Annual Report and Accounts 2025/26

opportunities

innovation

Unlocking

through

Our year in numbersContents

£2,341.0m

Gross invoiced income (GII)

(2025: £2,099.8m) +11.5%

£220.5m

Revenue

(2025: 217.1m) +1.6%

£167.3m

Gross profit (GP)

(2025: £163.3m) +2.4%

£28,300

Average gross profit per customer

(2025: £27,600) +2.5%

£62.7m

Operating profit

(2025: £66.4m) -5.6%

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.

Strategic report

Our business

02 This is Bytes Technology Group

04 Chair’s statement

06 CEO’s review

փ Our strategy

փ Investment case

10 Measuring progress –

keyperformanceindicators

12 Our strategy in action

Review of the year

16 Our market environment

18 CFO’s introduction

փ Our business model

21 Operational review

26 Financial review

32 Risk report

44 Sustainability review

փ Our people

փ Our communities

փ Our planet

Disclosure statements

58 Task Force on Climate-related Financial

Disclosures (TCFD)

68 Additional environmental disclosures

74 Non-financial and sustainability

informationstatement

75 Viability statement

76 Section 172 statement

Governance report

78 Chair’s introduction to corporategovernance

80 Board of directors

83 Executive Committee

84 The Board’s year

88 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

129 Directors’ report

133 Statement of directors’ responsibilities

Financial statements

135 Independent auditor’s report

145 Consolidated financial statements

149 Notes to the consolidated financialstatements

182 Parent company financialstatements

184 Notes to the financial statements

Other information

193 Glossary

195 Company information

195 Financial calendar

Technology creates opportunities

toenhance human creativity,

productivity and communication,

reach new markets, serve people

better and keep organisations

anddata safe.

We help 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, AI,

cloud-based solutions and hybrid infrastructure.

We serve nearly 6,000 customers in the private

and public sectors.

STRATEGIC REPORT

1Annual Report and Accounts 2025

This is Bytes Technology Group

Serving the IT market in the

UKformore than40 years

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have nine offices and more than 1,300

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 we are evolving

with our customers on page 21.

Our future: innovating to unlock

opportunities for our customers

With technology changing so fast, it’s easy

tolose sight of what IT is really for: freeing up

people’s time, keeping data and networks

safe,and enabling better collaboration 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 will reap those benefits in the years

and decades to come.

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.

View Bytes Software Services vendors

View Phoenix Software vendors

Annual Report and Accounts 2025

STRATEGIC REPORT

Chair’s statement

BTG this year accelerated

thetransition to becoming a

partner that takes a broader

role in helping customers use

technology to drive business

outcomes, such as identifying

use cases for AI adoption,

deploying new workloads into

the cloud and managing our

customers’ cybersecurity

environments.

Patrick De Smedt Chair

The IT market is changing fast,

energised by new software

companies, innovative products and

disruptive technologies, including

AI. Our responsibility at BTG is to

stay ahead of these changes, and

organise our business in a way that

best serves the needs of our loyal

customers and delivers sustainable

growth over the long term.

Investing for sustainable growth

Despite a challenging market environment during the

year, BTG delivered growth in gross invoiced income

of11.5% to £2.3 billion. While this growth did not

fullyconvert to profit expansion at the levels seen

inprevious years, gross profit increased modestly,

reflecting two key factors. First, changes to Microsoft

enterprise incentive structures, particularly evident

inthe first half of the year, coincided with elevated

renewal activity around the public sector financial

year end in March and April and Microsoft’s own

year end in June. Second, the Group continued to

evolve its private sector sales division from a generalist

model to specialist, customer-segment-focused

teams, as described on page 7. Although this transition

took longer than initially anticipated, it represents an

important step in strengthening BTG’s long-term

capability to support our customers. Operating

profitwas therefore lower than in previous years, as

theGroup continued to make disciplined investments

to support future growth.

The business has now adapted to these changes.

Indeed, adaptation was a key theme for BTG in

2025/26, as we focused on proactively evolving

ourbusiness approach and investing for the future.

Formost of our history, we have been known for

reselling software licences and providing software

asset management. Under the leadership of Sam

Mudd, and with the Board’s support, BTG this year

accelerated the transition to becoming a partner

thattakes a broader role in helping customers use

technology to drive business outcomes, such as

identifying use cases forAI adoption, deploying new

workloads into the cloudand managing our customers’

cybersecurity environments.

Investing in technical capabilities and providing more

managed services will enable us to better respond

towhat our customers are asking for, as they look

tofurther transition their data to the cloud, protect

themselves against security breaches and make their

businesses more efficient. Working with our vendