – – 52,230 1 June

2022

£4.53 £0.01 1 June

2025

31 May

2032

PSP 60,300 – – – 60,300 1 June

2023

£5 .16 £0.01 1 June

2026

31 May

2033

DBP

– 5,902 – – 5,902 1 June

2024

£5.59 £0.01 1 June

2026

1 December

2026

PSP

– 99,700 – – 99,700 1 June

2024

£5.59 £0.01 1 June

2027

31 May

2034

SAYE

– 4,059 – – 4,059 28 June

2024

£5.59 £4.57 1 August

2027

1 February

2028

Andrew Holden

CSOP 45,000 – – – 45,000 1 June

2021

£5.00 £5.00 1 June

2024

31 May

2031

SAYE 4,500 – – 4,500 – 22 June

2021

£4.53 £4.00 1 August

2024

1 February

2025

DBP

10,305 611 – 10,916 – 1 June

2022

£4.53 £0.01 1 June

2024

1 December

2024

PSP 102,580 – – – 102,580 1 June

2022

£4.53 £0.01 1 June

2025

31 May

2032

DBP 20,376 – – – 20,376 1 June

2023

£5 .16 £0.01 1 June

2025

1 December

2025

PSP 102,400 – – – 102,400 1 June

2023

£5 .16 £0.01 1 June

2026

31 May

2033

DBP

– 10,773 – – 10,773 1 June

2024

£5.59 £0.01 1 June

2026

1 December

2026

PSP

– 91,600 – – 91,600 1 June

2024

£5.59 £0.01 1 June

2027

31 May

2034

SAYE

– 4,059 – – 4,059 28 June

2024

£5.59 £4.57 1 August

2027

1 February

2028

Key

PSP: Performance Share Plan

DBP: Deferred Bonus Plan

CSOP: Company Share Option Plan

SAYE: Save As You Earn Plan (ShareSave)

1 The face value of the DBP awards granted on 1 June 2024 to Sam Mudd and Andrew Holden on the date of the grants was £32,992 and £60,221, respectively. These grants are

not subject to any other performance conditions.

2 The face value of the PSP awards granted on 1 June 2024 to Sam Mudd and Andrew Holden on the date of the grants was £557,323 and £512,044, respectively. These grants

are subject to performance conditions set out in notes above.

3 The face value of the SAYE awards granted on 28 June 2024 to Sam Mudd and Andrew Holden on the date of the grants was £22,690 and £22,690, respectively. These grants

are not subject to any other performance conditions.

4 Options granted in the year relate to dividend equivalents under the terms of the DBP plan.

The closing share price of the company’s ordinary shares at 28 February 2025 was 419 pence, and the closing price range during

the year ended 28 February 2025 was 405 pence to 604 pence.

122 Bytes Technology Group plc

GOVERNANCE REPORT

Statement of directors’ shareholding and share interests (audited)

The following table shows the interests of directors and those connected to them in BTG’s ordinary shares at 28 February 2025.

No. of shares

owned outright

No. of shares

owned outright

No. of options

vested,

unexercised

and not subject

to performance

No. of options

unvested

and not subject

to performance

No. of options

unvested

and subject to

performance

Shareholding as

% of salary at

28 February

2025

Shareholding

guideline as

% of salary

Company

shareholding

guideline met

Current directors

29 February

2024/

date of joining

28 February

2025/

date of leaving

Sam Mudd 81,548 99,948 187, 85 5 9,961 212,230 101% 200% No

Andrew Holden 72,990 83,237 45,000 35,208 296,580 100% 200% No

Patrick De Smedt 102,592 102,592 – – – n/a n/a n/a

Shruthi Chindalur – – – – – n/a n/a n/a

Ross Paterson

– 15,831 – – – n/a n/a n/a

Erika Schraner 10,037 10,037 – – – n/a n/a n/a

Anna Vikström

Persson

– 9,141 – – – n/a n/a n/a

Former directors

Mike Phillips

20,000 20,000 – – – n/a n/a n/a

1 Sam Mudd joined the Board in 2023 and Andrew Holden in 2021. Both have increased their shareholdings since the time of appointment and will continue to move towards the

200% shareholding guideline as share options awarded under their PSP, DBP and SAYE vest each year and can be exercised. Shares held at the year end are valued using the

closing share price on 28 February 2025, so variations in the percentage of salary may arise because of share price changes, even though the underlying quantity of shares

maybe increasing.

2 Joined the Board on 1 June 2024 – the opening number of shares is at the date of appointment to the Board.

3 Resigned from the Board on 24 March 2024 – the number of shares and share interests is at the date of resigning from the Board.

The interests of those directors holding a position on the Board at the year end did not change between 28 February 2025 and the

date of signing the Annual Report and Accounts 2024/25.

Payments for loss of office and to past directors (audited)

Mike Phillips

Mike Phillips resigned from the Board on 25 March 2024. On ceasing to be a director, he received £6,583 in respect of fees in

relation to his last month of March 2024, and £63,600 in relation to additional services provided to the company during the

investigation following the resignation of Neil Murphy (of which £13,250 had already been accrued in 2023/24). He received

nopayments in lieu of notice or for loss of office and no other payments have been or will be made to Mike Phillips.

Neil Murphy

As announced on 21 February 2024, and described fully in Annual Report and Accounts 2023/24, Neil Murphy resigned as CEO

ofBTG with immediate effect from that date. Neil Murphy did not receive, nor will receive, any remuneration after the date of his

resignation and all his unvested share-based awards were forfeited in full on the date of his resignation.

In addition, under the terms of a settlement agreement reached between the company and Neil Murphy on 9 May 2024, the

committee exercised its powers to pursue clawback for the full amount of the cash portion of all annual bonuses awarded to

himsince IPO (on a net-of-tax basis reflecting the actual amounts received). The total agreed was £274,825, payable to the

company within 28 days from the date of the agreement. The committee can confirm that this amount was received in full within

theallotted timeframe.

Annual Report and Accounts 2024

25 123

GOVERNANCE REPORT

Directors’ remuneration report continued

Recovery and withholding

provisions

Robust recovery and withholding

provisions – that is, malus and clawback–

operate for our annual bonus, Deferred

Bonus Plan andPSP.

The following provisions apply:

• • Before payment of an annual bonus

orvesting of a Deferred Bonus Plan

orPSP award, the committee may

operate malus to cancel the award

• • For up to two years following the

payment of an annual bonus award,

the committee may operate clawback

to require the repayment of any cash

amount paid or may cancel any

deferred bonus award, and

• • For up to two years after the vesting

ofa PSP award, the committee may

operate clawback to cancel the award

during the holding period (or require

repayment of the award if it has been

released before the end of the holding

period), reduce future vesting under

the company’s share plans or reduce

the number of shares already vested

but unexercised.

The circumstances in which malus and

clawback may be operated are as follows:

• • The company materially misstated its

financial results

• • The relevant individual’s conduct

being such that it would entitle (or,

where the employment has terminated

before the date on which the Board

becomes aware of such act or

omission, would have entitled) the

Group to terminate the employment

summarily

• • A material error having occurred in

determining whether any performance

conditions relating to the bonus or

PSP award have been met (or any

other material error having occurred

in calculating the sum that was

awarded as a bonus or the size of the

PSP award)

• • Circumstances that, in the opinion of

the Board, would have (or would have,

if made public) a sufficiently

significant impact on the reputation of

the company or Group

• • The company becomes insolvent or

otherwise suffers a corporate failure

and the Board determines that such

circumstances arose from events

occurring (in whole or substantial part)

during any period in which the relevant

individual was a participant, or

• • Such other exceptional circumstances

that, at the Remuneration Committee’s

absolute discretion, justify such

reimbursement being imposed.

Our clawback provisions were invoked

during the 2024/25 financial year in

relation to the termination arrangements

of former CEO, Neil Murphy, details of

which are set out on page 123.

Non-executive directors’

fees(audited)

In last year’s Annual Report we reported

that, as a consequence of undisclosed

share dealings by two former directors

during 2023/24, it was necessary for the

Board to establish specifically constituted

additional subcommittees of the Board to

investigate these matters, and to oversee

and direct the work of both internal teams

and external professional advisors who

were appointed to support these

processes. To recognise the complexity

of such additional responsibilities and the

additional time commitment, which

extended beyond the normal

responsibilities of non-executive directors,

additional remuneration was considered

for those non-executives serving on and

leading these subcommittees. The

majority of this additional work took place

during the last quarter of the 2023/24

financial year and also continued into the

first quarter of 2024/25.

It was agreed by the Board that it was

appropriate and in shareholders’ best

interests that BTG non-executive

directors should receive additional fees

per additional day worked on these

matters – and that the levels of such fees

should reflect an equivalent day rate set

by reference to continuing normal BTG

non-executive director fees for roles

fulfilled (non-executive base fees and

additional fees for chairing Board

subcommittees).

In 2024/25, such additional fees

comprised £50,350 to Mike Phillips

(2023/24: £13,250), £50,888 to Shruthi

Chindalur (2023/24: £1,900) and £nil to

Erika Schraner (2023/24: £32,000). All

these amounts are reflected in the Single

total figure of remuneration for each

director table on page 119. This additional

work ended during 2024/25, and no extra

fees will be payable in future years in

relation to this issue.

Following the resignation of Mike Phillips

from the Board and his role as Audit

Committee Chair, Erika Schraner was

appointed as Interim Chair of the Audit

Committee effective 25 March 2024. She

served in this capacity until 31 May 2024,

receiving a fee of £1,833 for her service

inthe role during this period. On Ross

Paterson’s appointment to the Board and

his taking up the Audit Committee Chair

role on 1 June 2024, Erika stepped down

from her interim position.

124 Bytes Technology Group plc

GOVERNANCE REPORT

Total shareholder return performance

The graph below shows the value at 28 February 2025 of £100 invested in BTG on 11 December 2020, the date of commencement

of conditional trading on the London Stock Exchange, compared with £100 invested in the FTSE 250 Index (excluding investment

trusts and real estate investment trusts) on the same date, on the assumption that dividends are reinvested for additional equity.

The FTSE 250 Index (excluding investment trusts and real estate investment trusts) was selected as a comparator because BTG is

a constituent. This allows our performance to be compared against the index as a whole.

£ 11 December 2020 28 February 2021 28 February 2022 28 February 2023 29 February 2024 28 February 2025

Bytes Technology Group

FTSE 250 Index (excluding investment trusts

and real estate investment trusts)

Source: Datastream

(an LSEG product)

100

150

200

250

155

108

100

171

111

118

153

108

220

171

107

CEO and Interim CEO remuneration

The total remuneration figure for the CEO in 2024/25 is shown in the table below, along with the value of bonuses paid, and PSP

vesting, as a percentage of the maximum opportunity. This table will build to show a rolling 10 years’ worth of data over time.

Year CEO or Interim CEO

CEO single

total figure of

remuneration

Annual bonus

payout %

of maximum

PSP

vesting %

of maximum

2024/25 Sam Mudd

£978,001 67% 83%

2023/24 Sam Mudd

2,3

£11,412 63% n/a

2023/24 Neil Murphy

2,3

£415,675 0% n/a

2022/23 Neil Murphy

£776,301 94% n/a

2021/22 Neil Murphy

£739,364 95% n/a

2020/21 Neil Murphy

3,4

£92,025 100% n/a

1 Interim CEO until her appointment as CEO on 10 May 2024.

2 Appointed Interim CEO on 21 February 2024 and her total remuneration is the prorated figure for nine days from that date to 29 February 2024. Neil Murphy’s total remuneration

covers the period until his resignation on 21 February 2024.

3 No PSP awards capable of vesting in relation to the period.

4 Total remuneration is the prorated, post-IPO figure (for the period from admission to the London Stock Exchange to 28 February 2021).

Annual Report and Accounts 2024

25 125

GOVERNANCE REPORT

Directors’ remuneration report continued

Change in directors’ remuneration compared with other employees

The following table shows the percentage change in the remuneration of the executive directors and non-executive directors

compared with the average change for all employees of the parent company for the year ended 28 February 2025. 2022/23 was

the first year in which this table was included, because it represented the first time where two full years of data had been available

since IPO. This table will build up over time to cover a rolling five-year period.

Current directors

Salary and fees

(% change)

Taxable benefits

(% change)

Annual bonus

(% change)

Sam Mudd

2024/25 121.9% 994.9% 244.2%

2023/24 n/a n/a n/a

2022/23 n/a n/a n/a

Andrew Holden

2024/25 4.5% 571.5% 57.8 %

2023/24 5% 20.9% (38.3%)

2022/23 198.6% n/a 195.4%

Patrick De Smedt 2024/25 9.5% n/a n/a

2023/24 0% n/a n/a

2022/23 4% n/a n/a

Shruthi Chindalur

2024/25 1,748.5% n/a n/a

2023/24 n/a n/a n/a

2022/23 n/a n/a n/a

Ross Paterson

2024/25 n/a n/a n/a

2023/24 n/a n/a n/a

2022/23 n/a n/a n/a

Erika Schraner

2024/25 (12.5%) n/a n/a

2023/24 77. 2% n/a n/a

2022/23 108.0% n/a n/a

Anna Vikström Persson

2024/25 n/a n/a n/a

2023/24 n/a n/a n/a

2022/23 n/a n/a n/a

Mike Phillips

2024/25 (33.8%) n/a n/a

2023/24 18.2% n/a n/a

2022/23 4% n/a n/a

All employees

2024/25 4.5% 4.5% 7.1%

2023/24 6.7% 24.2% (6.3%)

2022/23 5.7% 6.2% 21.7%

1 Salary and annual bonus percentage increase in 2024/25 were in relation to comparison with pro rata salary and bonus earned in 2023/24 since date of appointment to the

Board on 12 July 2023. Sam Mudd was MD Phoenix from her appointment to the Board on 12 July 2023, and was subsequently appointed as Interim CEO on 21 February 2024

and as CEO on 10 May 2024. Taxable benefits percentage increase in 2024/25 relates to the grant of discounted SAYE options during the year (2023/24: nil).

2 Salary and annual bonus percentage increase in 2022/23 were in relation to comparison with pro rata salary and bonus earned in 2021/22 since date of appointment to the

Board on 21 October 2021. Taxable benefits percentage increase in 2024/25 relates to the grant of discounted SAYE options during the year (2023/24: nil).

3 Fee increase in 2024/25 was in relation to comparison with pro rata fees earned in 2023/24 since date of appointment to the Board on 1 February 2024.

4 Joined the Board on 1 June 2024.

5 Fee increase in 2022/23 was in relation to comparison with pro rata fees earned in 2021/22 since date of appointment to the Board on 1 September 2021. Fee increase in

2023/24 relates to amounts received for additional work on Board subcommittees established to investigate undisclosed share dealings.

6 Resigned from the Board on 24 March 2024. Fee increase in 2023/24 relates to amounts received for additional work on Board subcommittees established to investigate

undisclosed share dealings.

7 Reflects the average percentage change in salary, benefits and bonus for employees of the parent company (excluding the Board). To aid comparison, the employees of the

parent company are those full-time employees who were employed over the complete two-year period.

126 Bytes Technology Group plc

GOVERNANCE REPORT

Relative importance of spend on pay

The following table shows the actual spend on pay for all BTG

employees relative to dividends.

Year Staff costs Dividends

2024/25 £ 97.2m £42.8m

2023/24 £88.4m £36.6m

% increase 10% 17%

CEO-to-employee pay ratio

The table below sets out the ratio between the total pay of the

CEO and that of employees at the 25th, 50th (median) and 75th

percentiles of BTG’s UK employees. This table will expand to

show a rolling 10 years’ worth of data over time.

Year Method 25th percentile 50th percentile 75th percentile

2024/25 A 26:1 17:1 11:1

2023/24 A 12:1 8:1 5:1

2022/23 A 22:1 15:1 8:1

2021/22 A 24:1 15:1 8:1

2020/21 A 14:1 9:1 5:1

The 25th, 50th and 75th percentile-ranked individuals were

identified using ‘option A’ in the reporting regulations, selected

on the basis that this is the most robust and statistically accurate

means of identifying the relevant people. Given ratios could be

unduly affected by joiners and leavers who may not participate

in all remuneration arrangements in the year of joining and

leaving, the committee has modified the statutory basis slightly

to exclude anyone not employed throughout the entire financial

year. The 25th, 50th and 75th percentile employees were

identified at 28 February 2025.

The CEO pay figure is derived from the total remuneration set

out in the Single total figure of remuneration for each director

table on page 119.

Pay in respect of the CEO and employees is shown in the table

below (the employee pay includes the same pay elements as for

the CEO).

CEO All employees

Year

25th

percentile

50th

percentile

75th

percentile

2024/25

salary

£416,997 £30,590 £41,900 £65,000

2024/25

total pay

£978,001 £37,865 £57, 412 £92,633

The significant increase in the ratio from 2023/24 to 2024/25

primarily reflects the removal of any bonus to the former CEO,

Neil Murphy, for the 2023/24 financial year as a result of his

resignation on 21 February 2024, and the absence of any PSP

vesting for the same year. Given this effect, and the limited

number of years for which we have reported data so far, there

isnot yet any clear trend in the median pay ratio over the period

of financial years covered by the pay ratio table. After taking

thisinto account, the committee is satisfied that the ratio is

reasonable and consistent with our wider policies on employee

pay, reward and progression.

External appointments

At the date of this report, neither of the executive directors are

directors of any other listed company.

Executive directors’ service contracts

The table below summarises key details of the executive

directors’ contracts.

Date of joining

BTG

Date of service

contract

Notice period

(from either party)

Sam Mudd 2018

12 July 2023 6 months

Andrew Holden 2021

1 November 2021 6 months

1 Appointed to the BTG Board on 12 July 2023, and then as Interim CEO on

21 February 2024 and CEO on 10 May 2024. She was previously MD Phoenix

from2014. Phoenix was acquired by Bytes UK in September 2017.

2 Joined BTG as COO on 1 June 2021 and joined the Board as CFO on 21 October 2021.

Non-executive directors’ letters of appointment

The table below summarises key details of the non-executive

directors’ contracts.

Date of

joiningBTG

Date of letter

ofappointment

Date of last

re-election

Notice period

(from either party)

Patrick

De Smedt

27 July

2020

27 July

2020

11 July

2024

1 month

Erika

Schraner

1 September

2021

1 September

2021

11 July

2024

1 month

Shruthi

Chindalur

1 February

2024

30 January

2024

11 July

2024

1 month

Ross

Paterson

1 June

2024

9 May

2024

11 July

2024

1 month

Anna

Vikström

Persson

1 June

2024

9 May

2024

11 July

2024

1 month

Annual Report and Accounts 2024

25 127

GOVERNANCE REPORT

Directors’ remuneration report continued

Implementation of policy for the year ending 28 February 2026

Base salary

The committee reviews the executive directors’ base salaries annually, with any increases taking effect from 1 March each year.

The rationale for the changes for the year ending 28 February 2026 is explained in the Remuneration Committee Chair’s

introduction on pages 112 to 115, and the committee’s decisions have been informed by independent benchmarking analysis.

Weconsidered two relevant peer groups for this purpose:

1 A group of 12 UK FTSE-listed technology companies that represent sector-specific peers to BTG, with BTG being a mid-sized

entity in this group in terms of market capitalisation

2 A pan-sector group of UK-listed companies (excluding financial services) of a similar size to BTG (with market capitalisation in

the range of £800 million to £1.2 billion).

The charts below show the summary benchmarking analysis, prepared by BTG’s independent remuneration advisors for the two

peer groups considered.

Median

Technology sector

Lower quartile to median

Median to upper quartile

BTG

2024/25

2025/26

Pan-sector

Lower quartile to median

Median to upper quartile

CEO positioning v peers £’000

1,250 1,750 2,2501,000750 1,500 2,000 2,500

300 400 500 600 700 800

Base salary

Total target remuneration

300 400 500 600 700 800

750 1,250 1,750 2,2501,000 1,500 2,000 2,500

CFO positioning v peers £’000

Base salary

Total target remuneration

128 Bytes Technology Group plc

GOVERNANCE REPORT

As set out in the introduction from our Remuneration Committee Chair on pages 112 to 115, after careful consideration of pace of

growth, complexity and the interests of stakeholders – including consultation with our largest shareholders, as well as key proxy

agencies – the committee has decided to increase the CEO’s and CFO’s base salaries this year, as permitted within our existing

policy. The comparison to both peer groups showed that the compensation levels of Sam and Andrew fall well below the market

levels (below the lower quartile), both in terms of fixed pay and total remuneration. The committee considered this positioning

relative to the market to be disproportionately low, which gave the committee additional comfort that the salary adjustments

represent a prudent and fair investment in leadership stability and continued performance.

The decision was also informed by Sam and Andrew’s contributions to our operating profit and EPS performance in the five

financial years since IPO, with Sam initially as MD Phoenix and then CEO, and Andrew as CFO since 2021, as shown below.

Financial performance since IPO 2021 2022 2023 2024 2025

Operating profit (£m) 26.8 42.2 50.9 56.7 66.4

Basic EPS (pence) 8.52 13.72 16.88 19.55 22.78

The resulting base salaries effective from 1 March 2025 are:

Base salary

2024/25

Base salary

2025/26 Increase

Sam Mudd

£421,000 £459,000 9.0%

Andrew Holden £348,926 £381,000 9.2%

1 Up to 9 May 2024, Sam Mudd’s substantive role was as MD Phoenix. From 9 May 2024, Sam was Interim CEO for which she was paid a salary supplement of £91,725 a year

(increasing her total salary over this period to £400,000 a year). On 10 May 2024, Sam was appointed as CEO and her salary was increased to £421,000 a year.

The increases of 9% and 9.2%, respectively, for the executive directors compare to the overall workforce increase of 3% for 2025/26.

Pension and benefits

No changes are proposed to pension and benefits for 2025/26. Executive directors will continue to receive benefits that include

private medical and life insurance, and pension contributions of up to 4% for the CEO and CFO, in line with policy and with the level

provided to the wider workforce.

Annual bonus

The maximum opportunity under the annual bonus plan will remain at 125% of salary for the CEO and CFO. One third of the total

bonus payment will be deferred into shares for two years, and recovery and withholding provisions will apply in line with our

approved policy.

Annual bonus performance structure and measures will be aligned with BTG strategy and budget to incentivise the achievement

ofannual delivery targets.

Bonuses will be based on targets relating to operating profit (72% weighting, previously 80%) and a number of key strategic

objectives (28% weighting, previously 20%). The strategic objectives will include metrics relating to specific financial targets

andESG measures (including employee and customer NPS and an external ESG quality assessment). The committee has

notdisclosed the detailed performance targets for the forthcoming year in advance, because it considers that they include

commercially sensitive matters. Retrospective disclosure of the performance against targets will be made in next year’s annual

report on remuneration, if the targets are no longer considered commercially sensitive at that time.

Annual Report and Accounts 2024

25 129

GOVERNANCE REPORT

Directors’ remuneration report continued

Performance Share Plan

The executive directors will participate in the PSP in 2025/26. The CEO and CFO will receive awards of 150% of salary. Vesting will

be subject to the following performance conditions.

Measure Weighting Performance period Targets

EPS 75% Three financial years to

29 February 2028

EPS of 26.3 pence (20% vests) rising

on a straight-line basis to 50% vesting

for 28.8 pence, and on a straight-line

basis again to full vesting for

achievement of 32.0 pence

Relative TSR versus constituents

ofthe FTSE 250 Index (excluding

investment trusts and real estate

investment trusts)

25% Three financial years to

29 February 2028

Median (20% vests) rising on a

straight-line basis to full vesting for

upper-quartile performance

1 The EPS target is based on performance in the final year of the performance period.

In addition, the committee retains discretion to reduce the overall PSP vesting level (potentially to zero) if it considers that the

underlying business performance of the company does not justify it.

A two-year holding period will apply to any awards vesting, and recovery and withholding provisions will apply in line with our

approved policy.

Non-executive directors’ fees

For 2025/26, the non-executive directors’ fees are:

Fee 2024/25 Fee 2025/26 % increase

Chair £205,000 £205,000 0%

Base fee £57,000 £57,000 0%

Senior independent director fee £11,000 £11,000 0%

Audit Committee Chair fee £11,000 £11,000 0%

Remuneration Committee Chair fee £11,000 £11,000 0%

ESG Committee Chair fee £11,000 £11,000 0%

Designated non-executive director for employee engagement £8,000 £8,000 0%

Remuneration voting outcomes

At our 2024 Annual General Meeting, our remuneration report was approved with 98.60% of votes cast in favour, 1.40% of votes

against and 1,635 votes withheld. At the same meeting, our remuneration policy was approved with 98.71% of votes cast in favour,

1.29% of votes against and 1,669 votes withheld.

On behalf of the Board.

Erika Schraner

Remuneration Committee Chair

12 May 2025

130 Bytes Technology Group plc

GOVERNANCE REPORT

Directors’ report

This report summarises other useful information, from our Companies

Act disclosures and going concern statement, to the details of our

main shareholders and our forthcoming Annual General Meeting.

BTG’s directors present this report together with the audited

consolidated financial statements for the year ended

28 February 2025.

The report has been prepared in accordance with the

requirements outlined in The Large and Medium-sized

Companies and Groups (Accounts and Reports) Regulations

2008, and forms part of the management report as required

under Disclosure Guidance and Transparency Rule (DTR) 4.

Certain information that fulfils the requirements of the directors’

report can be found elsewhere in this report and is referred to

below. The information is incorporated into this directors’

reportby reference.

The directors’ report is made up of the governance report and

this report. Other relevant information that is incorporated by

reference can be found in the strategic report, including:

• • An outline of the important events that occurred during the

year, on pages 6 to 11

• • An indication of likely future developments in the business

ofBTG and its subsidiaries, Bytes Software Services and

Phoenix Software, on pages 8 to 11

• • Financial performance, on pages 28 to 33

• • Business environment, on pages 18 to 19

• • Outlook and financial management strategies, including

particulars of any important events affecting the company

since the year end (with subsidiary undertakings included in

the consolidated statements), on pages 8 to 11 and 23 to 27

• • Internal controls, principal risks and risk management

framework, on pages 47 to 56

• • Stakeholder engagement, including employee engagement,

on pages 86 to 91

• • Directors’ biographies, on pages 78 to 79

• • Section 172 statement, on page 74.

Requirements of UK Listing Rule 6.6.1

Information to be included in the Annual Report and Accounts

under UK Listing Rule (UKLR) 6.6.1 may be found as follows:

Relevant Listing Rule Pages

UKLR 6.6.1R (3): details of any long-term

incentive schemes

118 to 130

UKLR 6.6.1R (4): details of any arrangements

under which a director has waived or agreed to

waive any emoluments from the company or

any subsidiary undertaking

118 to 130

The strategic report and the directors’ report together form

themanagement report for the purposes of the DTR 4.1.8R.

Information relating to financial instruments can be found on

page 175 and is incorporated by reference. For information

onour approach to social, environmental and ethical matters,

please refer to our strategic report, including our Task Force on

Climate-related Financial Disclosures (TCFD) statement on pages

58 to 67, and our ESG Committee report on pages 106 to 107.

Financial risk management instruments

The company’s exposure to financial risks and how these risks

affect the company’s future financial performance is disclosed

in notes 23 and 24 to the financial statements.

Research and development

The company did not carry out any research activities during

theyear (2023/24 research and development: none). However,

BTG did undertake work to develop new internal and customer-

facing software systems during the year – for more details,

seepage 163.

Annual Report and Accounts 2024

25 131

GOVERNANCE REPORT

Directors

The directors who held office at 28 February 2025, and up to the

date of this report, are set out below and on pages 78 to 79 with

their biographies. Changes to the composition of the Board or

committees during the year ended 28 February 2025, and up to

the date of approval of the financial statements, were:

• • Our new Board-level ESG Committee, which took effect on

1 June 2024, comprising Anna Vikström Persson (Chair),

Patrick De Smedt, Erika Schraner, Shruthi Chindalur and

Ross Paterson

• • Erika Schraner, who assumed the role of senior independent

director and Interim Audit Committee Chair on 24 March 2024,

and who stepped down as Interim Audit Committee Chair on

1 June 2024 while remaining a member of the committee

• • Ross Paterson, who was appointed as an independent

non-executive director on 1 June 2024 and Audit

CommitteeChair

• • Anna Vikström Persson, who was appointed as an

independent non-executive director on 1 June 2024

• • Sam Mudd, who was appointed as CEO on 10 May 2024

• • Shruthi Chindalur, who assumed the role of designated

non-executive director for employee engagement on

25 March 2024, a role previously held by Erika Schraner

• • Mike Phillips, who resigned as an independent

non-executive director on 24 March 2024.

Directors

as at 28 February 2025

Name

Effective date of joining

BTGBoard Position

Patrick De Smedt 15 October 2020 Independent

non-executive

Chair

Sam Mudd 12 July 2023 CEO (appointed

on 10 May 2024)

Andrew Holden 21 October 2021 CFO

Erika Schraner 1 September 2021 Independent

non-executive

director

Shruthi Chindalur 1 February 2024 Independent

non-executive

director

Ross Paterson 1 June 2024 Independent

non-executive

director

Anna Vikström

Persson

1 June 2024 Independent

non-executive

director

The company’s Articles of Association govern the appointment,

removal and replacement of directors and explain the powers

given to them. All directors will stand for re-election at the

Annual General Meeting on 2 July 2025. The remuneration of

the directors, including their respective shareholdings in the

company, is set out in the directors’ remuneration report on

pages 118 to 130.

Avoiding conflicts of interest

Since their respective dates of appointment, and up to the date

of this report, no director held any beneficial interest in any

contract significant to the company’s business, other than a

contract of employment.

The Board regularly reviews each director’s interests outside

BTG and considers how the Chair ensures they are applying

objective judgement in their role, as required by the UK

Corporate Governance Code. To help directors avoid conflicts,

or possible conflicts, of interest, the Board must first give

clearance to any potential conflicts, including directorships or

other interests in outside companies and organisations. This is

recorded in the company’s statutory records.

Should a director become aware that they, or their connected

parties, have an interest in an existing or proposed transaction

with the Group, they are required to notify the Board or the

Group Company Secretary as soon as reasonably possible. In

such an instance, unless allowed by the company’s Articles of

Association, the director cannot take part in any decisions about

the contract or arrangement.

Directors’ and officers’ liability insurance and

indemnification of directors

The company maintains directors’ and officers’ liability

insurance, which gives appropriate cover should legal action be

brought against its directors. The company has also provided an

indemnity for its directors, which is a qualifying third-party

indemnity provision, for the purposes of Section 234 of the

Companies Act 2006. This was in place for the duration of the

financial year ended 28 February 2025 and up to the date of

approval of the financial statements.

Share capital

The issued share capital of the company at 28 February 2025

was 241,068,265 ordinary shares of £0.01 nominal value, with

no shares held in treasury. A total of 73,904 additional shares

were issued after the year ended 28 February 2025, relating to

the company’s long-term incentive plans. Note 20 to the

consolidated financial statements on page 177 contains full

details of the issued share capital. As far as the company is

aware, there are no restrictions on the voting rights attached to

its ordinary shares and there are no agreements that may result

in restrictions in the transfer of securities or voting rights. No

securities carry any special rights.

An analysis of shareholdings is shown on page 133. The closing

mid-market price of a share of the company on 28 February

2025, together with the range since admission to the London

Stock Exchange, is also shown on page 125.

Directors’ report continued

132 Bytes Technology Group plc

GOVERNANCE REPORT

Dividends and dividend policy

Our dividend policy remains a progressive one, which targets

anannual dividend of 40–50% of post-tax pre-exceptional

earnings to shareholders in each financial year. Subject to any

cash requirements for ongoing investment, the Board considers

returning excess cash to shareholders, as and when appropriate.

We recommend a final dividend of 6.9 pence per ordinary share,

taking the total full-year dividend to 10.0 pence per ordinary

share. In addition, we recommend a special dividend of

10.0 pence per ordinary share is paid at the same time as the final

dividend. Shareholders will be asked to approve the final and

special dividends at the Annual General Meeting on 2 July 2025.

Substantial shareholdings

At 30 April 2025, the company had been notified under the

DTRs, or had ascertained from its own analysis, that the

following held notifiable interests in the voting rights in the

company’s issued share capital of 3% or more of its ordinary

share capital:

Shareholder

Number of

votingrights

% of

voting rights

Coronation Fund Managers 26,619,15 4 11.0 4%

JPMorgan Asset Management 21,744,729 9.02%

Biltron 18,262,478 7.57%

BlackRock 12,830,424 5.32%

Vanguard Group 12,221,026 5.07%

Quilter Cheviot Investment

Management

7,6 61,78 3 3.18%

Committees of the Board

The Board has established Audit, Nomination, Remuneration

and ESG Committees. The Audit Committee has been

mandated to also oversee and monitor BTG’s enterprise risk

management. For more details of these committees, including

membership and key focus areas for 2024/25, see their

respective reports in the corporate governance report.

Remuneration voting outcomes

At our 2024 Annual General Meeting, the remuneration

reportwas approved, with98.60% of votes cast in favour,

1.40%of votes against and 1,635 votes withheld. Our current

remuneration policy was also approved by shareholders at our

2024 Annual General Meeting, with 98.71% of votes cast in

favour, 1.29% of votes against and 1,669 votes withheld. The

remuneration policy will apply for a period of three years until

the 2027 Annual General Meeting, unless a new or revised

policy is presented before then.

Companies Act 2006 disclosures

In accordance with Section 992 of the Companies Act 2006,

thedirectors disclose the following information:

• • The company’s capital structure and voting rights are

summarised in note 20, and there are no restrictions on

voting rights nor any agreement between holders of

securities that result in restrictions on the transfer of

securities or on voting rights

• • The company does not hold any shares in treasury

• • No securities exist that carry special rights with regard

tothecontrol of the company

• • Details of the substantial shareholders and their

shareholdings in the company are listed in the previous table

• • The Deferred Bonus Plan has been implemented from

1 June 2022. The number of shares awarded under the

company’s Deferred Bonus Plan for the year ended

28 February 2025 is set out in note 27 and shown on pages

181 to 182

• • The appointment and replacement of directors, amendment

to the Articles of Association and powers to issue or buy

back the company’s shares are contained in the Articles of

Association of the company and the Companies Act 2006

• • There exist no agreements to which the company is party

that may affect its control following a takeover bid

• • No agreements exist between the company and its directors

providing for compensation for loss of office that may occur

because of a takeover bid.

Articles of Association

The company’s Articles of Association set out the rights of

shareholders, including voting rights, distribution rights,

attendance at general meetings, powers of directors,

proceedings of directors, borrowing limits and other

governance controls. A copy of the Articles of Association

canbe requested from the Group Company Secretary at

wk.groenewald@bytesplc.com.

Political donations

No donations were made for the year ended 28 February 2025

and up to the date of this report (2023/24: £nil). Generally, the

company’s policy remains to not make political donations, either

directly or through a subsidiary. However, authority will again be

sought at the 2025 Annual General Meeting to authorise the

company to make political donations provided that the

aggregate amount is not more than £50,000. This resolution

hasbeen proposed to ensure BTG and its subsidiaries do not,

because of the wide-reaching definition in the Companies Act

2006, unintentionally breach the act.

Annual Report and Accounts 2024

25 133

GOVERNANCE REPORT

Equality and diversity

The company has an equal opportunities philosophy that

endeavours to treat individuals fairly and not to discriminate on

the basis of gender, disability, race, national or ethnic origin,

sexual orientation or marital status. Applications for

employment are fully considered on their merits, and employees

are given appropriate training and equal opportunities for

career development and promotion.

The company is committed to ensuring that adequate policies

and procedures are in place to give disabled applicants training

to perform safely and effectively, and to provide development

opportunities to ensure they reach their full potential. If

someone becomes disabled during their employment with the

company, the company will seek to provide, wherever possible,

continued employment on normal terms and conditions.

Adjustments will be made to the environment and duties or,

alternatively, suitable new roles within the company will be

secured with additional training where necessary.

The company values involving its people and continues to keep

them informed about what affects them as employees. This is

done using a variety of methods, including town hall meetings,

whole-company meetings, team briefings, company days,

emails and the intranet. Shruthi Chindalur assumed the role of

designated non-executive director for employee engagement in

March 2024, a role previously held by Erika Schraner. At team

meetings, managers are responsible for ensuring that information

sharing, discussion and feedback take place on a regular basis.

As a result of these meetings, management can communicate the

financial and economic factors affecting the company and make

sure that the views of employees are considered in company

decisions that are likely to affect theirinterests.

Going concern

BTG’s business activities, financial position and cash flows,

together with the factors likely to affect its future performance

and position, are set out in the strategic report on pages 1 to 74.

Details of its objectives and policies on financial risk

management are set out in note 23 to the financial statements

on pages 178 to 180.

The directors have made appropriate enquiries and consider

that BTG has adequate resources to continue to operate for the

foreseeable future, which comprises the period of at least 12

months from the date of approval of the financial statements,

that is 12 May 2025. There are no material uncertainties that

would prevent the directors from being unable to make this

statement. Accordingly, the directors continue to adopt the

going concern basis in preparing BTG’s financial statements.

Events after the reporting period

There were no events after the end of the reporting period that

require disclosure.

Auditor and disclosure of information

The directors who held office at the date of approval of this

directors’ report confirm that, as far as they are each aware:

• • There is no relevant audit information of which the

company’s auditor is unaware

• • Each director has taken all the steps they ought to have

taken as a director to make themselves aware of any relevant

audit information, and to establish that the company’s

auditor is aware of that information.

This confirmation is given and should be interpreted in

accordance with the provisions of Section 418 of the Companies

Act 2006. Separate resolutions will be proposed at the

forthcoming Annual General Meeting concerning the auditor’s

appointment and to authorise the Board to agree its remuneration.

Annual General Meeting

The 2025 AGM will be held at 14:00 (BST) on Wednesday,

2 July2025, at Bytes House, Randalls Way, Leatherhead

KT227TW, UK.

The company will make use of the electronic voting facility

provided by its registrars, Computershare Limited. The facility

includes CREST voting for members holding their shares in

uncertificated form. For more information, please refer to the

section on online services and electronic voting in the notes to

the notice of meeting.

The notice of Annual General Meeting and an explanation of the

resolutions being put to the meeting are set out in the notice of

meeting accompanying this Annual Report. The directors fully

support all the resolutions set out in the notice and encourage

shareholders to vote in favour of each of them, as they intend to

in respect of their own shareholdings.

The directors’ report was approved by the Board of directors on

12 May 2025 and is signed on its behalf.

WK Groenewald FCG

Group Company Secretary

12 May 2025

Directors’ report continued

134 Bytes Technology Group plc

GOVERNANCE REPORT

Statement of directors’

responsibilities

This report outlines our directors’ responsibilities

for ensuring that our Annual Report and financial

statements comply with regulation.

The directors are responsible for preparing the Annual Report

and the financial statements in accordance with applicable law

and regulation.

Company law requires the directors to prepare financial

statements for each financial year. Under that law, the directors

have elected to prepare the Group financial statements in

accordance with UK-adopted International Accounting

Standards (IAS), and the parent company financial statements

in accordance with UK Generally Accepted Accounting Practice

(UK Accounting Standards and applicable law), including

Financial Reporting Standard 101 Reduced Disclosure

Framework (FRS 101). Under company law, the directors must

not approve the financial statements unless they are satisfied

that they give a true and fair view of the state of affairs of the

Group and the company and of the profit or loss of the Group

and the company for that period.

In preparing these financial statements the directors are

required to:

• • Select suitable accounting policies and then apply them

consistently

• • Make judgements and accounting estimates that are

reasonable and prudent

• • Present information, including accounting policies, in a

manner that provides relevant, reliable, comparable and

understandable information

• • Provide additional disclosures when compliance with the

specific requirements in IFRS (and in respect of the parent

company financial statements, FRS 101) is insufficient to

enable users to understand the impact of particular

transactions, other events and conditions on the Group and

company financial position and financial performance

• • In respect of the Group financial statements, state whether

UK-adopted IAS have been followed, subject to any material

departures disclosed and explained in the financial

statements

• • In respect of the parent company financial statements, state

whether applicable UK Accounting Standards have been

followed, subject to any material departures disclosed and

explained in the financial statements

• • Prepare the financial statements on the going concern basis

unless it is inappropriate to presume that the company and/

or the Group will continue in business.

The directors are responsible for keeping adequate accounting

records that are sufficient to show and explain the company’s

and Group’s transactions and disclose with reasonable accuracy

at any time the financial position of the company and the Group,

and enable them to ensure that the company and the Group

financial statements comply with the Companies Act 2006.

Theyare also responsible for safeguarding the assets of the

Group and parent company and for taking reasonable steps to

prevent and detect fraud and other irregularities.

Under applicable law and regulations, the directors are also

responsible for preparing a strategic report, directors’ report,

directors’ remuneration report and corporate governance

statement that comply with that law and those regulations. The

directors are responsible for the maintenance and integrity of

the corporate and financial information included on the

company’s website.

Directors’ confirmations pursuant to FCA’s

Disclosure Guidance and Transparency Rule 4

The directors confirm, to the best of their knowledge, that the:

• • Consolidated financial statements, prepared in accordance

with international accounting standards in conformity with

the requirements of the Companies Act 2006, give a true

and fair view of the assets, liabilities, financial position and

profit of the parent company and undertakings included in

the consolidation, taken as a whole

• • Annual Report, including the strategic report, includes a fair

review of the development and performance of the business

and the position of the company and undertakings included in

the consolidation, taken as a whole, together with a description

of the principal risks and uncertainties that they face.

The directors consider that the Annual Report and Accounts,

taken as a whole, is fair, balanced and understandable, and

provides the information necessary for shareholders to assess

the Group and parent company’s position and performance,

business model and strategy. In the case of each director in

office at the date on which the directors’ report is approved:

• • As far as the director is aware, there is no relevant audit

information of which the Group and parent company’s

auditor is unaware

• • They have taken all the steps that they ought to have taken

as a director to make themselves aware of any relevant audit

information and to establish that the Group and parent

company’s auditor is aware of that information.

This responsibility statement was approved by the Board of

directors on 12 May 2025 and is signed on its behalf.

Sam Mudd

CEO

12 May 2025

Andrew Holden

CFO

12 May 2025

Annual Report and Accounts 2024

25 135

GOVERNANCE REPORT

Financial statements

137 Independent auditor’s report

147 Consolidated financial statements

151 Notes to the consolidated

financialstatements

186 Parent company financial statements

188 Notes to the financial statements

What outcomes do you seek to drive

through your financial reporting?

We’re passionate about delivering

the high-quality financial data

andanalysis that underpins the

business’s decision making, and

supporting our stakeholders in their

understanding of BTG’s results,

business model and strategy.

Paul Emms

Director of Group Finance

Bytes Technology Group plc136

Independent auditor’s report to the members

ofBytesTechnology Group

Opinion

In our opinion:

• • Bytes Technology Group plc’s group financial statements and parent company financial statements (the “financial

statements”) give a true and fair view of the state of the group’s and of the parent company’s affairs as at 28 February 2025 and

of the group’s profit for the year then ended;

• • the group financial statements have been properly prepared in accordance with UK adopted international accounting standards;

• • the parent company financial statements have been properly prepared in accordance with United Kingdom Generally

Accepted Accounting Practice; and

• • the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

We have audited the financial statements of Bytes Technology Group plc (the ‘parent company’) and its subsidiaries (the ‘group’)

for the year ended 28 February 2025 which comprise:

Group Parent company

Consolidated balance sheet as at 28 February 2025 Balance sheet as at 28 February 2025

Consolidated income statement for the year then ended Statement of changes in equity for the year then ended

Consolidated statement of changes in equity for the year then ended Related notes 1 to 11 to the financial statements including

material accounting policy information

Consolidated statement of cash flows for the year then ended

Related notes 1 to 30 to the financial statements, including

materialaccounting policy information

The financial reporting framework that has been applied in the preparation of the group financial statements is applicable law and

UK adopted international accounting standards. The financial reporting framework that has been applied in the preparation of the

parent company financial statements is applicable law and United Kingdom Accounting Standards, including FRS 101 “Reduced

Disclosure Framework” (United Kingdom Generally Accepted Accounting Practice).

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our

responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial

statementssection of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide

abasis for our opinion.

Independence

We are independent of the group and parent in accordance with the ethical requirements that are relevant to our audit of the

financial statements in the UK, including the FRC’s Ethical Standard as applied to listed public interest entities, and we have

fulfilled our other ethical responsibilities in accordance with these requirements.

The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the group or the parent company and

weremain independent of the group and the parent company in conducting the audit.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the

preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the group and parent

company’s ability to continue to adopt the going concern basis of accounting included

• • Performing a walkthrough of the group’s financial close process to confirm our understanding of management’s going

concern assessment process and engaging with management early to ensure all key risk factors identified were considered

intheir assessment.

• • Obtaining management’s going concern assessment, including cashflow forecasts and covenant calculations, covering

theperiod to 31 August 2026. We then performed procedures to confirm the clerical accuracy of the underlying model.

• • Assessing the group’s base scenario for consistency with cash flow forecasts used in the goodwill impairment assessment

over which we have performed detailed audit procedures to challenge the base case assumptions including validating the

credit facility assumptions.

Annual Report and Accounts 2024

25 137

FINANCIAL STATEMENTS

Independent auditor’s report to the members ofBytesTechnology Group continued

• • The group has modelled a base scenario and then two downside scenarios, being a severe but plausible downside scenario

and a stressed scenario in order to incorporate unexpected changes to the forecasted liquidity of the group. We have

performed audit procedures to challenge the base case and the assumptions included in each modelled scenario for the cash

forecast and covenant calculation. We have considered the potential impact of geopolitical and macroeconomic risks such

asincreases in cost of sales inflation and competition leading to margin pressure, wages inflation, supply chain inflation and

rising interest rates impacting customer spending and customer payments.

• • We noted that the key assumptions present were forecast gross invoiced income and related growth rates, gross profit and

related growth rates, headcount and base pay growth rates, overhead growth rates and debtor days. We agreed the forecasts

to Board approved budgets and performed enquiries with management to understand the basis of the key assumptions. We

performed procedures to assess their appropriateness, such as reviewing the growth rate assumptions within the context of

historic performance. Additionally, where possible, we corroborated management’s assumptions to external data points such

as economic forecasts and competitor trading updates.

• • We critically assessed management’s ability to accurately forecast through lookback analysis on the last three years of historic

financial data.

• • We reviewed management’s stress test of their cash forecasts and covenant calculations in order to quantify then assess the

likelihood of the downside scenarios required to exhaust the group’s forecast liquidity and breach the group’s covenant ratios.

• • Considering the impact and feasibility of potential mitigating activities that are within control of the group, such as freezing

planned growth in headcount, pay rises, and reducing dividend payments.

• • Reviewing the group’s going concern disclosures included in the Annual Report in order to assess their completeness and

conformity with the reporting standards, market practice and FRC guidance.

Our Key Observations

• • As of 28 February 2025, the group had cash and cash equivalents of £113.1 million. The group has no borrowings but has

anundrawn RCF facility of £30 million which runs for three years, until 17 May 2026. The new facility includes an optional

one-year extension to 17 May 2027 and a non-committed £20 million accordion to increase the availability of funding should

itbe required for future activity.

• • The directors’ assessment is that Bytes Technology Group plc has sufficient liquidity and headroom in cash throughout the

going concern period to 31 August 2026. Management’s severe but plausible scenario demonstrated that a worsening of all

key assumptions against the base case would not result in liquidity concerns. This is prior to further potential mitigations

modelled by management. The changes in assumptions modelled are considered to be highly unlikely based on historical

financial performance.

• • We have not identified any material climate-related risks that should be incorporated into Bytes Technology Group plc’s

forecasts to 31 August 2026.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,

individually or collectively, may cast significant doubt on the group and parent company’s ability to continue as a going concern

fora period until 31 August 2026 being the going concern assessment period.

In relation to the group and parent company’s reporting on how they have applied the UK Corporate Governance Code, we have

nothing material to add or draw attention to in relation to the directors’ statement in the financial statements about whether the

directors considered it appropriate to adopt the going concern basis of accounting.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections

ofthis report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the

group’s ability to continue as a going concern.

Overview of our audit approach

Audit scope

փ We performed an audit of the complete financial information of three components and

auditprocedures on specific balances for a further four components.

փ The components where we performed full audit procedures accounted for 100% of the

group’s Profit before tax, 100% of Revenue and 99% of Total assets; and we performed

specified procedures on the remaining 1% of Total Assets.

Key audit matters

փ Risk of misstatement of revenue recognised at or near period end

փ Risk of incorrect IFRS 15 presentation and disclosure in respect of principal versus agent

փ Risk of misstatement of rebate and other vendor incentives receivable at period end

Materiality

փ Overall group materiality of £3.7 million which represents 5% of 2025 group’s actual

reported profit before tax.

138 Bytes Technology Group plc

FINANCIAL STATEMENTS

An overview of the scope of the parent company and group audits

Tailoring the scope

In the current year our audit scoping has been updated to reflect the new requirements of ISA (UK) 600 (Revised). We have

followed a risk-based approach when developing our audit approach to obtain sufficient appropriate audit evidence on which to

base our audit opinion. We performed risk assessment procedures, to identify and assess risks of material misstatement of the

group financial statements and identified significant accounts and disclosures.

BTG trades predominantly in the UK through two trading entities, Bytes Software Services Limited (BSS) and Phoenix Software

Limited (PSL). We identified 3 components – BSS, PSL and BTG – as individually relevant to the group due to the significant risks

oran area of higher assessed risk of material misstatement of the group financial statements being associated with BSS and PSL,

and all these components of the group as individually relevant due to materiality or financial size of the component relative to the

group. These three individually relevant components are assigned as full scope.

For those individually relevant components, we identified the significant accounts where audit work needed to be performed at

these components by applying professional judgement, having considered the group significant accounts on which centralised

procedures is performed, the reasons for identifying the financial reporting component as an individually relevant component

andthe size of the component’s account balance relative to the group significant financial statement account balance.

We then considered whether the remaining group significant account balances not yet subject to audit procedures, in aggregate,

could give rise to a risk of material misstatement of the group financial statements. We selected no additional components of the

group to include in our audit scope to address these risks, however, have performed analytical procedures over these components.

Having identified the components for which work will be performed, we determined the scope to assign to each component.

The three full scope components on which audit procedures were performed, located in two different locations in the UK,

contributed 100% (2024: 100%) of the group’s Profit before tax, 100% (2024: 100%) of the group’s Revenue and 99% (2024: 99%)

of the group’s Total assets. The remaining two specific scope components contributed <1% (2024: <1%) of the group’s Profit

before tax, 0% (2024: 0%) of the group’s Revenue and <1% (2024: 1%) of the group’s Total assets. To respond to any potential

risksof material misstatement to the group financial statements, we performed other procedures on these components, including

analytical review, confirmation of bank balances, and verification that intercompany and intra-group investment balances were

eliminated as part of the consolidation.

Changes from the prior year

Our full scope locations remain consistent with the prior year. Our specific scope entities have been refined to include only the

active holding companies while the remaining companies in the group are dormant companies and are covered as part of the audit

tail. We believe our overall coverage is comparable and appropriate for the risk of the business.

Involvement with component teams

In establishing our overall approach to the group audit, the Senior Statutory Auditor, James Harris, determined the type of work

that needed to be undertaken at each of the components.

As Bytes group management and trading components (Bytes Software Services and Phoenix Software) operate primarily

intheUK, we have performed the audit using a single integrated group team. Therefore, of the three full scope components,

auditprocedures were performed directly by the primary audit team. Overseen by the Senior Statutory Auditor, the group audit

team designs, executes, reviews and concludes on all work performed, operating as a single audit team across both locations.

This integrated team performed all audit procedures at all three full scope components as well as procedures at other scope

components. Procedures over all components were overseen by the Senior Statutory Auditor including the design, execution

andconclusion on all work performed.

Climate change

Stakeholders are increasingly interested in how climate change will impact Bytes Technology Group plc. The group has

determined that the most significant future impacts from climate change on their operations will be regulatory changes. These are

explained on pages 58 to 67 in the Task Force On Climate Related Financial Disclosures and on page 56 in the principal risks and

uncertainties. They have also explained their climate objectives on page 42. All of these disclosures form part of the “Other

information,” rather than the audited financial statements. Our procedures on these unaudited disclosures therefore consisted

solely of considering whether they are materially inconsistent with the financial statements, or our knowledge obtained in the

course of the audit or otherwise appear to be materially misstated, in line with our responsibilities on “Other information”.

In planning and performing our audit we assessed the potential impacts of climate change on the group’s business and any

consequential material impact on its financial statements.

Annual Report and Accounts 2024

25 139

FINANCIAL STATEMENTS

Independent auditor’s report to the members ofBytesTechnology Group continued

Our audit effort in considering the impact of climate change on the financial statements was focused on evaluating management’s

assessment of the impact of climate risk, physical and transition, their climate plans and objectives, the effects of material climate

risks disclosed on pages 58 and 67; and the adequacy of the group’s disclosures in the financial statements and the conclusion

that no issues were identified that would impact on the accounting judgements and estimates in the current year and no material

impact on assets and liabilities as at 28 February 2025. We also assessed the directors’ considerations of climate change risks in

their assessment of going concern and viability and associated disclosures.

Based on our work we have not identified the impact of climate change on the financial statements to be a key audit matter or to

impact a key audit matter.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial

statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to

fraud) that we identified. These matters included those which had the greatest effect on: the overall audit strategy, the allocation of

resources in the audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit

of the financial statements, and in our opinion thereon, and we do not provide a separate opinion on these matters.

Risk Our response to the risk

Key observations communicated

totheAudit Committee

Risk of misstatement of revenue

recognised at or near period end

Refer to the Audit Committee Report

(page 94); Accounting policies (pages

157-158); and Note 3 of the Consolidated

Financial Statements (pages 165-166).

The group has reported revenue of

£217.1 million (2024: £207.0 million).

Revenue reported in accordance with

IFRS 5 Revenue from Contracts with

Customers is a key financial metric for

thebusiness. Gross Invoiced Income (GII),

anon-IFRS alternative performance

measure (APM), is also used as a key

performance indicator assessed by

stakeholders.

Compensation incentives are based on

gross profit or adjusted operating profit

targets, creating a risk of revenue

misstatement through management

override.

Management’s process for accounting

forcertain revenue transactions,

particularly the review process at or

nearthe year end is mostly manual

andtherefore susceptible to error

(eitherdeliberate or without intent).

There is therefore a risk that revenue

isrecognised prematurely or fictitiously

around period end or revenue is held back

to distort earnings between periods.

The overall risk of revenue recognition

hasremained consistent compared to

theprior year.

We have performed the following key audit

procedureson revenue transactions (included in

grossinvoiced income):

• • Reconfirmed our understanding of management’s

revenue recognition point by revenue stream.

• • Reconfirmed our understanding of the process of

entering into a contract and agreeing terms with

customers and how contracts are therefore assessed

and set up for revenue recognition.

• • Assessed the appropriateness of revenue cut-off

byindependently testing a sample of transactions

recorded one week either side of year end, due to

theconcentration of sales entries in this period as

identified through data analytics by vouching to

evidence of satisfaction of the related performance

obligation. The testing was disaggregated by

revenuesteam.

• • Tested a sample of credit notes issued subsequent

tothe year end.

• • Tested a sample of sales transactions, such as

services revenue transactions deferred at year end

and recalculated the deferred elements to obtain

assurance over the calculation of deferred revenue.

• • In order to address the risk of management override,

we tested a sample of manual journal entries relating

to revenue recorded at or near year end by verifying to

supporting documentation and credit notes issued

subsequent to the year end, including management’s

cut-off journals.

• • Performed disaggregated analytical review by

revenue stream to understand the key driver behind

the change in revenue over the period.

• • Utilised data analytics to analyse 100% sales related

journal entry data to track sales from revenue, to

accounts receivable and through to cash collection.

We used this analysis to validate the appropriateness

of the transaction flow and tested a sample of

transactions to determine if the journals accurately

reflected the substance of the transaction recorded.

We performed full scope audit procedures over this

riskarea in two locations, which covered 100% of

therisk amount.

Through our procedures

performed, we have not

identified any unsupported

manual adjustments to revenue.

We conclude that the revenue

recognised at or near year end

was properly accounted for

andthat revenue has been

appropriately recognised in

accordance with IFRS 15.

140 Bytes Technology Group plc

FINANCIAL STATEMENTS

Risk Our response to the risk

Key observations communicated

totheAudit Committee

Risk of incorrect IFRS 15 presentation

and disclosure in respect of principal

versus agent

Refer to the Audit Committee Report

(page 94); Accounting policies (pages

157-158); and Note 3 of the Consolidated

Financial Statements (pages 165-166).

The group has recognised an agency

adjustment of £1,882.7 million

(2024:£1,616.0 million) in respect of

income to be recognised net as agent

under IFRS 15.

The group makes a judgement over

thelevel of control for all products and

services sold and continues to assess this

position. There is a risk that the reported

revenue may be incorrectly presented as a

result of incorrectly assessing whether the

group has control over the products or

services sold and consequently if the

group is principal or agent in its

arrangements with customers.

In the prior years, the group reassessed

itsaccounting policy in light of the IFRIC

agenda decision and determined that it is

acting as an agent for all software sales.

Although the reassessment has resulted

ina decrease in the level of judgement

required to establish the level of control

over products and services to categorise

the transactions between product

categories and principal or agent, and

thesize of adjustment remains high.

We performed the following key audit procedures:

• • Reconfirmed our understanding of management’s

processes, methodologies and judgements in

identifying and categorising revenue transactions

asprincipal (gross) or agent (net).

• • Reperformed management’s calculation to ensure

this has been performed correctly, i.e. that the

revenue, cost of sales and margin agency adjustment

is correct. We also ensured that management’s

methodologies and categorisations appropriately

consider new product types identified during the year.

• • Performed disaggregated analytical review by

revenue stream to understand the key drivers behind

changes in revenue over the period.

• • Independently tested a sample of transactions across

the year to determine the group’s control over the

product or service including:

փ Verified the product or service type by obtaining

evidence for each transaction and agreeing back to

underlying data, such as customer purchase order,

to determine the group’s categorisation of the

product or service.

փ Corroborated the related cost for the sample

selected by tracing through to supporting

purchaseinvoices.

փ Assessed whether principal (gross) or agent (net)

treatment and the corresponding agency

adjustment is appropriate.

• • Tested that the methodology utilised to calculate

theadjusted performance measure (‘APM’) ‘gross

invoiced income’ is consistent with the FY 2024

Annualreport, assessing management’s rationale

forincluding the APM and ensuring that the amount

reported is reconciled to reported revenue.

We performed full scope audit procedures over this

riskarea in two locations, which covered 100% of

therisk amount.

We concluded that the

presentation of revenue

transactions is appropriate

andhas been prepared in

accordance with IFRS 15.

Annual Report and Accounts 2024

25 141

FINANCIAL STATEMENTS

Independent auditor’s report to the members ofBytesTechnology Group continued

Risk Our response to the risk

Key observations communicated

totheAudit Committee

Risk of misstatement of rebates and

other vendor incentives receivable

atperiod end

Refer to the Audit Committee Report

(page 94); Accounting policies (page 159).

The group has reported a year-end rebate

and other vendor incentives receivable of

£5.6 million (2024: £5.7 million).

While most rebates are agreed with the

supplier and received during the year,

there is a degree of estimation at or around

the year end when the rebate is accrued

ahead of the full information on the rebate

being available. The resulting estimation

uncertainty around the rebate receivable

balance therefore provides scope for

management to influence reported

amounts through the estimated rebate

adjustments posted to cost of sales.

Accounting for most of the rebate income

balance does not carry an estimation

element, as it can be corroborated to cash

and credit notes received from the vendor

in the year. The key judgement we focus

on is with regards to the rebate receivable

balance and corresponding income at

year end, where the amounts recognised

are often based on sales information,

which at the time that the rebate is

recognised, has not yet been verified

bythe vendor.

In the current period there have been

changes in certain vendor incentive plans,

including a rate reduction, a shift from

transaction-based rewards and a greater

focus on activity-based and usage-based

incentives. This change heightens the risk

around the recognition of receivables at

period end for rebates and other vendor

incentives and the corresponding income.

We have performed the following key audit procedures:

• • Updated our understanding of the procedures and

controls in place over the recognition and recording

ofrebates and vendor incentives including

understanding the key assumptions used within

management’s determination of the estimate.

• • Obtained an understanding of the changes in the

process of rebates and other vendor incentives in

thecurrent year.

• • Inquired of the group’s and individual operating

entity’s management, regarding any new or

significantrebate and vendor incentive agreements

during the period.

• • Assessed the appropriate accounting in respect of

timing of recognition of receivables and income for

new or significant rebates and vendor incentive

agreements based on the updated terms.

• • Reviewed management’s estimate and basis of the

rebates and vendor incentive receivable and

corresponding income.

• • Assessed the accuracy of management’s previous

estimates tested as at 29 February 2024 and

31 August 2024.

• • For rebate receivables, we obtained a breakdown

ofthe rebate receivable balances at period end and

selected samples to vouch back to third party source

documentation, including subsequent credit notes

received or cash receipts.

• • For rebate receivables, we performed analytical

procedures on rebates by vendors in order to identify

anomalous transactions or unusual trends.

• • For other vendor incentives, we obtained

management’s estimate and performed look back

analysis of the other vendor incentives accrual as at

28 February 2025 (at year end).

• • For other vendor incentives, we tested a sample of

incentives transactions and obtained evidence of

subsequent credit notes received or cash receipts to

assess the appropriateness of the accruals recorded

as of the period end.

We performed full scope audit procedures over this

riskarea in two locations, which covered 100% of

therisk amount.

We concluded that the rebates

and other vendor incentives

receivable at the year end and

the corresponding income is

appropriate in accordance

withIFRS.

In the prior year, our auditor’s report included a key audit matter in relation to the risk arising from the undisclosed share trading by

directors. In the current year, this is no longer considered a key audit matter as it was resolved in the prior year.

142 Bytes Technology Group plc

FINANCIAL STATEMENTS

Our application of materiality

We apply the concept of materiality in planning and performing the audit, in evaluating the effect of identified misstatements

ontheaudit and in forming our audit opinion.

Materiality

The magnitude of an omission or misstatement that, individually or in the aggregate, could reasonably be expected to influence

theeconomic decisions of the users of the financial statements. Materiality provides a basis for determining the nature and extent

ofour audit procedures.

We determined materiality for the group to be £3.7 million (2024: £3.0 million), which is 5% (2024: 5%) of profit before tax.

We believe that profit before tax provides the most relevant measure of underlying performance to the stakeholders of the group.

The increase in the current year is in line with the increase in profitability in the year.

We determined materiality for the parent company to be £7.0 million (2024: £9.0 million), which is 1% (2024: 1%) of total equity.

Performance materiality

The application of materiality at the individual account or balance level. It is set at an amount to reduce to an appropriately low level

the probability that the aggregate of uncorrected and undetected misstatements exceeds materiality.

On the basis of our risk assessments, together with our assessment of the group’s overall control environment, our judgement

wasthat performance materiality was 75% (2024: 50%) of our planning materiality, namely £2.8 million (2024: £1.5 million).

Wehave set performance materiality at this percentage due to our overall risk assessment and expectations of misstatements.

Audit work at component locations for the purpose of obtaining audit coverage over significant financial statement accounts is

undertaken based on a percentage of total performance materiality. The performance materiality set for each component is based

on the relative scale and risk of the component to the group as a whole and our assessment of the risk of misstatement at that

component. In the current year, the range of performance materiality allocated to components was £0.6 million to £2.3 million

(2024: £0.5 million to £1.3 million).

Reporting threshold

An amount below which identified misstatements are considered as being clearly trivial.

We agreed with the Audit Committee that we would report to them all uncorrected audit differences in excess of £0.2 million

(2024:£0.1 million), which is set at 5% of planning materiality, as well as differences below that threshold that, in our view,

warranted reporting on qualitative grounds.

We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in light

ofother relevant qualitative considerations in forming our opinion.

Other information

The other information comprises the information included in the annual report set out on pages 1 to 135, including the Strategic

report set out on pages 1 to 74, and the Governance report set out on pages 75 to 135, other than the financial statements and our

auditor’s report thereon. The directors are responsible for the other information contained within the annual report.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in

this report, we do not express any form of assurance conclusion thereon.

Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent

with the financial statements or our knowledge obtained in the course of the audit or otherwise appears to be materially misstated.

If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives

rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that

there is a material misstatement of the other information, we are required to report that fact.

We have nothing to report in this regard.

Annual Report and Accounts 2024

25 143

FINANCIAL STATEMENTS

Independent auditor’s report to the members ofBytesTechnology Group continued

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, the part of the directors’ remuneration report to be audited has been properly prepared in accordance with

theCompanies Act 2006.

In our opinion, based on the work undertaken in the course of the audit:

• • the information given in the strategic report and the directors’ report for the financial year for which the financial statements

are prepared is consistent with the financial statements; and

• • the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.

• • the information about internal control and risk management systems in relation to financial reporting processes and about

share capital structures, given in compliance with rules 7.2.5 and 7.2.6 in the Disclosure Rules and Transparency Rules

sourcebook made by the Financial Conduct Authority (the FCA Rules), is consistent with the financial statements and has

beenprepared in accordance with applicable legal requirements; and

• • information about the company’s corporate governance statement and practices and about its administrative, management

and supervisory bodies and their committees complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA Rules.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the course

ofthe audit, we have not identified material misstatements in the strategic report or the directors’ report or the information about

internal control and risk management systems in relation to financial reporting processes and about share capital structures,

givenin compliance with rules 7.2.5 and 7.2.6 of the FCA Rules.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report

toyou if, in our opinion:

• • adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been

received from branches not visited by us; or

• • the parent company financial statements and the part of the Directors’ Remuneration Report to be audited are not in

agreement with the accounting records and returns; or

• • certain disclosures of directors’ remuneration specified by law are not made; or

• • we have not received all the information and explanations we require for our audit; or

• • a Corporate Governance Statement has not been prepared by the company.

Corporate Governance Statement

We have reviewed the directors’ statement in relation to going concern, longer-term viability and that part of the Corporate

Governance Statement relating to the group and company’s compliance with the provisions of the UK Corporate Governance

Code specified for our review by the UK Listing Rules.

Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate

Governance Statement is materially consistent with the financial statements or our knowledge obtained during the audit:

• • Directors’ statement with regards to the appropriateness of adopting the going concern basis of accounting and any material

uncertainties identified set out on page 134;

• • Directors’ explanation as to its assessment of the company’s prospects, the period this assessment covers and why the period

is appropriate set out on pages 73 to 74;

• • Directors’ statement on whether it has a reasonable expectation that the group will be able to continue in operation and meets

its liabilities set out on page 134;

• • Directors’ statement on fair, balanced and understandable set out on page 135;

• • Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on pages 47 to 56;

• • The section of the annual report that describes the review of effectiveness of risk management and internal control systems

set out on pages 95 to 96; and

• • The section describing the work of the audit committee set out on pages 92 to 101.

144 Bytes Technology Group plc

FINANCIAL STATEMENTS

Responsibilities of directors

As explained more fully in the directors’ responsibilities statement set out on page 135, the directors are responsible for the

preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as

thedirectors determine is necessary to enable the preparation of financial statements that are free from material misstatement,

whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group and parent company’s ability to

continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of

accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no

realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material

misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance

isahigh level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a

material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or

inthe aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these

financial statements.

Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our

responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to

fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example,

forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting

irregularities, including fraud is detailed below.

However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the

company and management.

• • We obtained an understanding of the legal and regulatory frameworks that are applicable to the group and determined that the

most significant are those related to the reporting framework (UK adopted international accounting standards, the Companies

Act 2006, the UK Corporate Governance Code 2018 and in regard to the parent company financial statements, UK GAAP

including FRS 101) and the relevant tax compliance regulations in the UK.

• • We understood how Bytes Technology Group Plc is complying with those frameworks by making enquires of management and

those responsible for legal, compliance and governance matters. We corroborated our enquiries through our review of board

minutes, discussions with the Audit Committee, Directors and any correspondence from regulatory bodies and those

responsible for legal and compliance procedures. With regards to governance controls, we considered the implementation

and continued monitoring of improved controls for share dealings and share register analysis.

• • We assessed the susceptibility of the group’s financial statements to material misstatement, including how fraud might occur

by meeting with management from various parts of the business to understand where it considered there was susceptibility to

fraud and by assessing key assumptions over significant estimates made by management for evidence of bias. We also

considered the performance targets and their propensity to influence efforts made by management to manage revenue and

earnings. We considered the programmes and controls that the group has established to address risks identified, or that

otherwise prevent, deter and detect fraud; and how senior management monitors those programmes and controls.

• • Where the risk was considered to be higher, including areas impacting group key performance indicators or management

remuneration, we performed audit procedures to address each identified fraud risk or other risk of material misstatement.

These procedures included those on revenue recognition detailed above as well as testing manual journals; and were

designed to provide reasonable assurance that the financial statements were free from fraud and error. We performed journal

entry testing, including manual consolidation journals and journals that indicated large or unusual transactions based on our

understanding of the business.

• • Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations.

Our procedures involved reviewing Board minutes, external legal advice and reports to the Board on the conclusion of the

investigations and inquiries with management and directors. Our procedures included a focus on compliance with the

accounting, governance and regulatory frameworks and other relevant legislations through obtaining sufficient audit evidence

in line with the level of risk identified, in conjunction with compliance with relevant legislation, including tax computations and

returns and corroborated that dividend payments complied with the relevant legal requirements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s

website at https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Annual Report and Accounts 2024

25 145

FINANCIAL STATEMENTS

Independent auditor’s report to the members ofBytesTechnology Group continued

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act

2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to

state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume

responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for

the opinions we have formed.

James Harris (Senior statutory auditor)

for and on behalf of Ernst & Young LLP, Statutory Auditor

Southampton

12 May 2025

146 Bytes Technology Group plc

FINANCIAL STATEMENTS

Consolidated statement of profit or loss

For the year ended 28 February 2025

		Year ended	Year ended
		28 February	29 February
		2025	2024
	Note	£’000	£’000
Revenue	3	217,134	2 0 7, 0 2 1
Cost of sales		(53 ,8 8 0)	(61, 24 3)
Gross profit		16 3 , 2 5 4	1 45 , 778
Administrative expenses	4	(9 6,9 36)	(8 7, 8 3 9)
Decrease/(increase) in loss allowance on trade receivables	17	10 8	(1, 22 7)
Operating profit		66,42 6	5 6 ,712
Finance income	7	8,4 86	5 ,111
Finance costs	7	(2 9 1)	(3 9 3)
Share of profit of associate	12	(8)	16 6
Profit before taxation		74 ,6 1 3	61,5 9 6
Income tax expense	8	(19 ,7 7 2)	(14 ,74 5)
Profit after taxation		54,841	4 6 , 8 51
Profit for the period attributable to owners of the parent company		54,841	4 6 , 8 51
		Pence	Pence
Basic earnings per ordinary share	28	2 2.7 8	19. 5 5
Diluted earnings per ordinary share	28	21. 9 5	18 . 8 5

The consolidated statement of profit or loss has been prepared on the basis that all operations are continuing operations.

There are no items to be recognised in other comprehensive income, and hence the Group has not presented a statement of other

comprehensive income.

Annual Report and Accounts 2024

25 147

FINANCIAL STATEMENTS

Consolidated statement of financial position

As at 28 February 2025

		As at	As at
		28 February	29 February
		2025	2024
	Note	£’000	£’000
Assets
Non-current assets
Property, plant and equipment	9	13 , 5 81	8,478
Right-of-use assets	10	1,6 41	1 , 4 11
Intangible assets	11	43 ,475	4 0,6 4 6
Investment in associate	12	3 ,18 5	3,193
Contract assets	13	1,7 7 3	2,68 9
Deferred tax asset	8	59	834
Total non-current assets		6 3, 7 14	57 ,25 1
Current assets
Inventories	15	14	60
Contract assets	13	9,9 73	11,756
Trade and other receivables	17	268, 454	2 2 1, 815
Cash and cash equivalents	18	11 3 ,0 7 6	88, 836
Total current assets		3 91, 5 17	322 ,467
Total assets		455,23 1	3 7 9 ,718
Liabilities
Non-current liabilities
Lease liabilities	10	(1, 26 9)	(1, 314)
Contract liabilities	14	(2, 034)	(2 ,1 3 7)
Total non-current liabilities		(3,3 0 3)	(3 ,4 51)
Current liabilities
Trade and other payables	19	(327 ,533)	(2 7 7, 9 17 )
Contract liabilities	14	(25 ,2 4 5)	(1 9, 348)
Current tax liabilities		(4 3 9)	(2 4 3)
Lease liabilities	10	(6 6 8)	(4 23)
Total current liabilities		(35 3, 8 8 5)	(2 9 7, 9 31)
Total liabilities		(357,188)	(3 01, 3 8 2)
Net assets		9 8,0 4 3	78,336
Equity
Share capital	20	2 , 411	2 , 404
Share premium	20	636,4 3 2	63 3,6 50
Share-based payment reserve		14,879	1 1 , 050
Merger reserve	21	(6 4 4,375)	(6 4 4, 3 75)
Retained earnings		8 8,6 9 6	75,6 07
Total equity		9 8,0 4 3	78,336

The consolidated financial statements on pages 147 to 185 were authorised for issue by the Board of directors on 12 May 2025 and

were signed on its behalf by:

Sam Mudd Andrew Holden

Chief Executive Officer Chief Financial Officer

148 Bytes Technology Group plc

FINANCIAL STATEMENTS

Consolidated statement of changes in equity

For the year ended 28 February 2025

					Attributable to owners of the company
				Share-based
		Share	Share	payment	Merger	Retained	Total
		capital	premium	reserve	reserve	earnings	equity
	Note	£’000	£’000	£’000	£’000	£’000	£’000
Balance at 1 March 2023		2,39 5	633,636	7,235	(6 4 4, 37 5)	62,6 0 6	6 1, 4 9 7
Total comprehensive income for the year		–	–	–	–	4 6, 851	4 6 ,8 51
Dividends paid	24(b)	–	–	–	–	(3 6 ,6 41)	(3 6 ,6 41)
Shares issued during the year	20	9	14	–	–	–	23
Transfer to retained earnings	27	–	–	(2 ,7 91)	–	2 ,7 91	–
Share-based payment transactions	27	–	–	5 ,7 0 8	–	–	5 ,7 0 8
Tax adjustments	8	–	–	898	–	–	898
Balance at 29 February 2024		2 ,404	63 3,6 50	1 1 , 050	(6 4 4, 37 5)	75,6 07	78 ,336
Total comprehensive income for the year		–	–	–	–	5 4 , 8 41	5 4 ,8 41
Dividends paid	24(b)	–	–	–	–	(4 2 , 8 4 3)	(4 2 , 8 4 3)
Shares issued during the year	20	7	2 ,7 8 2	–	–	–	2 ,7 8 9
Transfer to retained earnings	27	–	–	(1, 0 91)	–	1, 0 91	–
Share-based payment transactions	27	–	–	5,0 4 9	–	–	5,0 49
Tax adjustments	8	–	–	(12 9)	–	–	(1 2 9)
Balance at 28 February 2025		2 , 411	6 36,4 32	14 , 87 9	(64 4, 3 75)	88,6 9 6	9 8,0 4 3

Annual Report and Accounts 2024

25 149

FINANCIAL STATEMENTS

Consolidated statement of cash flows

For the year ended 28 February 2025

		Year ended	Year ended
		28 February	29 February
		2025	2024
	Note	£’000	£’000
Cash flows from operating activities
Cash generated from operations	22	85, 635	67 , 333
Interest received	7	8,4 86	5 ,111
Interest paid	7	(2 24)	(330)
Income taxes paid		(18,930)	(15,109)
Net cash inflow from operating activities		74 , 9 6 7	5 7, 0 0 5
Cash flows from investing activities
Payments for property, plant and equipment	9	(6,3 5 8)	(1, 3 3 4)
Payments for intangible asset	11	(3 ,7 0 9)	–
Investment in associate		–	(3 , 0 2 7)
Net cash outflow from investing activities		(10, 0 67)	(4 , 36 1)
Cash flows from financing activities
Proceeds from issues of shares		2 ,7 8 9	23
Principal elements of lease payments	10	(6 0 6)	(2 0 9)
Dividends paid to shareholders	24(b)	(42,843)	(3 6, 6 41)
Net cash outflow from financing activities		(4 0 ,6 6 0)	(3 6 ,8 2 7)
Net increase in cash and cash equivalents		24,240	15 , 817
Cash and cash equivalents at the beginning of the financial year		88,836	7 3, 019
Cash and cash equivalents at end of year	18	113 , 0 7 6	88,836

150

Bytes Technology Group plc

FINANCIAL STATEMENTS

Notes to the consolidated financial statements

For the year ended 28 February 2025

1 Accounting policies

1.1 General information

Bytes Technology Group plc, together with its subsidiaries

(‘the Group’ or ‘the Bytes business’) is one of the UK’s

leading providers of IT software offerings and solutions,

with a focus on cloud and security products. The Group

enables effective and cost-efficient technology sourcing,

adoption and management across software services,

including in the areas of security and cloud. The Group

aims to deliver the latest technology to a diverse and

embedded non-consumer customer base and has a long

track record of delivering strong financial performance.

The Group has a primary listing on the Main Market of the

London Stock Exchange (LSE) and a secondary listing on

the Johannesburg Stock Exchange (JSE).

1.2 Basis of preparation

The Group’s consolidated financial statements have been

prepared in accordance with UK-adopted International

Accounting Standards (IAS) in conformity with the

requirements of the Companies Act 2006.

The Group’s material accounting policies and

presentation considerations on both the current and

comparative periods are detailed below.

In adopting the going concern basis for preparing the

financial statements, the directors have considered the

business activities and the Group’s principal risks and

uncertainties in the context of the current operating

environment. This includes the current geopolitical

environment, the current challenging economic

conditions, and reviews of future liquidity headroom

against the Group’s revolving credit facilities, during the

period under assessment. The approach and conclusion

are set out fully in note 1.3.

The consolidated financial statements comprise the

financial statements of the Company and its subsidiaries,

see notes 1.6.1 and 1.6.2, and have been prepared on a

historical cost basis, as modified to include derivative

financial assets and liabilities at fair value through the

consolidated statement of profit or loss.

1.3 Going concern

The going concern of the Group is dependent on

maintaining adequate levels of resources to continue to

operate for the foreseeable future. The directors have

considered the principal risks, which are set out in the

Group’s strategic report, in addition to ever-present risks

such as the Group’s exposure to credit risk as described in

note 17, and liquidity risk, currency risk and foreign

exchange risk as described in note 23.

When assessing the going concern of the Group, the

directors have reviewed the year-to-date financial results,

as well as detailed financial forecasts for the going

concern assessment period up to 31 August 2026, being

15 months after the authorisation of these financial

statements.

The assumptions used in the financial forecasts are based

on the Group’s historical performance and management’s

extensive experience of the industry. Taking into

consideration the Group’s principal risks, the impact of the

current economic conditions and geopolitical

environment, and future expectations, the forecasts have

been stress-tested through a number of downside

scenarios to ensure that a robust assessment of the

Group’s working capital and cash requirements has been

performed.

Operational performance and operating model

Following the previous years of strong growth since it

listed in December 2020, the Group has again achieved

double-digit growth in gross invoiced income (GII), gross

profit (GP) and operating profit, and finished the year with

£113.1 million of cash compared to the prior year

£88.8 million.

During the year, customers have continued to move their

software products and data off-site and into the cloud,

requiring the Group’s advice and ongoing support around

this, as well as needing flexibility and added security, with

hybrid working continuing to be significant for many

customers.

We are also seeing growing requirements for artificial

intelligence (AI) functionality within IT applications and a

demand for guidance and support from our customers.

While we also recognise this as an emerging risk, due to

the potential of this technology to change the IT and

working landscape and the associated risks from security,

moral, legal and ethical standpoints, we primarily consider

AI and machine learning an opportunity for our business,

as we expand sales into areas such as Microsoft’s Copilot

and support our customers to capitalise on this emerging

technology.

Annual Report and Accounts 2024

25 151

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

1.3 Going concern continued

Resilience continues to be built into the Group’s operating

model from its wide customer base, high levels of repeat

business, strong vendor relationships and incentive

funding, increased demand driven by heightened IT

security risks, and the back-to-back nature of most of its

sales. This is explained further below.

• • Wide ranging customer base – The Group’s income

includes a large volume of non-discretionary spend

from UK corporates because IT is vital to run their

day-to-day operations and to establish competitive

advantage in an increasingly digital age. Public sector

organisations have similarly sought efficiencies,

resilience, and security within their IT infrastructures.

This is evident from the 15.2% increase in GII during

the year, and our mix of private and public customers

across multiple sectors means that a downturn in one

area can be compensated by upturns in others.

Sales risk is further mitigated by the fact that none of

the Group’s wide range of customers contributes

more than 1.3% of GP. Indeed, during the year only six

customers generated GP in excess of £1 million out of

a total Group GP of £163.2 million, the largest

£2.1 million and the six combined at £8.3 million (5.1%

of total GP). While we have some significant

contributions to our GII by individual customers, most

notably the NHS, these are primarily long-term

(three-year) contracts within the public sector, which

makes our income even more secure and provides

the opportunity to develop and monetise those

accounts further. Even then, the largest customer has

provided only 9.1% of our total GII of £2.1 billion

during the year.

• • High levels of repeat business – Due to the nature of

licensing schemes and service contracts, a high

proportion of business is repeatable in nature, with

subscriptions needing to be renewed for the customer

to continue to enjoy the benefit of the product or

service. Indeed, excluding sales of hardware and

services, the remaining dominant balance of our GII

– some £2.0 billion (95%) of software – falls into this

bracket. The largest software contracts, Microsoft

enterprise agreements (EAs), run for three years and

it is rare to lose a contract mid-term, which mitigates

the risk of income reducing rapidly. The Group has a

high success rate in securing renewals of existing EA

agreements and winning new ones.

Increasingly, customers transact their cloud software

requirements under usage-based cloud solution

provider (CSP) contracts, which provide flexibility but

also make the running of many of their key business

functions dependent on maintaining these

agreements and reliant on the Group’s support to

manage them.

The high level of customer retention and growth is

illustrated by the renewal rate for the year of 109%,

a measure of the rate of growth in GP from existing

customers, who also contributed 97% of total GP

in the year. The Group will continue to focus on

increasing its customer base and spend per

customer during the going concern period.

• • Microsoft relationship strength – With around 68% of

the Group’s GII and around 50% of GP generated

from sales of Microsoft products and associated

service solutions, this continues to be a very

important partnership for both sides. These

contributions from Microsoft remain in line with

previous years in percentage terms; in absolute

terms, as our largest vendor, we have now seen their

contribution to GII and GP exceed £1.4 billion and

£80 million respectively.

As with the customer side, the licensing of a large

proportion of EA software over three-year terms

reduces the risk of income falling away quickly. Also,

with the notable move towards more agile ‘pay-as-

you-go’ CSP contracts around cloud-based

applications, this makes those agreements even more

‘sticky’, by increasing the dependency of the

customer on the cloud infrastructure and products

which Microsoft provides.

Further, the Microsoft partnership has created the

opportunity for the Group to develop a host of skill

sets, so it is best placed to advise and support the

customers in whatever direction they choose to fulfil

their licensing requirements from a programmatic,

purchasing and consumption perspective. To this

end, the Group has attained high levels of Microsoft

expert status, specialisations and solution

partner designations in numerous Microsoft

technology areas.

The Board and operating company directors are

engaged directly with Microsoft executives on a

regular basis in developing the partnership further

and Microsoft business is currently growing at

double-digit rates.

In two areas in particular we are seeing high levels of

interest leading to increased demand. The first is for

security products and functionality to protect

customer IT systems. This has arisen from the

increased risk of cyber threats and attacks and has

generated additional requirements for the Group’s

support in this area.

The second has arisen from Microsoft’s launch of its AI

product, Copilot. The Group has been highly engaged

this year in educating customers and supporting them

in improving their productivity using Copilot within their

Microsoft 365 applications, and we have developed

associated services to support customer readiness

and adoption. We will continue to carefully expand our

internal skills in line with this increasing AI momentum

in the next year and beyond and to complement the

existing Microsoft solutions we sell.

While vendor concentration, and over-reliance on any

one supplier, is identified as one of our principal risks,

the very close daily workings between the two sides,

the mutually beneficial growth in business, and the

increase in accreditations and awards, makes the

Group a key partner to Microsoft, as they are to us.

We therefore believe the risk of cessation of the

Microsoft relationship to be remote.

152 Bytes Technology Group plc

FINANCIAL STATEMENTS

• • Microsoft incentives – Microsoft rewards partners

with a range of incentives comprising transactional

rebates and fees for license sales plus additional

levels of funding for partners who have attained

their technical specialisations through a range of

programmes aligned to customer engagement in

areas such as cloud migrations, and technology

onboarding, adoption and consumption. This latter

funding corresponds strongly to the Group’s strategic

focus on services and solutions expansion, so is a

growing income stream which supplements the

traditional transactional schemes.

Hence while recent Microsoft EA incentive changes

will see certain transactional rebates and fees

reduced, the Group has the opportunity to offset this

through the growth of other services linked

incentives. Further, any negative impact on EA

profitability will diminish as we move through the

going concern period as new and renewing contracts

are re-priced to reflect the new level of EA incentives

available, which affects all Microsoft partners

similarly, and hence we will compete for future

business on a level playing field. The Group is

therefore well positioned to manage such changes,

backed by our long track record of successfully

adapting to shifts in Microsoft, and other vendor,

programmes generally. We therefore believe our

stress tests, detailed below, consider downsides

around reducing gross profit that are sufficiently

severe to cater for any adverse impacts from these

incentive changes, should they arise.

• • Back-to-back sales model – The Group’s business is

substantially derived from the sale of software that it

transacts on a ‘back-to-back’ basis, meaning all

orders placed with vendors follow the receipt of a

customer order, and the intangible nature of software

products means that the Group is not exposed to

inventory risk. Hardware sales are also made on a

back-to-back basis, and delivered direct from

suppliers to customers, so the Group is not required

to invest in, or hold, stock.

As a result of these factors described above, the directors

believe that the Group operates in a resilient industry,

which will enable it to continue its profitable growth

trajectory – but it remains very aware of the risks that exist

in the wider economy.

Over the past year we have seen continued risks arising

from macroeconomic and geopolitical factors which align

to those identified in our principal risks statement, notably

economic disruption, inflation, and attraction and

retention of staff. The Board monitors these

macroeconomic and geopolitical risks on an ongoing

basis. These risks are considered further below.

Macroeconomic risks

• • Cost of sales inflation and competition leading to

margin pressure – While pricing from our suppliers

may be at risk of increasing, as they too face the same

macroeconomic pressures as ourselves, our

commercial model is based on passing on supplier

price increases to our customers. We also see

pressure from our customers, notably in the public

sector space where new business must often be won

under highly competitive tendering processes. So,

while there has been a small reduction in our GP/GII

margin from 8.0% last year to 7.8% this year, it has

been substantially contained and remains one of the

biggest focus areas in our business.

• • Wage inflation – The business has been facing

pressure from wage inflation over the past two to

three years. Where strategically required, we have

increased salaries to retain key staff in the light of

approaches from competitors, especially where staff

have specialist or technical skills. We monitor our staff

attrition rate and have maintained a level around 14%,

which is down on last year’s 16%. We do not believe

there has been any significant outflow of staff due to

being uncompetitive with salaries. We have a strong,

collaborative and supportive culture and offer our

staff employment in a business that is robust and they

are proud of. This is a key part of our attraction and

retention strategy.

In addition, when we look at our key operational

efficiency ratio of operating profit/GP, we have

achieved just over 40% which is in line with last year,

demonstrating the control over rising staff costs in

response to the growth of the business. While we

have already aligned staff salaries to market rates,

further expected rises have been factored into the

financial forecasts in line with those awarded in the

past year.

• • Interest rates – While interest rates have been high in

the past two years, they have now appeared to

stabilise and started to fall. The Group has no debt

exposure, nor has it ever needed to call on its

revolving credit facility (RCF). Due to the timing

difference we see in our cash flow model between

customer receipts and supplier payments, we place

cash on the money markets through our monthly cash

cycle. While interest rates may fall further in the

coming months we still see substantial interest

income opportunity over the going concern period.

We take have taken advantage of the recent higher

interest rates to generate a significant £8.5 million of

interest income in the reporting period and with

projected growth in profits and cash we should be

able to offset rate reductions.

• • Economic conditions impacting on customer

spending – While customers may consider reducing

spending on IT goods and services, if they are seen

as non-essential, we have seen increased spending

by our customers, because IT may be a means to

efficiencies and savings elsewhere. As our customers

undergo IT transformation, trending to the cloud,

automation and managed service, and with growing

cybersecurity concerns also heightening the

requirements for IT security, we are seeing no let-up

in demand, as illustrated by our reported trading

performance. This is supported by our robust

operating model, with business spread over many

customers in repeat subscription programmes and

service contracts, and high renewal rates.

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FINANCIAL STATEMENTS

1.3 Going concern continued

• • Economic conditions impacting on customer

payments – Across the year we have seen our

average debtor days of 38 remaining close to that in

the previous two years of 37 and 39 respectively and

with our closing debtor days standing at just 32. There

is limited evidence that customers ultimately do not

pay and we have only suffered £0.7 million of bad debt

during the year against GII of £2.1 billion (see note

17). We were carrying sufficient loss allowance to

cover this.

As in previous years, the majority of our GII (65%),

came from the public sector, traditionally with low

credit risk, while our corporate customer base

includes a wide range of blue-chip organisations and

with no material reliance on any single customer.

• • Tariffs impacting the Group directly or indirectly –

Recently we have seen the introduction of import

tariffs by certain countries which will increase the cost

of imported goods within the global supply chain. As

we are neither a significant exporter nor importer of

goods, we do not expect this will have a direct

material impact on the profitability of the business

within the going concern period. This is a fast moving

matter which we will therefore continue to monitor

closely for further changes, and in particular for any

indirect impact on our customers’ spending and

payments, as noted above.

Geopolitical risks

The current geopolitical environment, including the

ongoing conflicts in Ukraine and the Middle East, has

created potential supply problems, product shortages and

general price rises, particularly in relation to fuel, gas

and electricity.

• • In terms of supply chain, we are not significantly or

materially dependent on the movement of goods, so

physical trade obstacles are not likely to affect us

directly, with hardware making up less than 2% of our

GII during the year. Nevertheless, we have ensured

that we have a number of suppliers with substitute, or

alternative, technologies that we can rely on if one

supplier cannot meet our requirements or timescales.

This indicates that we have managed the supply

chain well.

• • Software sales though continue to be the dominant

element of our overall GII and hence are not inherently

affected by cross-border issues.

Climate change risks

The Group does not believe that the effects of climate

change will have a material impact on its operations and

performance over the going concern assessment period.

Climate risks are considered fully in the Task Force on

Climate-related Financial Disclosures (TCFD) included in

the Annual Report.

Liquidity and financing position

At 28 February 2025, the Group held instantly accessible

cash and cash equivalents of £113.1 million.

The consolidated balance sheet shows net current assets

of £38.2 million at year end; this amount is after the Group

paid final and special dividends for the prior year totalling

£35.4 million and an interim dividend for the current year

of £7.5 million. Post year end the Group has remained

cash positive and this is expected to remain the case with

continued profitable operations in the future and customer

receipts collected ahead of making the associated

supplier payments.

The Group has access to a committed RCF of £30 million

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. The

new facility includes an optional one-year extension to

17 May 2027 and a non-committed £20 million accordion

to increase the availability of funding should it be required

for future activity. To date, the Group has not been

required to use either its previous or new facilities, and we

do not forecast use of the new facility over the going

concern assessment period.

Approach to cash flow forecasts and downside testing

The going concern analysis reflects the actual trading

experience through the financial year to date, Board-

approved budgets to 28 February 2026 and detailed

financial forecasts for the period up to 31 August 2026,

being the going concern assessment period. The Group

has taken a measured approach to its forecasting and has

balanced the expected trading conditions with available

opportunities.

In its assessment of going concern, the Board has

considered the potential impact of the current economic

conditions and geopolitical environment as described

above. If any of these factors leads to a reduction in

spending by the Group’s customers, there may be an

adverse effect on the Group’s future GII, GP, operating

profit, and debtor collection periods. Under such

downsides, the Board has factored in the extent to which

they might be offset by reductions in headcount,

recruitment freezes and savings in pay costs (including

commissions and bonuses). As part of the stressed

scenario, where only partial mitigation of downsides is

possible, the Board confirmed that the RCF would not

need to be used during the going concern period up to

31 August 2026.

Details of downside testing

The Group assessed the going concern by comparing a

base case scenario to two downside scenarios and in

each of the downside cases taking into consideration two

levels of mitigation, ‘full’ and ‘partial’. These scenarios are

set out below.

• • Base case was forecast using the Board-approved

budget for the year ending 28 February 2026 and

extended across the first six months of the following

year to 31 August 2026.

• • Downside case 1, Severe but plausible, modelled

gross invoiced income reducing by 10% year on year,

gross profit reducing by 15% year on year and debtor

collection periods extending by five days, in each

case effective from June 2025.

Notes to the consolidated financial statements continued

154 Bytes Technology Group plc

FINANCIAL STATEMENTS

• • Downside case 2, Stressed, modelled both gross

invoiced income and gross profit reducing by 30%

year on year and debtor collection periods extending

by ten days, again in each case effective from

June 2025.

• • Partial mitigation measures modelled immediate

“self-mitigating” reduction of commission in line with

falling gross profit, freezing recruitment of new heads

and not replacing natural leavers from September

2025, freezing future pay from March 2026 (as current

year rises are already committed) and freezing rises in

general overheads from March 2026.

• • Full mitigation measures modelled additional

headcount reductions from March 2026, in line with

falling gross profit.

The pay and headcount mitigations applied in the

downside scenarios are within the Group’s control and,

depending on how severe the impacts of the modelled

downside scenarios are, the Group could activate further

levels of mitigation. For example:

• • those relating to headcount freezes or reductions

could be implemented even more quickly than

indicated above to respond to downward trends as,

considering the sudden and significant falls in

profitability and cash collections modelled under both

downsides, we would not wait for a full three months

before taking any action.

• • we would also be able to take more action to lower our

operating cost base, given the flexibility of our

business model.

• • a natural reduction in the level of shareholder

dividends would follow, in line with the modelled

reductions in profit after tax.

Therefore, the Board believes that all mitigations have

been applied prudently and are within the Group’s control.

Under all scenarios assessed, the Group would remain

cash positive throughout the whole of the going concern

period and therefore with no requirement to call upon the

revolving credit facility and remaining compliant with the

facility covenants. Dividends are forecast to continue to

be paid in line with the Group’s dividend policy to

distribute 40–50% of the post-tax pre-exceptional

earnings to shareholders.

The directors consider that the level of stress-testing is

appropriate to reflect the potential collective impact of all

the macroeconomic and geopolitical matters described

and considered above.

Going concern conclusion

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, being the going concern assessment

period. Accordingly, the directors conclude it to be

appropriate that the consolidated financial statements be

prepared on a going concern basis.

1.4 Critical accounting estimates and judgements

The preparation of the consolidated financial statements

requires the use of accounting estimates which, by

definition, will seldom equal the actual results.

Management also needs to exercise judgement in

applying the Group’s accounting policies. Estimates and

judgements are continually evaluated and are based on

historical experience and other factors, including

expectations of future events that are believed to be

reasonable under the circumstances.

This note provides an overview of the areas that involved

estimates or judgements and whether any are considered

critical due to their complexity or risk impact.

(i) Critical estimates and judgements

There are no critical areas of judgement. There are no

critical areas of estimation uncertainty that may have a

significant risk of resulting in a material adjustment to the

carrying amounts of assets and liabilities in the next

financial year.

(ii) Other estimates and judgements

Areas involving non-critical accounting estimates and

judgements are:

• • Principal versus agent (see note 1.10).

When recognising revenue, the Group is required to

assess whether its role in satisfying its various

performance obligations is to provide the goods or

services themselves (in which case it is considered to

be acting as principal) or arrange for a third party to

provide the goods or services (in which case it is

considered to be acting as agent). Where it is

considered to be acting as principal, the Group

recognises revenue at the gross amount of

consideration to which it expects to be entitled.

Where it is considered to be acting as agent, the

Group recognises revenue at the amount of any fee or

commission to which it expects to be entitled or the

net amount of consideration that it retains after paying

the other party.

To determine the nature of its obligation, the standard

primarily requires that an entity shall:

(a) Identify the specified goods or services to be

provided to the customer

(b) Assess whether it controls each specified good or

service before that good or service is transferred

to the customer by considering if it:

a. is primarily responsible for fulfilling the promise

to provide the specified good or service

b. has inventory risk before the specified good or

service has been transferred to a customer

c. has discretion in establishing the price for the

specified good or service.

The specific judgements made for each revenue

category are discussed in the accounting policy for

revenue as disclosed in note 1.10.

The Group considers the determination of principal

versus agent to be well established within the

business processes. Therefore management has

concluded that the level of judgement is no longer

considered to be significant.

Annual Report and Accounts 2024

25 155

FINANCIAL STATEMENTS

1.4 Critical accounting estimates and judgements

continued

• • Estimation of recoverable amount of goodwill (see

notes 1.15 and 11).

The Group tests annually whether goodwill has suffered

any impairment, in accordance with the accounting

policy stated in note 1.15. The recoverable amounts of

the relevant cash generating units (CGUs) have been

determined based on value-in-use calculations in

respect of future forecasts which require the use of

assumptions. The growth rates used in the short-term

forecasts are based on historical growth rates achieved

by the Group and longer-term cash flow forecasts

(beyond a five-year period) are extrapolated using the

estimated growth rates disclosed in note 11. The

forecast cash flows are discounted, at the rates

disclosed in note 11, to determine the CGUs value in

use. The sensitivity of changes in the estimated growth

rates and the discount rate are disclosed in note 11.

• • Provisions (see note 1.24).

IAS 37 Provisions, Contingent Liabilities and

Contingent Assets requires a provision to be

recognised when an entity has a present obligation

(legal or constructive) because of a past event, it is

probable that an outflow of resources embodying

economic benefits will be required to settle the

obligation, and a reliable estimate can be made of the

obligation. If any of the conditions for recognition are

not met, no provision is recognised, and an entity may

instead have a contingent liability. Contingent liabilities

are not recognised, but explanatory disclosures are

required, unless the possibility of an outflow in

settlement is remote. The Group makes provision for

future tax liabilities and assets in relation to its

unexercised share options. This requires judgement to

be made in respect of the Group share price at the time

of exercise which crystalises the future liability or asset.

• • Property, plant and equipment (see note 1.20).

The Group classifies owner occupied properties as

property, plan and equipment. Where tenancies were

assumed upon acquisition of the properties and rental

income are earned, this requires judgement as to

whether the properties are property, plant and

equipment or investment property taking into account

the evaluation of terms and conditions of the

arrangement and intention of future use.

• • Estimation of recoverable amount of investment in

associate (see note 12).

The Group tests annually whether its investment in

associate has suffered any impairment, in accordance

with the accounting policy stated in note 1.15 Impairment

of non-financial assets. The recoverable amount of the

Group’s investment has been estimated based on

value-in-use calculations in respect of future forecasts

which require the use of assumptions. The growth rates

used in the short-term forecasts are based on historical

growth rates achieved and longer-term cash flow

forecasts (beyond a five-year period) are extrapolated

using the estimated growth rates disclosed in note 12. The

forecast cash flows are discounted, at the rates disclosed

in note 12, to determine the value-in-use. The sensitivity

of changes in these rates are disclosed in note 12.

1.5 New standards, interpretations and amendments

adopted by the Group

(a) New and amended standards adopted by the Group

The Group has applied the following standard or

amendments for the first time in the annual reporting

period commencing 1 March 2024:

• • Classification of liabilities as current or non-current –

Amendments to IAS 1

• • Non-current liabilities with covenants – Amendments

to IAS 1

• • Lease liability in a sale and leaseback – Amendments

to IFRS 16

• • Supplier finance arrangements – Amendments to IAS

7 and IFRS 7

The amendments listed above did not have any impact on

the amounts recognised in current or prior periods and

are not expected to affect future periods.

(b) New standards and interpretations not yet adopted

Certain new accounting standards and interpretations

have been published that are not mandatory for the

year ended 28 February 2025 and have not been adopted

early by the Group. These standards are not expected to

have a material impact on the Group in the current or

future reporting periods.

փ Lack of exchangeability – Amendments to IAS 21

փ Classification and measurement of financial

instruments – Amendments to IFRS 7 and IFRS 9

The Group is assessing the impact of IFRS 18 Presentation

and disclosure in financial statements which, if adopted by

the UK Endorsement Board, will be effective for reporting

periods beginning on or after 1 January 2027.

1.6 Principles of consolidation

1.6.1 Subsidiaries

Subsidiaries are all entities over which the Group has

control. The Group controls an entity where the Group is

exposed to, or has rights to, variable returns from its

involvement with the entity and has the ability to affect

those returns through its power to direct the activities of

the entity. Subsidiaries are fully consolidated from the

date on which control is transferred to the Group. They are

deconsolidated from the date that control ceases.

Inter-company transactions, balances and unrealised

gains on transactions between Group companies are

eliminated. Unrealised losses are also eliminated unless

the transaction provides evidence of an impairment of the

transferred asset. Accounting policies of subsidiaries

have been changed where necessary to ensure

consistency with the policies adopted by the Group.

Notes to the consolidated financial statements continued

156 Bytes Technology Group plc

FINANCIAL STATEMENTS

1.6.2 Associate

An associate is an entity over which the Group has

significant influence. Significant influence is the power to

participate in the financial and operating policy decisions

of the investee but is not control or joint control over those

policies. The Group’s investment in its associate is

accounted for using the equity method.

Under the equity method, the investment in an associate is

initially recognised at cost. The carrying amount of the

investment is adjusted to recognise changes in the

Group’s share of net assets of the associate since the

acquisition date. The statement of profit or loss reflects

the Group’s share of profit of the associate. Where there is

objective evidence that the investment in associate is

impaired, the amount of the impairment is recognised

within ‘Share of profit of associate’ in the statement of

profit or loss.

1.7 Segment reporting

Operating segments are reported in a manner consistent

with the internal reporting provided to the chief operating

decision maker who views the Group’s operations on a

combined level, given they sell similar products and

services, and substantially purchase from the same

suppliers and under common customer frameworks.

The Group has therefore determined that it has only one

reportable segment under IFRS 8, which is that of ‘IT

solutions provider’.

1.8 Finance income and costs

Finance income comprises interest income on funds

invested. Interest income is recognised as it accrues in

profit or loss, using the effective interest method.

Finance costs comprises interest expense on borrowings

and the unwinding of the discount on lease liabilities, that

are recognised in profit or loss as it accrues using the

effective interest method.

1.9 Foreign currency translation

(i) Functional and presentation currency

Items included in the consolidated financial statements of

each of the Group’s entities are measured using the

currency of the primary economic environment in which

the entity operates (‘the functional currency’).

(ii) Transactions and balances

Foreign currency transactions are translated into the

functional currency using the exchange rates at the dates

of the transactions. Foreign exchange gains and losses

resulting from the settlement of such transactions, and

from the translation of monetary assets and liabilities

denominated in foreign currencies at year-end exchange

rates, are generally recognised in profit or loss. They are

deferred in equity if they relate to qualifying cash flow

hedges and qualifying net investment hedges or are

attributable to part of the net investment in a foreign

operation.

All foreign exchange gains and losses are presented in the

statement of profit or loss on a net basis, within ‘other

gains/(losses)’.

1.10 Revenue recognition

Revenue recognition principles across all

revenue streams

The Group recognises revenue on completion of its

performance obligations at the fixed transaction prices

specified in the underlying contracts or orders. There are

no variable price elements arising from discounts, targets,

loyalty points or returns. Where the contract or order

includes more than one performance obligation, the

transaction price is allocated to each obligation based on

their stand-alone selling prices. These are separately

listed as individual items within the contract or order.

In the case of sales of third-party products and services,

the Group’s performance obligations are satisfied by

fulfilling its contractual requirements with both the

customer and the supplier (which may be direct with the

product vendor), ensuring that orders are processed

within any contractual timescales stipulated. In the case of

sales of the Group’s own in-house products and internal

services, this includes the Group fulfilling its contractual

responsibilities with the customer.

Software

The Group acts as an advisor, analysing customer

requirements and designing an appropriate mix of

software products under different licensing programmes.

This may include a combination of cloud and on-premise

products, typically used to enhance users’ productivity,

strengthen IT security or assist in collaboration. The way in

which the Group satisfies its performance obligations

depends on the licensing programme selected.

Direct software sales – the Group’s performance

obligation is to facilitate software sales between vendors

and customers, but the Group is not party to those sales

contracts. Supply and activation of the software licences,

invoicing and payment all take place directly between the

vendor and the customer. The transaction price for the

customer is set by the vendor with no involvement from the

Group. Therefore, the Group does not control the licences

prior to their delivery to the customer and hence acts as

agent. The Group is compensated by the vendor with a fee

based on fixed rates set by the vendor applied to the

customer transaction price and determined according to the

quantity and type of products sold. Revenue is recognised

as the fee received from the vendor on a point in time basis

when the vendor’s invoicing to the customer takes place.

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FINANCIAL STATEMENTS

1.10 Revenue recognition continued

Indirect software sales – the Group’s performance

obligation is to fulfil customers’ requirements through the

procurement of appropriate on-premise software

products, or cloud-based software, from relevant

vendors. Operating as a reseller, the Group invoices, and

receives payment from, the customer itself. Whilst the

transaction price is set by the Group at the amount

specified in its contract with the customer, the software

licensing agreement is between the vendor and the

customer. The vendor is responsible for issuing the

licences and activation keys, for the software’s

functionality, and for fulfilling the promise to provide the

licences to the customer. Therefore, the Group acts as

agent and revenue is recognised as the amount retained

after paying the software vendor. As a reseller, the Group

recognises indirect software sales revenue on a point-in-

time basis once it has satisfied its performance

obligations. This takes two main forms as follows:

In the case of cloud-based software sales, the Group

arranges for third-party vendors to provide customers

with access to software in the cloud. As the sales

value varies according to monthly usage, revenue is

recognised once the amount is confirmed by the

vendor and the Group has analysed the data and

advised the customer. This is because the

responsibilities of the Group to undertake such

activities mean that these performance obligations

are satisfied at each point usage occurs and the

Group has a right to receive payment.

In the case of licence sales (non cloud-based

software) arising from fixed-price subscriptions where

the customer makes an up-front payment, the Group

recognises revenue when the contract execution or

order is fulfilled by the Group because its

performance obligation is fully satisfied at that point.

Typically, these take the form of annual instalments

where the Group is required to undertake various

contract review activities at each anniversary date.

Hardware – resale of hardware products

The Group’s activities under this revenue stream comprise

the sale of hardware items such as servers, laptops and

devices. For hardware sales, the Group acts as principal,

as it assumes primary responsibility for fulfilling the

promise to provide the goods and for their acceptability, is

exposed to inventory risk during the delivery period and

has discretion in establishing the selling price.

Revenue is recognised at the gross amount receivable

from the customer for the hardware provided and on a

point-in-time basis when delivered and control has

passed to the customer.

Services internal – provision of services to customers

using the Group’s own internal resources

The Group’s activities under this revenue stream comprise

the provision of consulting services using its own internal

resources. The services provided include, but are not limited

to, helpdesk support, cloud migration, implementation of

security solutions, infrastructure, and software asset

management services. The services may be one-off

projects where completion is determined on delivery of

contractually agreed tasks, or they may constitute an

ongoing set of managed service or support contract

deliverables over a contract term which may be multi-year.

When selling internally provided services, the Group acts

as principal as there are no other parties involved in the

process. Revenue is recognised at the gross amount

receivable from the customer for the services provided.

The Group recognises revenue from internally provided

consulting services on an over-time basis, unless they are

short term one-off projects. This is because the customer

benefits from the Group’s activities as the Group performs

them. Where one-off projects are completed in less than a

month the revenue is recognised when the work has been

completed and the customer has confirmed all

performance conditions have been satisfied. For longer

service projects extending over more than one month the

Group applies an inputs basis by reference to the hours

expended to the measurement date, and the day rates

specified in the contract, subject to sign off of milestones

agreed with the customer. For managed services and

support contracts the revenue is recognised evenly over

the contract term.

Services external – provision of services to customers

using third-party contractors

The Group’s activities under this revenue stream comprise

the sale of a variety of IT services which are provided by

third-party contractors. These may be similar to the

internally provided consulting services, where the Group

does not have the internal capacity at the time required by

the customer or may be services around different IT

technologies and solutions where the Group does not

have the relevant skills in-house.

Whilst the transaction price is set by the Group at the

amount specified in its contract with the customer, when

selling externally provided services, the Group acts as

agent because responsibility for delivering the service

relies on the performance of the third-party contractor.

If the customer is not satisfied with their performance, the

third party will assume responsibility for making good the

service and obtaining customer sign-off. The Group will

not pay the third party until customer sign-off has been

received. Revenue is recognised at the amount retained

after paying the service provider for the services delivered

to the customer on a point-in-time basis. The Group does

not control the services prior to their delivery and its

performance obligations are satisfied at the point the

service has been delivered by the third party and

confirmed with the customer.

1.11 Contract costs, assets and liabilities

Contract costs

Incremental costs of obtaining a contract

The Group recognises the incremental costs of obtaining

a contract when those costs are incurred. For revenue

recognised on a point-in-time basis, this is consistent with

the transfer of the goods or services to which those costs

relate. For revenue recognised on an over-time basis, the

Group applies the practical expedient available in IFRS 15

and recognises the costs as an expense when incurred

because the amortisation period of the asset that would

otherwise be recognised is less than one year.

Notes to the consolidated financial statements continued

158 Bytes Technology Group plc

FINANCIAL STATEMENTS

Costs to fulfil a contract

The Group recognises the costs of fulfilling a contract

when those costs are incurred. This is because the nature

of those costs does not generate or enhance the Group’s

resources in a way that enables it to satisfy its

performance obligations in the future and those costs do

not otherwise qualify for recognition as an asset.

Contract assets

The Group recognises a contract asset for accrued

revenue. Accrued revenue is revenue recognised from

performance obligations satisfied in the period that has

not yet been invoiced to the customer.

Contract assets also include costs to fulfil services

contracts (deferred costs) when the Group is invoiced by

suppliers before the related performance obligations of

the contract are satisfied by the third party. Deferred costs

are measured at the purchase price of the associated

services received. Deferred costs are released from the

consolidated statement of financial position in line with the

recognition of revenue on the specific transaction.

Contract liabilities

The Group recognises a contract liability for deferred

revenue when the customer is invoiced before the related

performance obligations of the contract are satisfied. A

contract liability is also recognised for payments received

in advance from customers. Contract liabilities are

recognised as revenue when the Group performs its

obligations under the contract to which they relate.

1.12 Incentives from suppliers

As a value-added IT reseller, the Group can earn incentive

income from suppliers in addition to any profit made on

the underlying transactions.

Rebates from software and hardware sales

Where the Group invoices a customer directly, it may

receive additional rebates from suppliers. These are

accounted for in the period in which they are earned and

are based on commercial agreements with suppliers.

Rebates earned are mainly determined by the type and

quantity of products within each sale but may also be

volume-purchase related. They are generally short term in

nature, with rebates earned but not yet received typically

relating to the preceding month’s or quarter’s trading.

Rebate income is recognised in cost of sales in the

consolidated statement of profit or loss and rebates

earned but not yet received are included within trade and

other receivables in the consolidated statement of

financial position.

Fees from software sales

Where the Group sells on behalf of a vendor who invoices

the customer directly, the Group is paid a fee from the vendor

for our service in managing the customer relationship and

providing licensing advice and support to them. As noted

above in note 1.10 under Direct software sales, the fee is

recognised in revenue when the vendor’s invoicing to the

customer takes place. Fees recognised but not yet received

are included within trade and other receivables in the

consolidated statement of financial position.

Fees from service engagements

Where the Group provides internal services in relation to

certain vendor technologies, the activity may be funded by

the vendor themself rather than by the customer, for

example where the vendor is seeking to increase

awareness and/or uptake in certain technical solution

areas, refer to note 1.10 revenue recognition - services

internal.

1.13 Income tax

The income tax expense or credit for the period is the tax

payable on the current period’s taxable income, based on

the applicable income tax rate for each jurisdiction, adjusted

by changes in deferred tax assets and liabilities attributable

to temporary differences and to unused tax losses.

The current income tax charge is calculated based on the

tax laws enacted or substantively enacted at the end of the

reporting period in the countries where the company and

its subsidiaries operate and generate taxable income.

Management periodically evaluates positions taken in tax

returns with respect to situations in which applicable tax

regulation is subject to interpretation. It establishes

provisions, where appropriate, based on amounts

expected to be paid to the tax authorities.

Deferred income tax is provided for in full, using the

liability method, on temporary differences arising between

the tax bases of assets and liabilities and their carrying

amounts in the consolidated financial statements.

However, deferred tax liabilities are not recognised if they

arise from the initial recognition of goodwill. Deferred

income tax is also not accounted for if it arises from initial

recognition of an asset or liability in a transaction other

than a business combination that, at the time of the

transaction, affects neither accounting nor taxable profit

or loss. Deferred income tax is determined using tax rates

(and laws) that have been enacted or substantially enacted

by the end of the reporting period and are expected to

apply when the related deferred income tax asset is

realised, or the deferred income tax liability is settled.

Deferred tax assets are recognised only if it is probable

that future taxable amounts will be available to utilise

those temporary differences and losses.

Deferred tax liabilities and assets are not recognised for

temporary differences between the carrying amount and

tax bases of investments in foreign operations where the

Group is able to control the timing of the reversal of the

temporary differences and it is probable that the

differences will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset where there is

a legally enforceable right to offset current tax assets and

liabilities and where the deferred tax balances relate to the

same taxation authority. Current tax assets and tax liabilities

are offset where the entity has a legally enforceable right to

offset and intends either to settle on a net basis, or to realise

the asset and settle the liability simultaneously.

Current and deferred tax is recognised in profit or loss,

except to the extent that it relates to items recognised in

other comprehensive income or directly in equity. In this

case, the tax is also recognised in other comprehensive

income or directly in equity, respectively.

Annual Report and Accounts 2024

25 159

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

1.14 L ea ses

Group as a lessee

The Group leases a property and various motor vehicles.

Lease agreements are typically made for fixed periods but

may have extension options included. Lease terms are

negotiated on an individual basis and contain different

terms and conditions. The lease agreements do not

impose any covenants, but leased assets may not be used

as security for borrowing purposes.

Leases are recognised as a right-of-use asset and a

corresponding liability at the date at which the leased

asset is available for use by the Group. Each lease

payment is allocated between the liability and finance

cost. The finance cost is charged to profit or loss over the

lease period to produce a constant periodic rate of

interest on the remaining balance of the liability for each

period. The right-of-use asset is depreciated over the

shorter of the asset’s useful life and the lease term on a

straight-line basis. The Group is depreciating the right-of-

use assets over the lease term on a straight-line basis.

Assets and liabilities arising from a lease are initially

measured at the net present value of the minimum lease

payments. The net present value of the minimum lease

payments is calculated as follows:

• • Fixed payments, less any lease incentives receivable

• • Variable lease payments that are based on an index or

a rate

• • Amounts expected to be payable by the lessee under

residual value guarantees

• • The exercise price of a purchase option if the lessee is

reasonably certain to exercise that option

• • Payments of penalties for terminating the lease, if the

lease term reflects the lessee exercising that option.

The lease payments are discounted using the interest rate

implicit in the lease; where this rate cannot be determined,

the Group’s incremental borrowing rate is used.

Right-of-use assets are measured at cost comprising the

following:

• • The net present value of the minimum lease payments

• • Any lease payments made at, or before, the

commencement date less any lease incentives

received

• • Any initial direct costs.

Payments associated with short-term leases and leases of

low-value assets are recognised on a straight-line basis as

an expense in profit or loss. Short-term leases are leases

with a lease term of 12 months or less. Low-value assets

comprise IT equipment and small items of office furniture.

Depreciation

Depreciation is recognised in profit or loss for each

category of assets on a straight-line basis over the

lease term.

The estimated useful lives for the current and comparative

periods are as follows:

• • Buildings, 8 years

• • Motor vehicles, 2 to 3 years.

The depreciation methods, useful lives and residual values

are reassessed annually and adjusted if appropriate.

Gains and losses arising on the disposal of leased assets

are included as capital items in profit or loss.

Group as a lessor

Leases in which the Group does not transfer substantially

all the risks and rewards incidental to ownership of an

asset are classified as operating leases. Rental income

arising accounted for on a straight-line basis over the

lease term and is included in the statement of profit

or loss.

1.15 Impairment of non-financial assets

Goodwill and intangible assets that have an indefinite

useful life are not subject to amortisation and are tested

annually for impairment, or more frequently if events or

changes in circumstances indicate that they might be

impaired. Other assets are tested for impairment whenever

events or changes in circumstances indicate that the

carrying amount might not be recoverable. An impairment

loss is recognised for the amount by which the asset’s

carrying amount exceeds its recoverable amount. The

recoverable amount is the higher of an asset’s fair value

less costs of disposal and value in use. For the purposes

of assessing impairment, assets are grouped at the lowest

levels for which there are separately identifiable cash

inflows which are largely independent of the cash inflows

from other assets or groups of assets (cash generating

units). Non-financial assets other than goodwill that

suffered an impairment are reviewed for possible reversal

of the impairment at the end of each reporting period.

1.16 Cash and cash equivalents

Cash is represented by cash in hand and deposits with

financial institutions repayable without penalty on notice

of not more than 24 hours. Cash equivalents are highly

liquid investments that mature in no more than three

months from the date of acquisition and that are readily

convertible to known amounts of cash with insignificant

risk of change in value.

For purposes of the consolidated statement of cash flows,

cash and cash equivalents consist of cash and short-term

deposits as defined above.

1.17 Trade receivables

Trade receivables are amounts due from customers for

merchandise sold or services rendered in the ordinary

course of business. Trade receivables are recognised

initially at the amount of consideration that is

unconditional, i.e. fair value and subsequently measured

at amortised cost using the effective interest method, less

loss allowance. Prepayments and other receivables are

stated at their nominal values.

160 Bytes Technology Group plc

FINANCIAL STATEMENTS

1.18 Inventories

Inventories are measured at the lower of cost and net

realisable value considering market conditions and

technological changes. Cost is determined on the first-in

first-out and weighted average cost methods. Work and

contracts in progress and finished goods include direct

costs and an appropriate portion of attributable overhead

expenditure based on normal production capacity. Net

realisable value is the estimated selling price in the

ordinary course of business, less the estimated costs of

completion and selling expenses.

1.19 Financial instruments

Financial instruments comprise investments in equity,

loans receivable, trade and other receivables (excluding

prepayments), investments, cash and cash equivalents,

non-current loans, current loans, bank overdrafts,

derivatives and trade and other payables.

Recognition

Financial assets and liabilities are recognised in the

Group’s statement of financial position when the Group

becomes a party to the contractual provisions of the

instruments. Financial assets are recognised on the date

the Group commits to purchase the instruments (trade

date accounting).

Financial assets are classified as current if expected to be

realised or settled within 12 months from the reporting

date; if not, they are classified as non-current. Financial

liabilities are classified as non-current if the Group has an

unconditional right to defer payment for more than 12

months from the reporting date.

Classification

The Group classifies financial assets on initial recognition

as measured at amortised cost, fair value through other

comprehensive income (FVOCI), or fair value through

profit or loss (FVTPL) based on the Group’s business

model for managing the financial asset and the cash flow

characteristics of the financial asset.

Financial assets are classified as follows:

• • Financial assets to be measured subsequently at fair

value (either through other comprehensive income

(OCI) or through profit or loss)

• • Financial assets to be measured at amortised cost.

Financial assets are not reclassified unless the Group

changes its business model. In rare circumstances

where the Group does change its business model,

reclassifications are done prospectively from the date

that the Group changes its business model.

Financial liabilities are classified and measured at

amortised cost except for those derivative liabilities and

contingent considerations that are measured at FVTPL.

Measurement on initial recognition

All financial assets and financial liabilities are initially

measured at fair value, including transaction costs, except

for those classified as FVTPL which are initially measured

at fair value excluding transaction costs. Transaction costs

directly attributable to the acquisition of financial assets or

financial liabilities at FVTPL are recognised immediately in

profit or loss.

Subsequent measurement: financial assets

Subsequent to initial recognition, financial assets are

measured as described below:

• • FVTPL – these financial assets are subsequently

measured at fair value and changes therein (including

any interest or dividend income) are recognised in

profit or loss

• • Amortised cost – these financial assets are

subsequently measured at amortised cost using the

effective interest method, less impairment losses.

Interest income, foreign exchange gains and losses

and impairments are recognised in profit or loss. Any

gain or loss on derecognition is recognised in profit

or loss

• • Equity instruments at FVOCI – these financial assets

are subsequently measured at fair value. Dividends

are recognised in profit or loss when the right to

receive payment is established. Other net gains and

losses are recognised in OCI. On derecognition,

gains and losses accumulated in OCI are not

reclassified to profit or loss.

Subsequent measurement: financial liabilities

All financial liabilities, excluding derivative liabilities and

contingent consideration, are subsequently measured at

amortised cost using the effective interest method.

Derivative liabilities are subsequently measured at fair

value with changes therein recognised in profit or loss.

Derecognition

Financial assets are derecognised when the rights to

receive cash flows from the assets have expired or have

been transferred and the Group has transferred

substantially all risks and rewards of ownership. Financial

liabilities are derecognised when the obligations specified

in the contracts are discharged, cancelled or expire. On

derecognition of a financial asset or liability, any

difference between the carrying amount extinguished and

the consideration paid is recognised in profit or loss.

Offsetting financial instruments

Offsetting of financial assets and liabilities is applied when

there is a legally enforceable right to offset the recognised

amounts and there is an intention to settle on a net basis or

realise the asset and settle the liability simultaneously. The

net amount is reported in the statement of financial position.

Annual Report and Accounts 2024

25 161

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

1.19 Financial instruments continued

Impairment

The Group applies the IFRS 9 simplified approach to

measuring expected credit losses which uses a lifetime

expected loss allowance for all trade receivables.

To measure the expected credit losses, trade receivables

have been grouped based on credit risk characteristics

and the days past due.

The expected credit loss (ECL) rates are based on the

payment profiles of sales over a 12-month period before

28 February 2025, 29 February 2024, and 1 March 2023

respectively and the corresponding historical credit

losses experienced within this period. The historical loss

rates are reviewed and adjusted to reflect current and

forward-looking information on macroeconomic factors

affecting the ability of the customers to settle the

receivables.

Trade receivables are written off where there is no

reasonable expectation of recovery. Indicators that there

is no reasonable expectation of recovery include, among

others, the failure of a debtor to engage in a repayment

plan with the Group, and a failure to make contractual

payments for a period of greater than 120 days past due.

Impairment losses on trade receivables are presented as

net impairment losses within operating profit. Subsequent

recoveries of amounts previously written off are credited

against the same line item.

Derivatives

Derivatives are initially recognised at fair value on the date

that a derivative contract is entered into as either a

financial asset or financial liability if they are considered

material. Derivatives are subsequently remeasured to

their fair value at the end of each reporting period, with the

change in fair value being recognised in profit or loss.

1.20 Property, plant and equipment

Owned assets

Property, plant and equipment is measured at cost less

accumulated depreciation and impairment losses. When

components of an item of property, plant and equipment

have different useful lives, those components are

accounted for as separate items of property, plant and

equipment.

Property acquired and held for future use and

development as owner-occupied property is included in

owned property.

Cost includes expenditure that is directly attributable to

the acquisition of the asset. Purchased software that is

integral to the functionality of the related equipment is

capitalised as part of that equipment.

Subsequent costs

The Group recognises in the carrying amount of an item of

property, plant and equipment the cost of replacing part of

such an item when the cost is incurred, if it is probable that

future economic benefits embodied within the item will

flow to the Group and the cost of such item can be

measured reliably. The carrying amount of the replaced

item of property, plant and equipment is derecognised. All

other costs are recognised in profit or loss as an expense

when incurred.

Depreciation

Depreciation is recognised in profit or loss for each

category of assets on a straight-line basis over their

expected useful lives up to their respective estimated

residual values. Land is not depreciated.

The estimated useful lives for the current and comparative

periods are as follows:

• • Buildings, 20 to 50 years

• • Leasehold improvements (included in land and

buildings), shorter of lease period or useful life of

asset

• • Plant and machinery, 3 to 20 years

• • Motor vehicles, 4 to 8 years

• • Furniture and equipment, 5 to 20 years

• • IT equipment and software, 2 to 8 years

The depreciation methods, useful lives and residual values

are reassessed annually and adjusted if appropriate.

Gains and losses arising on the disposal of property, plant

and equipment are included in profit or loss.

1.21 Intangible assets

Goodwill

Goodwill is measured as described in note 1.15. Goodwill

on acquisitions of subsidiaries is included in intangible

assets. Goodwill is not amortised, but it is tested for

impairment annually, or more frequently if events or

changes in circumstances indicate that it might be

impaired and is carried at cost less accumulated

impairment losses. Gains and losses on the disposal of an

entity include the carrying amount of goodwill relating to

the entity sold.

Goodwill is allocated to cash generating units for the

purpose of impairment testing. The allocation is made to

those cash generating units or groups of cash generating

units that are expected to benefit from the business

combination in which the goodwill arose. The units or

groups of units are identified at the lowest level at which

goodwill is monitored for internal management purposes.

162 Bytes Technology Group plc

FINANCIAL STATEMENTS

Brands and customer relationships

Brands and customer relationships acquired in a business

combination are recognised at fair value at the acquisition

date. They have a finite useful life and are subsequently

carried at cost less accumulated amortisation and

impairment losses.

The useful lives for the brands and customer relationships

are as follows:

• • Customer relationships, 10 years

• • Brands, 5 years.

Software

Costs associated with maintaining software programs are

recognised as an expense as incurred. Development

costs that are directly attributable to the design and

testing of identifiable and unique software products

controlled by the Group are recognised as intangible

assets where the following criteria are met:

• • It is technically feasible to complete the software so

that it will be available for use

• • Management intends to complete the software and

use or sell it

• • There is an ability to use or sell the software

• • It can be demonstrated how the software will

generate probable future economic benefits

• • Adequate technical, financial and other resources to

complete the development and to use or sell the

software are available

• • The expenditure attributable to the software during its

development can be reliably measured.

The useful lives for software is 2 to 8 years.

Research and development

Research expenditure and development expenditure that

do not meet the criteria above are recognised as an

expense as incurred. Development costs previously

recognised as an expense are not recognised as an asset

in a subsequent period.

1.22 Trade and other payables

Trade payables, sundry creditors and accrued expenses

are obligations to pay for goods or services that have been

acquired in the ordinary course of business from

suppliers. They are accounted for in accordance with the

accounting policy for financial liabilities as included

above. Amounts received from customers in advance,

prior to confirming the goods or services required, are

recorded as other payables. Upon delivery of the goods

and services, these amounts are recognised in revenue.

Other payables are stated at their nominal values.

1.23 Borrowings

Borrowings are initially recognised at fair value, net of

transaction costs incurred. Borrowings are subsequently

measured at amortised cost. Any difference between the

proceeds (net of transaction costs) and the redemption

amount is recognised in profit or loss over the period of

the borrowings using the effective-interest method. Fees

paid on the establishment of loan facilities are recognised

as transaction costs of the loan to the extent that it is

probable that some or all of the facility will be drawn down.

In this case, the fee is deferred until the drawdown occurs.

To the extent that there is no evidence that it is probable

that some or all of the facility will be drawn down, the fee is

capitalised as a prepayment for liquidity services and

amortised over the period of the facility to which it relates.

1.24 Provisions

Provisions are recognised when the Group has a present

legal or constructive obligation because of past events, for

which it is probable that an outflow of economic benefits

will be required to settle the obligation, and where a reliable

estimate can be made of the amount of the obligation.

Provisions are determined by discounting the expected

future cash flows at a pre-tax discount rate that reflects

current market assessments of the time value of money

and, where appropriate, the risks specific to the liability.

1.25 Employee benefits

Short-term obligations

Liabilities for wages and salaries, including non-monetary

benefits, annual leave and accumulating sick leave, that

are expected to be settled wholly within 12 months after

the end of the period in which the employees render the

related service are recognised in respect of employees’

services up to the end of the reporting period and are

measured at the amounts expected to be paid when the

liabilities are settled. The liabilities are presented as

current employee benefit obligations in the balance sheet.

Post-employment obligations

The Group operates various defined contribution plans for

its employees. Once the contributions have been paid, the

Group has no further payment obligations. The

contributions are recognised as employee benefit

expense when they are due. Prepaid contributions are

recognised as an asset to the extent that a cash refund or

a reduction in the future payments is available.

Termination benefits

Termination benefits are payable when employment is

terminated by the Group before the normal retirement

date, or when an employee accepts voluntary redundancy

in exchange for these benefits. The Group recognises

termination benefits at the earlier of the following dates:

(a) when the Group can no longer withdraw the offer of

those benefits; and (b) when the Group recognises costs

for a restructuring that is within the scope of IAS 37 and

involves the payment of termination benefits. In the case

of an offer made to encourage voluntary redundancy, the

termination benefits are measured based on the number

of employees expected to accept the offer. Benefits falling

due more than 12 months after the end of the reporting

period are discounted to present value.

Share-based payments

Equity settled share-based payment incentive scheme

Share-based compensation benefits are provided to

particular employees of the Group through the Bytes

Technology Group plc share option plans. Information

relating to all schemes is provided in note 27.

Annual Report and Accounts 2024

25 163

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

1.25 Employee benefits continued

Employee options

The fair values of options granted under the Bytes

Technology Group plc share option plans are recognised

as an employee benefit expense, with a corresponding

increase in equity. The total amount to be expensed is

determined by reference to the fair value of the options

granted. The share-based payment reserve comprises

the fair value of share awards granted which are not yet

exercised. The amount will be reversed to retained

earnings as and when the related awards vest and are

exercised by employees.

The total expense is recognised over the vesting period,

which is the period over which all the specified vesting

conditions are to be satisfied. At the end of each period,

the Group revises its estimates of the number of options

issued that are expected to vest based on the service

conditions. It recognises the impact of the revision to

original estimates, if any, in profit or loss, with a

corresponding adjustment to equity.

1.26 Share capital

Ordinary shares are classified as equity. Incremental

costs directly attributable to the issue of ordinary shares

are recognised as a deduction from equity, net of any tax

effects.

1.27 Dividends

Dividends paid on ordinary shares are classified as equity

and are recognised as distributions in equity.

1.28 Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing:

• • The profit attributable to owners of the company,

excluding any costs of servicing equity other than

ordinary shares

• • By the weighted average number of ordinary shares

outstanding during the financial year, adjusted for

bonus elements in ordinary shares issued during the

year and excluding treasury shares.

(ii) Diluted earnings per share

Diluted earnings per share adjusts the figures used in the

determination of basic earnings per share to consider:

• • The after-income tax effect of interest and other

financing costs associated with dilutive potential

ordinary shares

• • The weighted average number of additional ordinary

shares that would have been outstanding, assuming

the conversion of all dilutive potential ordinary shares.

1.29 Rounding of amounts

All amounts disclosed in the consolidated financial

statements and notes have been rounded off to the

nearest thousand, unless otherwise stated.

164 Bytes Technology Group plc

FINANCIAL STATEMENTS

2 Segmental information

2(a) Description of segment

The information reported to the Group’s Chief Executive Officer, who is considered to be the chief operating decision maker

for the purposes of resource allocation and assessment of performance, is based wholly on the overall activities of the

Group. The Group has therefore determined that it has only one reportable segment under IFRS 8, which is that of ‘IT

solutions provider’. The Group’s revenue, results, assets and liabilities for this one reportable segment can be determined by

reference to the consolidated statement of profit or loss and the consolidated statement of financial position. An analysis of

revenues by product lines and geographical regions, which form one reportable segment, is set out in note 3.

2(b) Adjusted operating profit

Adjusted operating profit is an alternative performance measure which excludes the effects of acquired intangible assets

amortisation and share-based payment charges. It is used as one of the performance measures determining executive

bonus payments in the current and prior reporting periods. It reconciles to operating profit as follows:

		Year ended	Year ended
		28 February	29 February
		2025	2024
	Note	£’000	£’000
Adjusted operating profit		72,355	63,300
Share-based payment charges	27	(5,049)	(5,708)
Amortisation of acquired intangible assets	4	(880)	(880)
Operating profit		66,426	56,712

3 Revenue from contracts with customers

3(a) Disaggregation of revenue from contracts with customers

The Group derives revenue from the transfer of goods and services in the following major product lines and geographical

regions:

		Year ended	Year ended
		28 February	29 February
		2025	2024
Revenue by product		£’000	£’000
Software		146,002	130,365
Hardware		33,216	41,389
Services internal		34,032	31,517
Services external		3,884	3,750
Total revenue from contracts with customers	217,13	4	207,021

Software

The Group’s software revenue comprises the sale of various types of software licences (including both cloud-based and

non-cloud-based licences), subscriptions and software assurance products.

Hardware

The Group’s hardware revenue comprises the sale of items such as servers, laptops and other devices.

Services internal

The Group’s internal services revenue comprises internally provided consulting services through its own internal resources.

Services external

The Group’s external services revenue comprises the sale of externally provided training and consulting services through

third-party contractors.

	Year ended		Year ended
	28 February		29 February
	2025		2024
Revenue by geographical regions	£’000		£’000
United Kingdom	209,854		199,912
Europe	4,112		4,326
Rest of world	3,16	8	2,783
	217,13	4	207,021

Annual Report and Accounts 2024

25 165

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

3 Revenue from contracts with customers continued

3(b) Gross invoiced income by type

		Year ended	Year ended
		28 February	29 February
		2025	2024
		£’000	£’000
Software		2,005,289	1,721,993
Hardware		33,216	41,389
Services internal		34,032	31,517
Services external		27,267	28,10	3
		2,099,804		1,823,002
Gross invoiced income		2,099,804		1,823,002
Adjustment to gross invoiced income for income recognised as agent		(1,882,670)		(1,615,981)
Revenue	217,13	4		207,021

Gross invoiced income reflects gross income billed to customers adjusted for movements in deferred and accrued revenue

items amounting to a £7.7 million reduction (2024: £8.5 million increase). The Group reports gross invoiced income as an

alternative performance measure as management believes this measure allows further understanding of business

performance and volume of activity in respect of working capital and cash flow.

4 Material administrative expenses

The Group has identified several items included within administrative expenses which are material due to the significance of

their nature and/or amount. These are listed separately here to provide a better understanding of the financial performance

of the Group:

		Year ended	Year ended
		28 February	29 February
		2025	2024
	Note	£’000	£’000
Depreciation of property, plant and equipment	9	1,255	1,236
Depreciation of right-of-use assets	10	509	263
Amortisation of acquired intangible assets	11	880	880
System support and maintenance		4,670	3,872
Share-based payment expenses	27	5,049	5,708
Expenses relating to short-term leases	10	348	250
Rental income		(105)	–
Foreign exchange losses		55	137

5 Employees

		Year ended	Year ended
		28 February	29 February
		2025	2024
Employee benefit expense:	Note	£’000	£’000
Employee remuneration (including directors’ remuneration 1 )		55,497	49,791
Commissions and bonuses		24,837	21,623
Social security costs		9,762	9,479
Pension costs		2,009	1,794
Share-based payments expense	27	5,049	5,708
		97,154	88,395
Classified as follows:
Cost of sales		19,098	17, 211
Administrative expenses		78,056	71,184
		9 7,1 5 4	88,395

1 Directors’ remuneration is included in the directors’ remuneration report on pages 112 to 130.

166 Bytes Technology Group plc

FINANCIAL STATEMENTS

		Year ended	Year ended
		28 February	29 February
		2025	2024
The average monthly number of employees during the year was:		£’000	£’000
Sales – account management		378	335
Sales – support and specialists		251	228
Service delivery		290	263
Administration		231	202
	1,15	0	1,028

The employee benefit expenses in relation to the service delivery employees are included within cost of sales.

6 Auditors’ remuneration

During the year, the Group obtained the following services from the company’s auditors and its associates:

	Year ended	Year ended
	28 February	29 February
	2025	2024
	£’000	£’000
Fees payable to the company’s auditors and its associates for the audit
of the parent company and consolidated financial statements 1	316	688
Fees payable to the company’s auditors and its associates for other services:
Audit of the financial statements of the company’s subsidiaries	450	398
Non-audit services 2	105	101
	871	1,187

1 Other fees of £0.4 million in the prior year has been included within fees of the parent company.

2 Non-audit services in the current and prior year relate to the auditors’ review of our interim report issued in October of each year.

7 Finance income and costs

	Year ended	Year ended
	28 February	29 February
	2025	2024
	£’000	£’000
Finance income
Bank interest received 1	8,486	5,111
Finance income	8,486	5,111
Finance costs
Interest expense on financial liabilities measured at amortised cost	(224)	(330)
Interest expense on lease liability	(67)	(63)
Finance costs	(291)	(393)

1 Interest received on cash deposited on money market.

Annual Report and Accounts 2024

25 167

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

8 Income tax expense

The major components of the Group’s income tax expense for all periods are:

	Year ended	Year ended
	28 February	29 February
	2025	2024
	£’000	£’000
Current income tax charge in the year	19,175	15,892
Adjustment in respect of current income tax of previous years	(18)	(85)
Total current income tax charge	19,157	15,807
Deferred tax charge/(credit) in the year	604	(1,109)
Adjustments in respect of prior year	11	70
Effect of changes in tax rates	–	(23)
Deferred tax charge/(credit)	615	(1,062)
Total tax charge	19,772	14,745

Reconciliation of total tax charge

The tax assessed for the year differs from the standard rate of corporation tax in the UK applied to profit before tax

	Year ended		Year ended
	28 February		29 February
	2025		2024
	£’000		£’000
Profit before income tax	74,613		61,596
Income tax charge at the standard rate of corporation tax in the UK of 25% (2024: 24.49%) 1	18,653		15,085
Effects of:
Non-deductible expenses	1,124		(2 61)
Adjustment to previous periods	(7)		(15)
Effect of changes in tax rate	–		(23)
Effect of share of profit of associate	2		(41)
Income tax charge reported in profit or loss	19,772	14	,74 5

1 Prorated rate for change in tax rate from 19% to 25% on 1 April 2023.

	Year ended	Year ended
	28 February	29 February
	2025	2024
Amounts recognised directly in equity	£’000	£’000
Aggregate current and deferred tax arising in the reporting period and not recognised in net profit or loss or other comprehensive income but directly credited/(charged) to equity:
Deferred tax: share-based payments	(160)	407
Current tax: share-based payments	31	491
	(129)	898

On 23 May 2023, the International Accounting Standards Board (the Board) issued International Tax Reform – Pillar Two

Model Rules – Amendments to IAS 12. On 20 June 2023, Finance (No.2) Act 2023 was substantively enacted in the UK

introducing a global minimum effective tax rate of 15% for large groups, with revenues exceeding €750 million, for financial

years beginning on or after 31 December 2023. These rules are not expected to affect the Group.

168 Bytes Technology Group plc

FINANCIAL STATEMENTS

	Year ended	Year ended
	28 February	29 February
	2025	2024
Deferred tax asset – net	£’000	£’000
The balance comprises temporary differences attributable to:
Intangible assets	(568)	(788)
Property, plant and equipment	(2,088)	(1,059)
Employee benefits	6	1
Provisions	74	73
Share-based payments	2,635	2,607
	59	834

	Year ended	Year ended
	28 February	29 February
	2025	2024
Net deferred tax asset reconciliation	£’000	£’000
At 1 March	834	(635)
Intangible assets	220	220
Property, plant and equipment	(1,029)	(175)
Employee benefits	5	(2)
Provisions	1	8
Share-based payments	188	1,011
(Charge)/credit to profit or loss	(615)	1,062
Share-based payments	(160)	407
(Charge)/credit to equity	(160)	407
Carrying amount at end of year	59	834

The deferred tax asset and deferred tax liabilities carrying amounts at the end of the year are set off as they arise in the same

jurisdiction and as such there is a legally enforceable right to offset.

Annual Report and Accounts 2024

25 169

FINANCIAL STATEMENTS

9 Property, plant and equipment

	Freehold land	Computer	Furniture, fittings	Computer	Motor
	and buildings	equipment	and equipment	software	vehicles	Total
	£’000	£’000	£’000	£’000	£’000	£’000
Cost
At 1 March 2023	9,405	4,339	1,313	1,017	104	16,178
Additions	373	692	11	249	9	1,334
Disposals	–	(25)	–	–	(27)	(52)
At 29 February 2024	9,778	5,006	1,324	1,266	86	17,4 6 0
Additions	5,760	549	46	–	3	6,358
Disposals	–	(1)	–	–	(24)	(25)
At 28 February 2025	15,538	5,554	1,370	1,266	65	23,793
Depreciation
At 1 March 2023	2,516	3,469	1,043	698	72	7,798
On disposals	–	(25)	–	–	(27)	(52)
Charge for the year	421	584	51	163	17	1,236
At 29 February 2024	2,937	4,028	1,094	861	62	8,982
On disposals	–	(1)	–	–	(24)	(25)
Charge for the year	384	600	47	211	13	1,255
At 28 February 2025	3,321	4,627	1,141	1,072	51	10,212
Net book value
At 29 February 2024	6,841	978	230	405	24	8,478
At 28 February 2025	12,217	927	229	194	14	13,581

During the year the Group acquired property, for £5.4 million, adjacent to its offices in Leatherhead. Part of the property

acquired is subject to existing operating lease agreements. Since the property was acquired by the Group for use as

owner-occupied offices, the property has been included in owned property.

10 Leases

Group as a lessee

Amounts recognised in the balance sheet

	Buildings	Motor vehicles	Total
Right-of-use assets	£’000	£’000	£’000
Cost
At 1 March 2023	1,377	245	1,622
Additions	–	891	891
Disposals	–	(245)	(245)
At 29 February 2024	1,377	891	2,268
Additions	–	739	739
At 28 February 2025	1,377	1,630	3,007
Depreciation
At 1 March 2023	594	245	839
Disposals	–	(245)	(245)
Charge for the period	144	119	263
At 29 February 2024	738	119	857
Charge for the period	145	364	509
At 28 February 2025	883	483	1,366
Net book value
At 1 March 2023	783	–	783
At 29 February 2024	639	772	1,411
At 28 February 2025	494	1,147	1,641

Notes to the consolidated financial statements continued

170 Bytes Technology Group plc

FINANCIAL STATEMENTS

	As at	As at	As at
	28 February	29 February	1 March
	2025	2024	2023
Lease liabilities	£’000	£’000	£’000
Current	668	423	75
Non-current	1,269	1,314	917
	1,937	1,737	992

There were additions of £0.7 million to the right-of-use assets in the financial year ended 28 February 2025

(2024: £0.9 million).

Amounts recognised in the statement of profit or loss

The statement of profit or loss shows the following amounts relating to leases:

	Year ended	Year ended
	28 February	29 February
	2025	2024
	£’000	£’000
Depreciation charge of right-of-use assets	509	263
Interest expense (included in finance cost)	67	63
Expense relating to short-term leases (included in administrative expenses)	348	250

Changes in liabilities arising from financing activities

	As at				As at
	1 March				28 February
	2024	Additions	Cash flows	Interest	2025
	£’000	£’000	£’000	£’000	£’000
Lease liabilities	1,737	739	(606)	67	1,937
Total liabilities from financing activities	1,737	739	(606)	67	1,937

	As at				As at
	1 March				29 February
	2023	Additions	Cash flows	Interest	2024
	£’000	£’000	£’000	£’000	£’000
Lease liabilities	992	891	(209)	63	1,737
Total liabilities from financing activities	992	891	(209)	63	1,737

Group as a lessor

Contractual maturity of undiscounted operating lease receipts

The following table details the Group’s remaining contract maturity for operating leases on the Group during the year. There

were no operating lease receivables in the prior year. The table is based on undiscounted contractual receipts.

	Within 1 year	1 to 2 years	2 to 3 years	3 to 4 years	4 to 5 years	Over 5 years
28 February 2025	£’000	£’000	£’000	£’000	£’000	£’000
Operating lease
receivables	464	464	464	244	87	159

Annual Report and Accounts 2024

25 171

FINANCIAL STATEMENTS

11 Intangible assets

			Customer
		Goodwill	relationships	Brand	Software		Total
		£’000	£’000	£’000	£’000		£’000
Cost
At 1 March 2023 and 29 February 2024		37,4 9 3	8,798	3,653	–		49,944
Additions		–	–	–	3,709		3,709
At 28 February 2025	37,49	3	8,798	3,653	3,709		53,653
Amortisation
At 1 March 2023		–	4,765	3,653	–		8,418
Charge for the year		–	880	–	–		880
At 29 February 2024		–	5,645	3,653	–		9,298
Charge for the year		–	880	–	–		880
At 28 February 2025		–	6,525	3,653	–	10,17	8
Net book value
At 29 February 2024	3 7, 4 9 3		3 ,153	–	–		40,646
At 28 February 2025	37,49	3	2,273	–	3,709		43,475

During the year the Group capitalised internal software development costs of £3.7 million. The project was still in production

phase at the year end and as such there is no amortisation charge in the current financial year.

Determination of recoverable amount

The carrying value of indefinite useful life intangible assets, being goodwill, are tested annually for impairment. For each CGU

and for all periods presented, the Group has assessed that the value in use represents the recoverable amount. The future

expected cash flows used in the value-in-use models are based on management forecasts, over a five-year period, and

thereafter a reasonable rate of growth is applied based on current market conditions. The recoverable amount of Bytes

Software Services and Phoenix Software is estimated to be £755.3 million and £245.7 million respectively. For the purpose

of impairment assessments of goodwill, the goodwill balance is allocated to the operating units which represent the lowest

level within the Group at which the goodwill is monitored for internal management purposes.

A summary of the goodwill per CGU, as well as assumptions applied for impairment assessment purposes, is presented below:

	Long-term		Goodwill
	growth rate	Discount rate	carrying amount
28 February 2025	%	%	£’000
Bytes Software Services	2	9.20	14,775
Phoenix Software	2	9.20	22,718
			37,49	3

	Long-term		Goodwill
	growth rate	Discount rate	carrying amount
29 February 2024	%	%	£’000
Bytes Software Services	2	9.15	14,775
Phoenix Software	2	9.15	22,718
			37,4 9 3

Notes to the consolidated financial statements continued

172 Bytes Technology Group plc

FINANCIAL STATEMENTS

Growth rates

The Group used what it considers to be a conservative growth rate of 2% which was applied beyond the approved budget

periods. The growth rate was consistent with publicly available information relating to long-term average growth rates for the

market in which the respective CGU operated.

Discount rates

Discount rates used reflect both time value of money and other specific risks relating to the relevant CGU. Post-tax discount

rates have been applied. The difference between the value-in-use calculated using the post-tax discount rates and the

value-in-use calculated using pre-tax discount rates is not material.

Sensitivities

The impacts of variations in the calculation of value in use of assumed growth rate and post-tax discount rates applied to the

forecast future cash flows of the CGUs have been estimated as follows:

	Bytes Software	Phoenix
	Services	Software
28 February 2025	£’000	£’000
Headroom	702,044	212,605
1% increase in the post-tax discount rate applied to the forecast future cash flows	(94,207)	(31,522)
1% decrease in the post-tax discount rate applied to the forecast future cash flows	124,953	41,843
0.5% increase in the terminal growth rate	44,492	14,940
0.5% decrease in the terminal growth rate	(38,714)	(13,000)

	Bytes Software		Phoenix
	Services		Software
29 February 2024	£’000		£’000
Headroom	688,344		273,935
1% increase in the post-tax discount rate applied to the forecast future cash flows	(97,	59 2)	(38,628)
1% decrease in the post-tax discount rate applied to the forecast future cash flows		129,792	51,351
0.5% increase in the terminal growth rate		46,379	18,323
0.5% decrease in the terminal growth rate		(40,316)	(15,928)

None of the above sensitivities, taken either in isolation or aggregated, indicates a potential impairment. The directors

consider that there is no reasonable possible change in the assumptions used in the sensitivities that would result in an

impairment of goodwill.

12 Investment in an associate

With effect from 18 April 2023 the Group acquired 25.1% interest in Cloud Bridge Technologies Limited for £3.0 million,

settled in cash. The Group’s interest in Cloud Bridge Technologies Limited is accounted for using the equity method.

		As at	As at
		28 February	29 February
		2025	2024
		£’000	£’000
Current assets	7,98	0	8,302
Non-current assets	108		123
Current liabilities	(5,016)		(6,078)
Non-current liabilities	(771)		(11)
Equity	2,301		2,336
Group’s share in equity – 25.1%	578		586
Goodwill	2,607		2,607
Group’s carrying amount of the investment	3,18	5	3,193

Annual Report and Accounts 2024

25 173

FINANCIAL STATEMENTS

12 Investment in an associate continued

	As at	As at
	28 February	29 February
	2025	2024
	£’000	£’000
Revenue	28,920	13,851
Cost of sales	(26,755)	(11,7	8 9)
Administrative expenses	(2,340)		(1,171)
Finance costs	(56)		(6)
Profit before tax	(231)		885
Income tax expense	198		(222)
Profit for the period	(33)		663
Group’s share of profit for the period	(8)		166

The associate requires the Group’s consent to distribute its profits. The Group does not foresee giving such consent at the

reporting date. The associate had no contingent liabilities or capital commitments as at 28 February 2025.

In preparing the financial statements, the Group has considered whether there are impairment indicators present in relation

to the net assets of the associate which would require an adjustment to be made to the £3.2 million carrying amount of the

investment as at 28 February 2025. The Group has assessed its share of the value in use of the associate using future

expected cash flows based on management forecasts over a five-year period, and thereafter a reasonable rate of growth of

2% is applied based on current market conditions and using a discount rate of 9.2% (post-tax rate) in line with that of the

Group (see note 11). Based on this, the Group’s share in the recoverable amount of Cloud Bridge is estimated to be

£3.8 million which provides a headroom against the carrying value of £0.6 million. The calculation of future cash flows uses

estimates of revenue growth, gross margin, and administrative costs. In making its assessment, management have

considered several qualitative factors in respect of the Cloud Bridge business including historic track record of revenue

growth, increase in customer opportunities and pipeline, attainment of key vendor accreditations, development of internal

systems to deliver cost savings and efficiencies, and expansion of operations in other territories. Gross margin changes

create the greatest sensitivity and a 2% reduction across the assessment period would lead to an impairment to the carrying

value of £1.2 million. The value in use is also sensitive to changes in the discount rate applied. A 2% increase in the rate would

give rise to an impairment to the carrying value of £0.4 million. Taking the base headroom forecast and the qualitative factors

together, the Group concludes there is no impairment of the carrying amount of the investment at the reporting date.

13 Contract assets

	As at	As at
	28 February	29 February
	2025	2024
	£’000	£’000
Contract assets	11,746	14,445

	As at		As at
	28 February		29 February
	2025		2024
Contract assets is further broken down as:	£’000		£’000
Short-term contract assets	9,973	11,75	6
Long-term contract assets	1,773		2,689
	11,746		14,445

Contract assets include £1.7 million (2024: £2.4 million) of deferred costs relating to internal services contracts, and the

recognition of accrued revenue of £10.0 million (2024: £12.0 million) for certain large software orders where performance

obligations were satisfied in the period but not yet invoiced to the customer at the period end.

Notes to the consolidated financial statements continued

174 Bytes Technology Group plc

FINANCIAL STATEMENTS

14 Contract liabilities

	As at	As at
	28 February	29 February
	2025	2024
	£’000	£’000
Contract liabilities	27,279	21,485

	As at	As at
	28 February	29 February
	2025	2024
Contract liabilities is further broken down as:	£’000	£’000
Short-term contract liabilities	25,245	19,348
Long-term contract liabilities	2,034	2,137
	27,279	21,485

During the year, the Group recognised £19.3 million (2024: £23.9 million) of revenue that was included in the contract liability

balance at the beginning of the period. This liability arises where revenue has been deferred when the customer is invoiced

before the related performance obligations of the contract are satisfied, and the deferral of certain large payments received

in advance from customers.

15 Inventories

	As at	As at
	28 February	29 February
	2025	2024
	£’000	£’000
Inventories	14	60
	14	60

Inventories include asset management subscription licences purchased in advance for a specific customer that as yet

haven’t been consumed. Inventories recognised as an expense in cost of sales during the year amounted to £46,000

(29 February 2024: £nil).

16 Financial assets and financial liabilities

This note provides information about the Group’s financial instruments, including:

• • An overview of all financial instruments held by the Group

• • Specific information about each type of financial instrument

• • Accounting policies

• • Information about determining the fair value of the instruments, including judgements and estimation uncertainty involved.

The Group holds the following financial instruments:

		As at	As at
		28 February	29 February
		2025	2024
Financial assets	Note	£’000	£’000
Financial assets at amortised cost:
Trade receivables	17	259,224	212,432
Other receivables	17	6,917	7,415
		266,141	219,847

		As at	As at
		28 February	29 February
		2025	2024
Financial liabilities	Note	£’000	£’000
Financial liabilities at amortised cost:
Trade and other payables – current, excluding payroll tax and other statutory tax liabilities	19	301,669	259,661
Lease liabilities	10	1,937	1,737
		303,606	261,398

The Group’s exposure to various risks associated with the financial instruments is discussed in note 23. The maximum exposure

to credit risk at the end of the reporting period is the carrying amount of each class of financial assets mentioned above.

Annual Report and Accounts 2024

25 175

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

17 Trade and other receivables

	As at	As at
	28 February	29 February
	2025	2024
	£’000	£’000
Financial assets
Gross trade receivables	260,883	214,922
Less: impairment allowance	(1,659)	(2,490)
Net trade receivables	259,224	212,432
Other receivables	6,917	7, 415
	266,141	219,847
Non-financial assets
Prepayments	2,313	1,968
	2,313	1,968
Trade and other receivables	268,454	221,815

(i) Classification of trade receivables

Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course of business.

They are generally due for settlement within 30 days and are therefore all classified as current. Trade receivables are

recognised initially at the amount of consideration that is unconditional, unless they contain significant financing

components, in which case they are recognised at fair value. The Group holds the trade receivables with the objective of

collecting the contractual cash flows, and so it measures them subsequently at amortised cost using the effective interest

method. Details about the Group’s impairment policies are provided in note 1.19.

(ii) Fair values of trade receivables

Due to the short-term nature of the current receivables, their carrying amount is considered to be the same as their fair value.

(iii) Credit risk

Ageing and impairment analysis (excluding finance lease assets)

		Past due	Past due	Past due	Past due
	Current	0 to 30 days	31 to 60 days	61 to 120 days	121 to 365 days	Total
28 February 2025	£’000	£’000	£’000	£’000	£’000	£’000
Expected loss rate	0.07%	0.26%	2.90%	10.93%	44.84%
Gross carrying amount
– trade receivables	232,118	17,4 9 5	5,201	4,189	1,880	260,883
Loss allowance	162	45	151	458	843	1,659

		Past due	Past due	Past due		Past due
	Current	0 to 30 days	31 to 60 days	61 to 120 days		121 to 365 days	Total
29 February 2024	£’000	£’000	£’000	£’000		£’000	£’000
Expected loss rate	0.07%	0.41%	4 .16%	7.6 2 %		80.02%
Gross carrying amount
– trade receivables	180,289	23,688	4,994	3,74	4	2,207	214,922
Loss allowance	134	97	208		285	1,766	2,490

The closing loss allowances for trade receivables reconcile to the opening loss allowances as follows:

	As at	As at
	28 February	29 February
	2025	2024
Trade receivables	£’000	£’000
Opening loss allowance at 1 March	2,490	1,542
(Decrease)/increase in loss allowance recognised in profit or loss during the period	(108)	1,227
Receivables written off during the year as uncollectable	(723)	(279)
Closing loss allowance	1,659	2,490

176 Bytes Technology Group plc

FINANCIAL STATEMENTS

Trade receivables are written off where there is no reasonable expectation of recovery. Indicators that there is no reasonable

expectation of recovery include, among others, the failure of a debtor to engage in a repayment plan with the Group, and a

failure to make contractual payments for a period of greater than 120 days past due.

Impairment losses on trade receivables are presented as net impairment losses within operating profit. Subsequent

recoveries of amounts previously written off are credited against the same line item.

(iv) Other receivables

Other receivables include accrued rebate and other vendor incentive income of £5.6 million (2024: £5.7 million).

18 Cash and cash equivalents

	As at	As at
	28 February	29 February
	2025	2024
	£’000	£’000
Cash at bank and in hand	6,276	88,836
Short-term deposits	106,800	–
	113,076	88,836

Short-term deposits are made for varying periods of between one day and one month, depending on the immediate cash

requirements of the Group and earn interest at the respective short-term deposit rates.

19 Trade and other payables

	As at	As at
	28 February	29 February
	2025	2024
	£’000	£’000
Trade and other payables	179,003	168,777
Accrued expenses	122,666	90,884
Payroll tax and other statutory liabilities	25,864	18,256
	327,533	27 7, 917

Trade payables are unsecured and are usually paid within 45 days of recognition. Accrued expenses includes accruals for

purchase invoices not received and other accrued costs such as bonuses and commissions payable at year end.

The carrying amounts of trade and other payables are considered to be the same as their fair values, due to their short-term nature.

20 Share capital and share premium

	Number of	Nominal value	Share premium	Total
Allotted, called up and fully paid	shares	£’000	£’000	£’000
At 1 March 2023	239,482,333	2,395	633,636	636,031
Shares issued during the year	874,565	9	14	23
At 29 February 2024	240,356,898	2,404	633,650	636,054
Shares issued during the year	711, 3 67	7	2,782	2,789
At 28 February 2025	241,068,265	2,411	636,432	638,843

Ordinary shares have a nominal value of £0.01. All ordinary shares in issue rank pari passu and carry the same voting rights

and entitlement to receive dividends and other distributions declared or paid by the Group. The company does not have a

limited amount of authorised share capital.

Information related to the company’s share option schemes, including options issued during the financial year and options

outstanding at the end of the reporting period is set out in note 27.

Annual Report and Accounts 2024

25 177

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

21 Merger reserve

	As at	As at
	28 February	29 February
	2025	2024
	£’000	£’000
Balance at 1 March 2023, 29 February 2024 and 28 February 2025	(644,375)	(644,375)
	(644,375)	(644,375)

The merger reserve of £644.4 million arose in December 2019, on the date that the Group demerged from its previous parent

company. This is an accounting reserve in equity representing the difference between the total nominal value of the issued

share capital acquired in Bytes Technology Limited of £1.10 and the total consideration given of £644.4 million.

22 Cash generated from operations

		Year ended	Year ended
		28 February	29 February
		2025	2024
	Note	£’000	£’000
Profit before taxation		74,613	61,596
Adjustments for:
Depreciation and amortisation	4	2,644	2,379
Non-cash employee benefits expense – share-based payments	4	5,049	5,708
Share of profit of associate		8	(166)
Finance income	7	(8,486)	(5,111)
Finance costs	7	291	393
Decrease/(increase) in contract assets		2,699	(3,364)
Increase in trade and other receivables		(46,639)	(35,895)
Decrease/(increase) in inventories		46	(2)
Increase in trade and other payables		49,616	46,200
Increase/(decrease) in contract liabilities		5,794	(4,405)
Cash generated from operations		85,635	67,333

23 Financial risk management

This note explains the Group’s exposure to financial risks and how these risks could affect the Group’s future financial

performance. Current year consolidated profit or loss and statement of financial position information has been included

where relevant to add further context.

Management monitors the liquidity and cash flow risk of the Group carefully. Cash flow is monitored by management on a

regular basis and any working capital requirement is funded by cash resources or access to the revolving credit facility.

The main financial risks arising from the Group’s activities are credit, liquidity and currency risks. The Group’s policy in

respect of credit risk is to require appropriate credit checks on potential customers before sales are made. The Group’s

approach to credit risk is disclosed in note 17.

The Group’s policy in respect of liquidity risk is to maintain readily accessible bank deposit accounts to ensure that the

company has sufficient funds for its operations. The cash deposits are held in a mixture of short-term deposits and current

accounts which earn interest at a floating rate.

The Group’s policy in respect of currency risk, which primarily exists as a result of foreign currency purchases, is to either sell

in the currency of purchase, maintain sufficient cash reserves in the appropriate foreign currencies which can be used to

meet foreign currency liabilities, or take out forward currency contracts to cover the exposure.

23(a) Derivatives

Derivatives are only used for economic hedging purposes and not speculative investments.

The Group has taken out forward currency contracts during the periods presented but has not recognised either a forward

currency asset or liability at each period end as the fair value of the foreign currency forwards is considered to be immaterial

to the consolidated financial statements due to the low volume and short-term nature of the contracts. Similarly, the amounts

recognised in profit or loss in relation to derivatives were considered immaterial to disclose separately.

178 Bytes Technology Group plc

FINANCIAL STATEMENTS

23(b) Foreign exchange risk

The Group’s exposure to foreign currency risk at the end of the reporting period, was as follows:

		As at 28 February 2025			As at 29 February 2024
	USD	EUR	NOK	USD	EUR	NOK
	£’000	£’000	£’000	£’000	£’000	£’000
Trade receivables	11,3 4 8	3,945	–	10,247	2,661	–
Cash and cash
equivalents	3,627	155	–	176	1,647	–
Trade payables	(18,663)	(3,529)	(53)	(16,640)	(4,253)	(580)
	(3,688)	571	(53)	(6,217)	55	(580)

The following table demonstrates the profit before tax sensitivity to a possible change in the currency exchange rates with

GBP, all other variables held constant.

		As at 28 February 2025			As at 29 February 2024
	GBP:USD	GBP:EUR	GBP:NOK	GBP:USD	GBP:EUR	GBP:NOK
	£’000	£’000	£’000	£’000	£’000	£’000
5% strengthening in GBP	176	(27)	3	296	(3)	28
5% weakening in GBP	(194)	30	(3)	(327)	3	(31)

The aggregate net foreign exchange gains/losses recognised in profit or loss were:

	Year ended	Year ended
	28 February	29 February
	2025	2024
	£’000	£’000
Total net foreign exchange losses in profit or loss	55	137

23(c) Liquidity risk

(1) Cash management

Prudent liquidity risk management implies maintaining sufficient cash to meet obligations when due. The Group generates

positive cash flows from operating activities and these fund short-term working capital requirements. The Group aims to

maintain significant cash reserves and none of its cash reserves is subject to restrictions. Access to cash is not restricted and

all cash balances could be drawn on immediately if required. Management monitors the levels of cash deposits carefully and

is comfortable that for normal operating requirements; no further external borrowings are currently required.

At 28 February 2025, the Group had cash and cash equivalents of £113.1 million, see note 18. Management monitors rolling

forecasts of the Group’s liquidity position (which comprises its cash and cash equivalents) on the basis of expected cash

flows generated from the Group’s operations. These forecasts are generally carried out at a local level in the operating

companies of the Group in accordance with practice and limits set by the Group and take into account certain down-case

scenarios.

(2) Revolving Credit Facility

On 17 May 2023 the Group entered into a new three-year committed Revolving Credit Facility (RCF) for £30 million including

an optional one-year extension to 17 May 2027, and a non-committed £20 million accordion to increase the availability of

funding should it be required for future activity. The new facility incurred an arrangement fee of £0.1 million, being 0.4% of the

new funds available. The Group has so far not drawn down any amount on either the previous or new facility and to the extent

that there is no evidence that it is probable that some or all of the facility will be drawn down, the fees are capitalised as a

prepayment and amortised over the initial three-year period of the facility. The facility also incurs a commitment fee and

utilisation fee, both of which are payable quarterly in arrears. Under the terms of both the previous and new facilities, the

Group is required to comply with the following financial covenants:

• • Interest cover: EBITDA (earnings before interest, tax, depreciation and amortisation) to net finance charges for the past

12 months shall be greater than 4.0 times

• • Leverage: net debt to EBITDA for the past 12 months must not exceed 2.5 times.

The Group has complied with these covenants throughout the reporting period. As at 28 February 2025 and 29 February

2024, the Group had net finance income and has therefore complied with the interest cover covenant. The Group has been in

a net cash position as at 28 February 2025 and 29 February 2024 and has therefore complied with the Net debt to

EBITDA covenant.

Annual Report and Accounts 2024

25 179

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

23 Financial risk management continued

(3) Contractual maturity of financial liabilities

The following table details the Group’s remaining contractual maturity for its financial liabilities based on undiscounted

contractual payments:

						Total
						contractual	Carrying
		Within 1 year	1 to 2 years	2 to 5 years	Over 5 years	cash flows	amount
28 February 2025	Note	£’000	£’000	£’000	£’000	£’000	£’000
Trade and other payables	19	301,669	–	–	–	301,669	301,669
Lease liabilities	10	726	689	627	–	2,042	1,937
		302,395	689	627	–	30 3,711	303,606

								Total
								contractual	Carrying
				Within 1 year	1 to 2 years	2 to 5 years	Over 5 years	cash flows	amount
29 February 2024	Note			£’000	£’000	£’000	£’000	£’000	£’000
Trade and other payables	19			259,660	–	–	–	259,660	259,660
Lease liabilities	10			495	495	869	–	1,859	1,737
		26	0	,15 5	495	869	–	261,519	261,397

24 Capital management

24(a) Risk management

For the purpose of the Group’s capital management, capital includes issued capital, ordinary shares, share premium and all

other equity reserves attributable to the equity holders of the parent. The primary objective of the Group’s capital

management is to maximise shareholder value.

The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the

requirements of shareholders. To maintain or adjust the capital structure, the Group may adjust the dividend payment to

shareholders, return capital to shareholders or issue new shares. To ensure an appropriate return for shareholders’ capital

invested in the Group, management thoroughly evaluates all material revenue streams, relationships with key vendors and

potential acquisitions and approves them by the Board, where applicable. The Group’s dividend policy is based on the

profitability of the business and underlying growth in earnings of the Group, as well as its capital requirements and cash

flows. The Group’s dividend policy is to distribute 40–50% of the Group’s post-tax pre-exceptional earnings to shareholders

in respect of each financial year. Subject to any cash requirements for ongoing investment, the Board will consider returning

excess cash to shareholders over time.

24(b) Dividends

	2025			2024
Ordinary shares	Pence per share		£’000	Pence per share	£’000
Interim dividend paid	3 .1	7,	46 9	2.7	6,466
Special dividend paid	8.7		20,936	7.5	17,9 61
Final dividend paid	6.0		14,438	5.1	12,214
Total dividends attributable to ordinary shareholders	17.8		42,843	15.3	36,641

Dividends per share is calculated by dividing the dividend paid by the number of ordinary shares in issue. Dividends are paid

out of available distributable reserves of the company.

The Board has proposed a final ordinary dividend of 6.9 pence and a special dividend of 10.0 pence per share for the

year ended 28 February 2025 to be paid to shareholders on the register as at 11 July 2025. The aggregate of the proposed

dividends expected to be paid on 25 July 2025 is £40.7 million. The proposed dividends per ordinary shares are subject to

approval at the Annual General Meeting and are not recognised as a liability in the consolidated financial statements.

180 Bytes Technology Group plc

FINANCIAL STATEMENTS

25 Capital commitments

At 28 February 2025, the Group had £Nil capital commitments (29 February 2024: £Nil).

26 Related-party transactions

In the ordinary course of business, the Group carries out transactions with related parties, as defined by IAS 24 Related Party

Disclosures. Apart from those disclosed elsewhere in the consolidated financial statements, material transactions for the

year are set out below:

26(a) Transactions with key management personnel

Key management personnel are defined as the directors (both executive and non-executive) of Bytes Technology Group plc,

Bytes Software Services Limited and Phoenix Software Limited. Details of the compensation paid to the directors of Bytes

Technology Group plc as well as their shareholdings in the Group are disclosed in the remuneration report.

Compensation of key management personnel of the Group

The remuneration of key management personnel, which consists of persons who have been deemed to be discharging

managerial responsibilities, is set out below in aggregate for each of the categories specified in IAS 24 Related Party

Disclosures.

	Year ended	Year ended
	28 February	29 February
	2025	2024
	£’000	£’000
Short-term employee benefits	4,591	3,653
Post-employment pension benefits	121	97
Total compensation paid to key management	4,712	3,750

The amounts disclosed in the table are the amounts recognised as an expense during the reporting period related to key

management personnel including executive directors.

Key management personnel received a total of 376,082 share option awards (2024: 170,360) at a weighted average exercise

price of £0.21 (2024: £0.04).

Share-based payment charges include £1,570,816 (2024: £1,257,326) in respect of key management personnel, refer to

note 27 for details on the Group’s share-based payment incentive schemes.

26(b) Subsidiaries and associates

Interests in subsidiaries are set out in note 29 and the investment in associate is set out in note 12.

26(c) Outstanding balances arising from sales/purchases of services

Group companies made purchases from the associate of £4.9 million (2024: £3.1 million) and sales to the associate of

£0.1 million (2024: £nil) during the year with a trade payable balance of £0.1 million (2024: £0.5 million) at the year end.

27 Share-based payments

The Group accounts for its share option awards as equity-settled share-based payments. The fair value of the awards

granted is recognised as an expense over the vesting period. The amount recognised in the share-based payment reserve

will be reversed to retained earnings as and when the related awards vest and are exercised by employees. As noted in the

prior year Annual Report, one third of the annual bonus for the financial year ended 28 February 2025 awarded to each of the

Company’s executive directors is deferred in shares for two years. This deferral has resulted in the granting of the awards

under the Deferred Bonus Plan during the year.

Performance Incentive Share Plan

Options granted under the Performance Incentive Share Plan (PISP) are for shares in Bytes Technology Group plc. The

exercise price of the options is a nominal amount of £0.01. Performance conditions attached to the awards granted in the

current year are employee-specific, in addition to which, options will only vest if certain employment conditions are met. The

fair value of the share options is estimated at the grant date using a Monte Carlo option pricing model for the element with

market conditions and Black–Scholes option-pricing model for non-market conditions. The normal vesting date shall be no

earlier than the third anniversary of the grant date and not later than the day before the tenth anniversary of the grant date.

There is no cash settlement of the options available under the scheme. During the year the Group granted 961,569 (2024:

1,195,700) options. For the year ended 28 February 2025, 47,463 (2024: 298,561) options were forfeited, 57,583 options

were exercised (2024: 819,416) and no options expired.

Annual Report and Accounts 2024

25 181

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

27 Share-based payments continued

Company Share Option Plan

Options granted under the Company Share Option Plan (CSOP) are for shares in Bytes Technology Group plc. The exercise

price of the options granted in the current year was determined by the average of the last three dealing days prior to the date

of grant. There are no performance conditions attached to the awards, but options will only vest if certain employment

conditions are met. The fair value at grant date is estimated at the grant date using a Black–Scholes option-pricing model.

The normal vesting date shall be no earlier than the third anniversary of the grant date and not later than the day before the

tenth anniversary of the grant date. There is no cash settlement of the options available under the scheme. During the year

the Group granted no (2024: nil) options. For the year ended 28 February 2025, 174,897 (2024: 176,600) options were

forfeited, 217,000 (2024: nil) options were exercised and no options expired.

Save as You Earn Scheme

Share options were granted to eligible employees under the Save As You Earn Scheme (SAYE) during the year. Under the

SAYE scheme, employees enter a three-year savings contract in which they save a fixed amount each month in return for

their SAYE options. At the end of the three-year period, employees can either exercise their options in exchange for shares in

Bytes Technology Group plc or have their savings returned to them in full. The exercise price of the options represents a 20%

discount to the exercise price of the CSOP awards. The fair value at grant date is estimated using a Black–Scholes option-

pricing model. There is no cash settlement of the options. During the year the Group granted 449,394 (2024: 337,890)

options. For the year ended 28 February 2025, 214,641 (2024: 213,832) options were forfeited, 425,868 (2024: 3,625)

options were exercised and 32,865 (2024: nil) options expired.

Deferred Bonus Plan

Options granted under the Deferred Bonus Plan (DBP) are for shares in Bytes Technology Group plc. The exercise price of

the options is a nominal amount of £0.01. There are no performance conditions attached to the awards, but options will only

vest if certain employment conditions are met. The fair value at grant date is estimated at the grant date using a Black–

Scholes option-pricing model. The normal vesting date shall be no earlier than the second anniversary of the grant date.

During the year the Group granted 16,675 (2024: 45,365) options. For the year ended 28 February 2025, no (2024: 50,526)

options were forfeited and 10,916 options were exercised. No options expired in the current or prior period.

Share-based payment employee expenses

	Year ended	Year ended
	28 February	29 February
	2025	2024
	£’000	£’000
Equity settled share-based payment expenses	5,049	5,708

There were no cancellations or modifications to the awards in 2025 or 2024.

Movements during the year

The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, share options

during the year:

	28 February	28 February	29 February	29 February
	2025	2025	2024	2024
	Number	WAEP	Number	WAEP
Outstanding at 1 March	8,813,260	£3.52	8,760,684	£3.59
Granted during the year	1,428,249	£1.44	1,666,660	£0.80
Forfeited during the year	(437,001)	£3.96	(739,519)	£2.28
Exercised during the year	(711,367) 1	£3.92	(874,565) 1	£0.03
Expired during the year	(32,865)	£4.00	–	–
Outstanding at 29 February	9,060,276	£3.14	8,813,260	£3.52
Exercisable at 29 February	2,802,279	£4.02	609,272	£0.01

1 The weighted average share price at date of exercise was £5.09 (2024: £5.85).

The weighted average expected remaining contractual life for the share options outstanding at 28 February 2025 was 1.53

years (2024: 2.2 years). The weighted average fair value of options granted during the year was £3.93 (2024: £4.21).

The range of exercise prices for options outstanding at the end of the year was £0.01 to £5.00 (2024: £0.01 to £5.00).

182 Bytes Technology Group plc

FINANCIAL STATEMENTS

The tables below list the inputs to the models used for the awards granted under the below plans for the years ended

28 February 2025 and 29 February 2024:

	28 February	28 February	28 February
	2025	2025	2025
Assumptions	PISP	SAYE	DBP
Weighted average fair value at measurement date	£5.11	£1.33	£5.58
Expected dividend yield	1.56%	1.76%	0.00%
Expected volatility	34%	34%	33%
Risk-free interest rate	4.31%	3.74%	4.47%
Expected life of options	3 years	3 years	2 years
Weighted average share price	£5.59	£4.94	£5.59
Model used	Black-Scholes	Black-Scholes	Black-Scholes
	and Monte Carlo

	29 February	29 February	29 February
	2024	2024	2024
Assumptions	PISP	SAYE	DBP
Weighted average fair value at measurement date	£4.86	£1.79	£5.15
Expected dividend yield	1.53%	1.53%	0.00%
Expected volatility	31%	30%	30%
Risk-free interest rate	4.29%	4.79%	4.44%
Expected life of options	3 years	3 years	2 years
Weighted average share price	£ 5 .16	£ 5.11	£ 5.16
Model used	Black-Scholes	Black-Scholes	Black-Scholes
	and Monte Carlo

The expected life of the options is based on current expectations and is not necessarily indicative of exercise patterns that

may occur. The expected volatility reflects the assumption that the historical volatility of the company and publicly quoted

companies in a similar sector to the company over a period similar to the life of the options is indicative of future trends, which

may not necessarily be the actual outcome.

28 Earnings per share

The Group calculates earnings per share (EPS) on several different bases in accordance with IFRS and prevailing South

Africa requirements.

	Year ended	Year ended
	28 February	29 February
	2025	2024
	pence	pence
Basic earnings per share	22.78	19.55
Diluted earnings per share	21.95	18.85
Headline earnings per share	22.78	19.55
Diluted headline earnings per share	21.95	18.85
Adjusted earnings per share	25.07	21.78
Diluted adjusted earnings per share	24.16	21.01

Annual Report and Accounts 2024

25 183

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

28 Earnings per share continued

28(a) Weighted average number of shares used as the denominator

		Year ended	Year ended
		28 February	29 February
		2025	2024
		Number	Number
Weighted average number of ordinary shares used as the denominator
in calculating basic earnings per share and headline earnings per share		240,750,619	239,693,670
Adjustments for calculation of diluted earnings per share and diluted
headline earnings per share:
փ	share options 1	9,060,276	8,813,260
Weighted average number of ordinary shares and potential ordinary shares used
as the denominator in calculating diluted earnings per share and diluted headline
earnings per share		249,810,895	248,506,930

1 Share options

Share options granted to employees under the Save As You Earn Scheme, Company Share Option Plan and Bytes Technology Group plc performance incentive share

plan are considered to be potential ordinary shares. They have been included in the determination of diluted earnings per share on the basis that all employees are

employed at the reporting date, and to the extent that they are dilutive. The options have not been included in the determination of basic earnings per share. Details

relating to the share options are disclosed in note 27.

28(b) Headline earnings per share

The Group is required to calculate headline earnings per share (HEPS) in accordance with the JSE Listing Requirements. The

table below reconciles the profits attributable to ordinary shareholders to headline earnings and summarises the calculation

of basic and diluted HEPS:

		Year ended	Year ended
		28 February	29 February
		2025	2024
	Note	pence	pence
Profit for the period attributable to owners of the company		54,841	46,851
Adjusted for:
Loss on disposal of property, plant and equipment	4	–	–
Tax effect thereon		–	–
Headline profits attributable to owners of the company		54,841	46,851

28(c) Adjusted earnings per share

Adjusted earnings per share is an alternative performance measure used as a target for the PSP awards made in 2022, 2023

and 2024. It is calculated by dividing the adjusted profits attributable to ordinary shareholders by the total number of ordinary

shares in issue at the end of the year. Adjusted profit is calculated by excluding the impact of the following items:

• • Share-based payment charges

• • Acquired intangible assets amortisation.

The table below reconciles the profit for the financial year to adjusted earnings and summarises the calculation of

adjusted EPS:

			Year ended	Year ended
			28 February	29 February
			2025	2024
		Note	£’000	£’000
Profits attributable to owners of the company			54,841	46,851
Adjusted for:
փ	Amortisation of acquired intangible assets	4	880	880
փ	Deferred tax effect on above		(220)	(220)
փ	Share-based payment charges	27	5,049	5,708
փ	Deferred tax effect on above		(188)	(1,011)
Adjusted profits attributable to owners of the company			60,362	52,208

184 Bytes Technology Group plc

FINANCIAL STATEMENTS

29 Subsidiaries

The Group’s subsidiaries included in the consolidated financial statements are set out below. The country of incorporation is

also their principal place of business.

	Country of	Ownership
Name of entity	incorporation	interest	Principal activities
Bytes Technology Holdco Limited 1	UK	100%	Holding company
Bytes Technology Limited	UK	100%	Holding company
Bytes Software Services Limited	UK	100%	Providing cloud-based licensing and infrastructure and security
			sales within both the corporate and public sectors
Phoenix Software Limited	UK	100%	Providing cloud-based licensing and infrastructure and security
			sales within both the corporate and public sectors
Blenheim Group Limited 2	UK	100%	Dormant for all periods
License Dashboard Limited 2	UK	100%	Dormant for all periods
Bytes Security Partnerships Limited 2	UK	100%	Dormant for all periods
Bytes Technology Group Holdings Limited 2	UK	100%	Dormant for all periods
Bytes Technology Training Limited 2	UK	100%	Dormant for all periods

1 Bytes Technology Holdco Limited is held directly by the company. All other subsidiary undertakings are held indirectly by the company.

2 Taken advantage of the audit exemption set out within section 479A of the Companies Act 2006 for the year ended 28 February 2025.

The registered address of all of the Group subsidiaries included above is Bytes House, Randalls Way, Leatherhead, Surrey,

KT22 7TW.

30 Events after the reporting period

There were no events after the period that require disclosure.

Annual Report and Accounts 2024

25 185

FINANCIAL STATEMENTS

Note

As at

28 February

2025

£’000

As at

29 February

2024

£’000

Assets

Non-current assets

Investments 5 641,998 641,998

Property, plant and equipment 6 55 121

Deferred tax assets 4 320 141

Total non-current assets 642,373 642,260

Current assets

Trade and other receivables 7 255 12,884

Cash and cash equivalents 62,394 40,421

Total current assets 62,649 53,305

Total assets 705,022 695,565

Current liabilities

Trade and other payables 8 (2,10 6) (7,8 60)

Current tax liability (296) (157)

Total current liabilities (2,402) (8,017)

Total liabilities (2,402) (8,017)

Net assets 702,620 687,548

Equity

Share capital 10 2,411 2,404

Share premium 10 636,432 633,650

Share-based payment reserves 13,927 9,969

Retained earnings

49,850 41,525

Total equity 702,620 687,548

1 The profit for the company for the period was £5 0,0 7 7 ,0 0 0 (2024: £39,781,000).

The financial statements on pages 186 to 195 were approved by the Board on 12 May 2025 and signed on its behalf by:

Sam Mudd Andrew Holden

Chief Executive Officer Chief Financial Officer

Parent company financial statements of

BytesTechnology Group plc

Company balance sheet

As at 28 February 2025

186 Bytes Technology Group plc

PARENT COMPANY FINANCIAL STATEMENTS

Note

Attributable to owners of the company

capital

£’000

premium

£’000

Share-based

payment

reserve

£’000

Retained

earnings

£’000

Total

£’000

At 1 March 2023 2,395 633,636 7,0 5 2 35,594 678,677

Total comprehensive income for the year – – 39,781 39,781

Dividends paid – – – (36,6 41) (36,641)

Shares issued during the year 10 9 14 – – 23

Transfer to retained earnings – – (2,791) 2,791 –

Share-based payment transactions – – 5,708 – 5,708

Balance at 29 February 2024 2,404 633,650 9,969 41,525 687,548

Total comprehensive income for the year – – – 50,077 50,077

Dividends paid – – – (42,843) (42,843)

Shares issued during the year 10 7 2,782 – – 2,789

Transfer to retained earnings – – (1,0 91) 1,091 –

Share-based payment transactions – – 5,049 – 5,049

Balance at 28 February 2025 2,411 636,432 13,927 49,850 702,620

Company statement of changes in equity

For the year ended 28 February 2025

Annual Report and Accounts 2024

25 187

FINANCIAL STATEMENTS

Notes to the financial statements

1 Accounting policies

The principal accounting policies applied are

summarisedbelow.

1.1 Authorisation of financial statements and statement

of compliance with Financial Reporting Standard 101

Reduced Disclosure Framework (FRS 101)

The financial statements of Bytes Technology Group plc

for the period ended 28 February 2025 were approved

and signed by the Chief Executive Officer on 12 May 2025

having been duly authorised to do so by the Board. The

company meets the definition of a qualifying entity under

Financial Reporting Standard 100 Application of Financial

Reporting Requirements (FRS 100) issued by the

Financial Reporting Council. Accordingly, these financial

statements have been prepared in accordance with FRS

101 and in accordance with the provisions of the UK

Companies Act 2006.

1.2 Basis of preparation

The financial statements have been prepared in

accordance with Financial Reporting Standard 101

Reduced Disclosure Framework (FRS 101) and the

Companies Act 2006. The financial statements have been

prepared under the historical cost convention.

Bytes Technology Group plc is a company incorporated in

the UK under the Companies Act. The address of the

registered office is provided on page 199. The company is

the ultimate parent company and provides management

services to subsidiary undertakings in respect of certain

head office functions and requirements, which are

recharged as the costs are incurred by the company.

The company’s financial statements are included in the

Bytes Technology Group plc consolidated financial

statements for the period ended 28 February 2025.

These financial statements are separate financial

statements.

The company has taken advantage of the following

disclosure exemptions in preparing these financial

statements, as permitted by FRS 101:

• • The requirements of IFRS 7 Financial Instruments

Disclosures

• • The requirements of paragraphs 91 to 99 of IFRS 13

Fair Value Measurement

• • The requirement in paragraph 38 of IAS 1

Presentation of Financial Statements to present

comparative information in respect of paragraph

79(a)(iv) of IAS 1

• • The requirement of paragraphs 10(d), 10(f), 16, 38A,

38B, 38C, 38D, 40A, 40B, 40C, 40D, 111 and 134 to

136 of IAS 1 Presentation of Financial Statements

• • The requirements of IAS 7 Statement of Cash Flows

• • The requirements of paragraphs 30 and 31 of IAS 8

Accounting Policies, Changes in Accounting

Estimates and Errors

• • The requirements of paragraphs 17 and 18A of IAS 24

Related Party Disclosures

• • The requirements in IAS 24 Related Party Disclosures

to disclose related party transactions entered into

between two or more members of a group, provided

that any subsidiary which is a party to the transaction

is wholly owned by such a member

• • The requirements of paragraphs 130(f)(ii), 130(f)(iii),

134(d) to 134(f) and 135(c) to 135(e) of IAS 36

Impairment of Assets, provided that equivalent

disclosures are included in the consolidated financial

statements of the group in which the entity is

consolidated

• • The requirements of the second sentence of

paragraph 110 and paragraphs 113(a), 114, 115, 118,

119(a) to (c), 120 to 127 and 129 of IFRS 15 Revenue

from Contracts with Customers.

Where required, equivalent disclosures are given in the

consolidated financial statements of Bytes Technology

Group plc. As permitted by Section 408 of the Companies

Act 2006, the income statement of the company is not

presented as part of these financial statements.

1.3 Going concern

The ability of the company to continue as a going concern

is contingent on the ongoing viability of the Group and its

ability to continue as a going concern. The Group has

prepared its going concern assessment and this is

provided in note 1.3 in the notes to the financial

statements included in the Bytes Technology Group plc

consolidated financial statements. Having assessed the

Group’s overall assessment of going concern in relation to

the company, the directors considered it appropriate to

adopt the going concern basis of accounting in preparing

the company’s financial statements.

1.4 Critical accounting estimates and judgements

The preparation of the financial statements requires the

use of accounting estimates which, by definition, will

seldom equal the actual results. Management also needs

to exercise judgement in applying the company’s

accounting policies.

There are no major sources of estimation uncertainty at

the end of the reporting period that have a significant risk

of resulting in a material adjustment to the carrying

amounts of assets and liabilities within the next financial

year. In order to ensure no new sources are missed,

estimates and judgements are continually evaluated and

are based on historical experience and other factors,

including expectations of future events that are believed to

be reasonable under the circumstances.

188 Bytes Technology Group plc

PARENT COMPANY FINANCIAL STATEMENTS

The other areas involving accounting estimates are:

Impairment of investment

The investment in subsidiary is assessed annually to

determine if there is any indication that the investment

might be impaired. The recoverable amount is determined

based on a value-in-use calculation and compared to the

carrying value of the investment. The value-in-use

calculation is based on forecasts approved by

management. The cash flows beyond the forecast period

are extrapolated using estimated long-term growth rates.

The forecast cash flows are discounted at the company’s

discount rate. The recoverable value of the investment is

estimated to be the sum of the recoverable values of the

two principal operating companies within the Group of

which the company is parent as disclosed in note 11 to the

notes to the consolidated financial statements of the Group.

1.5 Changes in accounting policy and disclosures

(a) New and amended standards adopted by the company

The Group has applied the following standard or

amendments for the first time in the annual reporting

period commencing 1 March 2024:

• • Classification of liabilities as current or non-current –

Amendments to IAS 1

• • Non-current liabilities with covenants – Amendments

to IAS 1

• • Lease liability in a sale and leaseback – Amendments

to IFRS 16

• • Supplier finance arrangements – Amendments to IAS

7 and IFRS 7

The amendments listed above did not have any impact on

the amounts recognised in current or prior periods and

are not expected to affect future periods.

(b) New standards and interpretations not yet adopted

Certain new accounting standards and interpretations

have been published that are not mandatory for the

year ended 28 February 2025 and have not been adopted

early by the company. These standards are not expected

to have a material impact on the company in the current or

future reporting periods.

• • Lack of exchangeability – Amendments to IAS 21

• • Classification and measurement of financial

instruments - Amendments to IFRS 7 and IFRS 9

The Group is assessing the impact of IFRS 18 Presentation

and disclosure in financial statements which, if adopted by

the UK Endorsement Board, will be effective for reporting

periods beginning on or after 1 January 2027.

1.6 Investments

Investments in subsidiary undertakings are included in the

balance sheet at cost less any provision for impairment in

value. The company assesses investments for impairment

whenever events or changes in circumstances indicate

that the carrying amount may not be recoverable. If any

such indication of impairment exists, the company makes

an estimate of its recoverable amount. Where the carrying

amount of an investment exceeds its recoverable amount,

the investment is considered impaired and is written down

to its recoverable amount. Where these circumstances

have reversed, the impairment previously made is reversed

to the extent of the original cost of the investment.

1.7 Functional and presentation currency

The financial statements are presented in pounds sterling

(£), which is the company’s functional and presentation

currency. All transactions undertaken by the company are

denominated in pounds sterling.

1.8 Revenue recognition

The company provides management services to subsidiary

undertakings which are invoiced quarterly in arrears.

Revenue from providing such services is recognised in the

accounting period in which the services are rendered on

an over time basis. In measuring its performance and the

amount of revenue to be recognised, the company applies

an inputs basis by reference to the costs incurred by the

company and the hours expended by management for

providing services to the measurement date.

1.9 Income tax

The income tax expense or credit for the period is the tax

payable on the current period’s taxable income based on

the applicable income tax rate for each jurisdiction adjusted

by changes in deferred tax assets and liabilities attributable

to temporary differences and to unused taxlosses.

The current income tax charge is calculated on the basis

of the tax laws enacted or substantively enacted at the end

of the reporting period in the UK. Management

periodically evaluates positions taken in tax returns with

respect to situations in which applicable tax regulation is

subject to interpretation. It establishes provisions, where

appropriate, on the basis of amounts expected to be paid

to the tax authorities.

Deferred income tax is provided in full, using the liability

method, on temporary differences arising between the tax

bases of assets and liabilities and their carrying amounts

in the financial statements. Deferred income tax is also not

accounted for if it arises from initial recognition of an asset or

liability in a transaction other than a business combination

that at the time of the transaction affects neither accounting

nor taxable profit or loss. Deferred income tax is determined

using tax rates (and laws) that have been enacted or

substantially enacted by the end of the reporting period and

are expected to apply when the related deferred income tax

asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised only if it is probable

that future taxable amounts will be available to utilise

those temporary differences and losses.

Deferred tax assets and liabilities are offset when there is a

legally enforceable right to offset current tax assets and

liabilities and when the deferred tax balances relate to the

same taxation authority. Current tax assets and tax liabilities

are offset where the entity has a legally enforceable right to

offset and intends either to settle on a net basis, or to realise

the asset and settle the liability simultaneously.

Current and deferred tax is recognised in profit or loss,

except to the extent that it relates to items recognised in

other comprehensive income or directly in equity. In this

case, the tax is also recognised in other comprehensive

income or directly in equity, respectively.

Annual Report and Accounts 2024

25 189

FINANCIAL STATEMENTS

Notes to the financial statements continued

1.10 Property, plant and equipment

Owned assets

Property, plant and equipment is measured at cost less

accumulated depreciation and impairment losses. When

components of an item of property, plant and equipment

have different useful lives, those components are

accounted for as separate items of property, plant and

equipment. Cost includes expenditure that is directly

attributable to the acquisition of the asset.

Depreciation

Depreciation is recognised in profit or loss for each

category of assets on a straight-line basis over their

expected useful lives up to their respective estimated

residual values.

The estimated useful lives for the current and comparative

periods are as follows:

• • IT software, three years.

The depreciation methods, useful lives and residual values

are reassessed annually and adjusted if appropriate.

1.11 Trade and other receivables

Trade receivables are recognised initially at the amount of

consideration that is unconditional, i.e. fair value and

subsequently measured at amortised cost using the

effective interest method, less loss allowance.

Prepayments and other receivables are stated at their

nominal values.

1.12 Cash and cash equivalents

Cash is represented by cash in hand and deposits with

financial institutions repayable without penalty on notice

of not more than 24 hours. Cash equivalents are highly

liquid investments that mature in no more than three

months from the date of acquisition and that are readily

convertible to known amounts of cash with insignificant

risk of change in value. Cash and cash equivalents at

28 February 2025 includes short-term deposits of

£62.3 million (2024: £nil).

1.13 Financial instruments

Financial instruments comprise investments in equity,

loans receivable, trade and other receivables (excluding

prepayments), investments, cash and cash equivalents,

current loans, and trade and other payables.

Recognition

Financial assets and liabilities are recognised in the

company’s balance sheet when the company becomes a

party to the contractual provisions of the instruments.

Financial assets are classified as current if expected to be

realised or settled within 12 months from the reporting

date; if not, they are classified as non-current. Financial

liabilities are classified as non-current if the company has

an unconditional right to defer payment for more than 12

months from the reporting date.

Classification

The company classifies financial assets on initial

recognition as measured at amortised cost, fair value

through other comprehensive income (FVOCI) or fair value

through profit or loss (FVTPL) based on the company’s

business model for managing the financial asset and the

cash flow characteristics of the financial asset.

Financial assets are classified as follows:

• • Financial assets to be measured subsequently at fair

value (either through other comprehensive income

(OCI) or through profit or loss)

• • Financial assets to be measured at amortised cost.

Financial assets are not reclassified unless the company

changes its business model. In rare circumstances where

the company does change its business model,

reclassifications are done prospectively from the date that

the company changes its business model.

Financial liabilities are classified and measured at

amortised cost except for those derivative liabilities and

contingent consideration that are measured at FVTPL.

Measurement on initial recognition

All financial assets and financial liabilities are initially

measured at fair value, including transaction costs, except

for those classified as FVTPL which are initially measured

at fair value excluding transaction costs. Transaction costs

directly attributable to the acquisition of financial assets or

financial liabilities at FVTPL are recognised immediately in

profit or loss.

Subsequent measurement: financial assets

Subsequent to initial recognition, financial assets are

measured as described below:

• • FVTPL – these financial assets are subsequently

measured at fair value and changes therein (including

any interest or dividend income) are recognised in

profit or loss

• • Amortised cost – these financial assets are

subsequently measured at amortised cost using the

effective interest method, less impairment losses.

Interest income, foreign exchange gains and losses

and impairments are recognised in profit or loss. Any

gain or loss on derecognition is recognised in profit

orloss

• • Equity instruments at FVOCI – these financial assets

are subsequently measured at fair value. Dividends

are recognised in profit or loss when the right to

receive payment is established. Other net gains and

losses are recognised in OCI. On derecognition,

gains and losses accumulated in OCI are not

reclassified to profit or loss.

Subsequent measurement: Financial liabilities

All financial liabilities are subsequently measured at

amortised cost using the effective interest method.

190 Bytes Technology Group plc

PARENT COMPANY FINANCIAL STATEMENTS

Derecognition

Financial assets are derecognised when the rights to

receive cash flows from the assets have expired or have

been transferred and the company has transferred

substantially all risks and rewards of ownership. Financial

liabilities are derecognised when the obligations specified

in the contracts are discharged, cancelled or expire. On

derecognition of a financial asset or liability, any

difference between the carrying amount extinguished and

the consideration paid is recognised in profit or loss.

Impairment

The company assesses on a forward-looking basis the

expected credit losses associated with its debt

instruments carried at amortised cost. The impairment

methodology applied depends on whether there has been

a significant increase in credit risk.

1.14 Trade and other payables

Trade payables, sundry creditors and accrued expenses

are obligations to pay for goods or services that have been

acquired in the ordinary course of business from

suppliers. They are accounted for in accordance with the

accounting policy for financial liabilities as included

above. Other payables are stated at their nominal values.

1.15 Borrowings

Borrowings are initially recognised at fair value, net of

transaction costs incurred. Borrowings are subsequently

measured at amortised cost. Any difference between the

proceeds (net of transaction costs) and the redemption

amount is recognised in profit or loss over the period of

the borrowings using the effective interest method. Fees

paid on the establishment of loan facilities are recognised

as transaction costs of the loan to the extent that it is

probable that some or all of the facility will be drawn down.

In this case, the fee is deferred until the drawdown occurs.

To the extent that there is no evidence that it is probable

that some or all of the facility will be drawn down, the fee is

capitalised as a prepayment for liquidity services and

amortised over the period of the facility to which it relates.

1.16 Employee benefits

Short-term obligations

Liabilities for wages and salaries, including non-monetary

benefits, annual leave and accumulating sick leave, that

are expected to be settled wholly within 12 months after

the end of the period in which the employees render the

related service are recognised in respect of employees’

services up to the end of the reporting period and are

measured at the amounts expected to be paid when the

liabilities are settled. The liabilities are presented as

current employee benefit obligations in the balance sheet.

Post-employment obligations

The company operates various defined contribution plans

for its employees. Once the contributions have been paid,

the company has no further payment obligations. The

contributions are recognised as employee benefit

expense when they are due. Prepaid contributions are

recognised as an asset to the extent that a cash refund or

a reduction in the future payments is available.

Share-based payments

Equity-settled share-based payment schemes

Share-based compensation benefits are provided to

particular employees of the Group through the Bytes

Technology Group plc share option plans.

Employee options

The fair values of options granted under the Bytes

Technology Group plc share option plans are recognised

as employee benefit expenses in the entities of the Group

in which the employees are contracted and providing their

services. The total amount to be expensed is determined

by reference to the fair value of the options granted. The

total expense is recognised over the vesting period, which

is the period over which all the specified vesting

conditions are to be satisfied. At the end of each period,

the Group revises its estimates of the number of options

issued that are expected to vest based on the service

conditions. It recognises the impact of the revision to

original estimates, if any, in profit or loss, with a

corresponding adjustment to equity.

The company has a recharge arrangement with its

subsidiaries whereby the company recharges the amount

equal to the share-based payment charge to its

subsidiaries according to the vesting schedule.

The share-based payment reserve comprises the fair

value of share awards granted which are not yet exercised.

The amount will be reversed to retained earnings as and

when the related awards vest and are exercised by

employees.

1.17 Share capital

Ordinary shares are classified as equity. Incremental

costs directly attributable to the issue of ordinary shares

are recognised as a deduction from equity, net of any

taxeffects.

1.18 Dividends

Dividends paid on ordinary shares are classified as equity

and are recognised as distributions in equity.

1.19 Rounding of amounts

All amounts disclosed in the consolidated financial

statements and notes have been rounded off to the

nearest thousand, unless otherwise stated.

Annual Report and Accounts 2024

25 191

FINANCIAL STATEMENTS

2 Directors’ remuneration

Remuneration of directors:

Year ended

28 February

2025

£’000

Year ended

29 February

2024

£’000

Directors’ remuneration

1,967 1,387

Social security costs 263 168

Pension costs 31 17

2,261 1,572

1 Directors’ remuneration

The amounts comprise fees paid to the non-executive directors and, for executive directors, salary and benefits earned for the period. Further information on directors’

remuneration is provided in the directors’ remuneration report on pages 112 to 130.

3 Employee costs and numbers

Employee benefit expense:

Year ended

28 February

2025

£’000

Year ended

29 February

2024

£’000

Employee remuneration 912 774

Social security costs 109 96

Pension costs 28 25

1,049 895

The average monthly number of employees during the period was:

Year ended

28 February

2025

Number

Year ended

29 February

2024

Number

Administration 8 6

8 6

4 Income tax expense

The major components of the company’s income tax expense are:

Year ended

28 February

2025

£’000

Year ended

29 February

2024

£’000

Current income tax charge in the year 606 157

Adjustment in respect of current income tax of previous years (7) –

Total current income tax charge 599 157

Deferred tax credit in the year (186) (113)

Adjustments in respect of prior year 7 (1)

Effect of changes in tax rates – (2)

Deferred tax credit (179) (116)

Total tax charge 420 41

Notes to the financial statements continued

192 Bytes Technology Group plc

PARENT COMPANY FINANCIAL STATEMENTS

Reconciliation of total tax charge

The tax assessed for the period differs from the standard rate of corporation tax in the UK applied to profit before tax:

Year ended

28 February

2025

£’000

Year ended

29 February

2024

£’000

Profit before income tax 50,497 39,822

Income tax charge at the standard rate of corporation tax in the UK of 25% (2024: 24.49%)

12,624 9,752

Effects of:

Non-deductible expenses 46 (34)

Non-taxable income (12,250) (9,674)

Adjustments to previous periods – (1)

Effect of change in rate – (2)

Income tax charge reported in profit or loss 420 41

1 Prorated rate for change in the tax rate from 19% to 25% on 1 April 2023.

Deferred tax assets

As at

28 February

2025

£’000

As at

29 February

2024

£’000

The balance comprises temporary differences attributable to:

Property, plant and equipment (14) (30)

Provisions – 8

Share-based payments 334 163

320 141

Deferred tax assets

As at

28 February

2025

£’000

As at

29 February

2024

£’000

At 1 March 141 25

Credited to profit or loss 179 116

Carrying amount at end of year 320 141

5 Investment in subsidiaries

As at

28 February

2025

£’000

As at

29 February

2024

£’000

Balance at 1 March 2023, 29 February 2024 and 28 February 2025 641,998 641,998

Subsidiary undertakings

A detailed listing of the company’s direct and indirect subsidiaries is set out in note 29 in the notes to the financial information

in the consolidated financial statements of the Group.

Recoverable amount of investment in subsidiaries

The recoverable amount is estimated to be the recoverable amounts of the two principal operating subsidiaries disclosed in

note 11 to the notes to the consolidated financial statements of the Group. This note also discloses the assumptions used in

estimating the recoverable amounts and sensitivities performed. The Group considered that no reasonably possible change

in assumptions will result in an impairment.

Annual Report and Accounts 2024

25 193

FINANCIAL STATEMENTS

6 Property, plant and equipment

Computer

software

£’000

Total

£’000

Cost

At 1 March 2023, 29 February 2024 and 28 February 2025 198 198

Depreciation

At 1 March 2023 11 11

Charge for the year 66 66

At 29 February 2024 77 77

Charge for the year 66 66

At 28 February 2024 143 143

Net book value

At 29 February 2024 121 121

At 28 February 2025 55 55

7 Trade and other receivables

As at

28 February

2025

£’000

As at

29 February

2024

£’000

Amounts due from other Group companies – 12,612

Prepayments 255 272

255 12,884

8 Trade and other payables

As at

28 February

2025

£’000

As at

29 February

2024

£’000

Trade and other payables 1,933 2,040

Amounts due to other Group companies

173 5,820

2,106 7, 8 6 0

1 Amounts due to other Group companies are unsecured, interest free and repayable on demand.

9 Borrowings

On 17 May 2023 the Group entered into a new three-year committed Revolving Credit Facility (RCF) for £30 million, including

an optional one-year extension to 17 May 2027, and a non-committed £20 million accordion to increase the availability of

funding should it be required for future activity. The new facility incurred an arrangement fee of £0.1 million, being 0.4% of the

new funds available. Neither the company, nor any of its subsidiaries, has drawn down any amount on either the previous or

the new facility and to the extent that there is no evidence that it is probable that some or all of the facility will be drawn down,

the fee has been capitalised as a prepayment and amortised over the three-year period of the facility. The facility also incurs

a commitment fee and utilisation fee, both of which are payable quarterly in arrears. For further details on the RCF, see note

23(c) in the notes to the consolidated financial statements of the Group.

Notes to the financial statements continued

194 Bytes Technology Group plc

PARENT COMPANY FINANCIAL STATEMENTS

10 Share capital and share premium

Ordinary shares

Authorised, allotted, called up and fully paid

Number of

Nominal

value

£’000

premium

£’000

Total

£’000

At 1 March 2023 239,482,333 2,395 633,636 636,031

Shares issued during the period 874,565 9 14 23

At and 29 February 2024 240,356,898 2,404 633,650 636,054

Shares issued during the period 711, 3 67 7 2,782 2,789

At 28 February 2025 241,068,265 2,411 636,432 638,843

1 Ordinary shares

Ordinary shares have a nominal value of £0.01. All ordinary shares in issue rank pari passu and carry the same voting rights and entitlement to receive dividends and other

distributions declared or paid by the company. The company does not have a limited amount of authorised share capital.

11 Information included in the notes to the consolidated financial statements

Some of the information included in the notes to the consolidated financial statements is directly relevant to the financial

statements of the company. Please refer to the following:

Note 6 – Auditors’ remuneration

Note 24(b) – Dividends

Note 26(a) – Transactions with key management personnel

Note 27 – Share-based payments

Note 30 – Events after the reporting period

Annual Report and Accounts 2024

25 195

FINANCIAL STATEMENTS

Other information

197 Glossary

199 Company information

199 Financial calendar

How are AI solutions helping transform

the way organisations operate?

We’re turning AI hype into real-world

impact for our customers by

identifying practical use cases,

integrating tailored solutions, and

ensuring ethical, secure adoption

that drives efficiency, innovation

andlong-term value.

Richard Brown

Practice Lead – AI/PP

Bytes Technology Group plc196

Glossary

Admission: the admission of BTG’s shares to the premium

listing segment of the Official List and to trading on the London

Stock Exchange’s Main Market and on the Main Board of the

Johannesburg Stock Exchange via secondary inward listing

AI: artificial intelligence

Altron Limited: a public company incorporated and registered

in accordance with South African law, with registration number

1947/024583/06

AOP: adjusted operating profit

Bytes: Bytes Software Services Limited, a private limited

company incorporated under English and Welsh law, with

registered number 01616977

CAGR: compound annual growth rate

Carbon removal credits: higher-quality carbon credit

forinvestments in projects that permanently remove carbon

from the atmosphere

CDP: formerly the Carbon Disclosure Project, a not-for-profit charity

that runs the global disclosure system for investors, companies,

cities, states and regions to manage their environmental impacts

Cloud or cloud computing: shared, remotely accessible

ITsolutions

Company or BTG: Bytes Technology Group plc, a public

limited company incorporated under English and Welsh law,

with registration number 12935776

CSP: the Microsoft Cloud Solutions Provider programme

CPO: Chief People Officer

CSOP: Company Share Option Plan

CTO: Chief Technology Officer

DBP: Deferred Bonus Plan

disintermediation: direct vendor sales to end customers

EA: Microsoft enterprise agreement

eNPS: employee net promoter score

EPS: earnings per share

ESG: environmental, social and governance

EV: electric vehicle

ExCo: executive committee of

Executive directors: the executive directors of the company,

being Sam Mudd and Andrew Holden

Existing customers: customers with which the Group has

previously transacted

FCA: Financial Conduct Authority

FRC: Financial Reporting Council

GenAI: generative artificial intelligence

GHG: greenhouse gas

GII: gross invoiced income

GP: gross profit

Group: Bytes Technology Group plc, Bytes Software Services

Limited, Phoenix Software Limited and any other subsidiary of

the company from time to time

HMRC: His Majesty’s Revenue and Customs

HVAC: heating, ventilation and air-conditioning

IPO: initial public offering

JSE: as the context requires, either JSE Limited (registration

number 2005/022939/06), a limited liability public company

incorporated in accordance with South African law and licensed

as an exchange under the South African Financial Markets Act,

No. 19 of 2012 (and amendments thereto), or the securities

exchange operated by the aforementioned company

License Dashboard: License Dashboard Limited, a private

limited company incorporated under English and Welsh law,

with registration number 06599902

London Stock Exchange: London Stock Exchange plc

LTI: Long Term Incentives

Main Market: the London Stock Exchange’s main market

forlisted securities

MD: Managing Director

Net zero: our working definition of net zero aligns with the

SBTi’s science-based Net-Zero Standard, which is to reduce

ouremissions by 90–95% and use carbon removal credits to

neutralise emissions that we cannot remove

Non-executive directors: the non-executive directors

ofthecompany, being Patrick De Smedt, Erika Schraner,

ShruthiChindalur, Ross Paterson and Anna Vikström Persson

NPS: net promoter score

Official List: the Official List of the FCA

operating companies: Bytes Software Services Limited,

Phoenix Software Limited

Phoenix: Phoenix Software Limited, a private limited company

incorporated under English and Welsh law, with registration

number 02548628

PSP: Performance Share Plan

RCF: revolving credit facility

REGO: Renewable Energy Guarantees of Origin

SAYE: Save As You Earn (ShareSave – employee share scheme)

SBTi: Science Based Targets initiative

SDGs: Sustainable Development Goals

SECR: Streamlined Energy and Carbon Reporting

Shareholders: the holders of shares in the capital

ofthecompany

Annual Report and Accounts 2024

25 197

Glossary continued

TCFD: Task Force on Climate-related Financial Disclosures

TSR: total shareholder return

UK Corporate Governance Code or code: the UK

CorporateGovernance Code published by the FRC in July 2018,

as amended in 2024

UK Listing Rules: the listing rules of the FCA made under

Section74(4) of the Financial Services and Markets Act 2000,

asamended

UN Sustainable Development Goals: the 2030 Agenda

forSustainable Development, adopted by all United Nations

Member States in 2015, consists of 17 SDGs. It recognises that

ending poverty and other deprivations must go hand in hand

with strategies that improve health and education, reduce

inequality and spur economic growth – all while addressing

climate change and working to preserve oceans and forests

United Kingdom or UK: the United Kingdom of Great Britain

and Northern Ireland

VAR: value-added reseller

VAT: value-added tax

vendor: a company that produces software or hardware or

supplies services

198 Bytes Technology Group plc

OTHER INFORMATION

Financial calendar Endnotes

Company information

Bytes Technology Group plc

A public limited company

incorporatedin England & Wales

underthe Companies Act 2006

withregistered number 12935776

Registered Office

Bytes House

Randalls Way

Leatherhead

Surrey

KT22 7TW

Group Company Secretary

WK Groenewald

+44 (0)1372 418992

wk.groenewald@bytesplc.com

Bytes House

Randalls Way

Leatherhead

Surrey

KT22 7TW

Investor relations

James Zaremba

+44 (0)1372 418500

IR@bytesplc.com

Bytes House

Randalls Way

Leatherhead

Surrey

KT22 7TW

Financial calendar

13 May 2025

Release of results for the financial

year ended 28 February 2025

2 July 2025 14:00 (BST)

Annual General Meeting

October 2025

Interim results

1 gartner.com/en/newsroom/press-releases/2025-01-21-gartner-forecasts-

worldwide-it-spending-to-grow-9-point-8-percent-in-2025

2 gartner.com/en/newsroom/press-releases/2024-11-07-gartner-forecasts--it-

sending-in-europe-to-grow-9-percent-in-2025

3 statista.com/outlook/tmo/software/united-kingdom

4 statista.com/outlook/tmo/it-services/united-kingdom

5 statista.com/outlook/tmo/public-cloud/united-kingdom

6 statista.com/outlook/tmo/cybersecurity/united-kingdom

7 qbeeurope.com/news-and-events/press-releases/annual-global-cyber-attacks-

double-from-2020-to-2024-qbe

8 checkpoint.com/press-releases/check-point-softwares-2025-security-report-finds-

alarming-44-increase-in-cyber-attacks-amid-maturing-cyber-threat-ecosystem

Public relations

Sodali & Co

Elly Williamson

Jane Glover

Maria Zander

+44 (0)20 7250 1446

btg@info.sodali.com

The Leadenhall Building

122 Leadenhall Street

London

EC3V 4AB

Joint brokers

Deutsche Numis

Numis Securities Limited

45 Gresham Street

London

EC2V 7BF

Peel Hunt LLP

100 Liverpool Street

London

EC2M 2AT

JSE sponsor

Investec Bank Limited

100 Grayston Drive

Sandton

Johannesburg

2196

South Africa

Legal advisors

Travers Smith LLP

10 Snow Hill

London

EC1A 2AL

Independent auditor

Ernst & Young LLP

1 More London Place

London

SE1 2AF

Registrar (UK)

Computershare Investor Services

The Pavilions

Bridgwater Road

Bristol

BS99 6ZZ

Transfer secretaries (SA)

Computershare Investor Services

Rosebank Towers

15 Biermann Avenue

Rosebank

2196

South Africa

Annual Report and Accounts 2024

25 199

Printed sustainably in the UK by

Pureprint, aCarbon Neutral company

with FSC

Chainofcustody and an

ISO14001-certified environmental

management system recycling over

100% of all dry waste.

Edited, designed and produced

byFalconWindsor.

falconwindsor.com

Bytes House

Randalls Way

Leatherhead

Surrey

KT22 7TW

Find out more

onour website

and connect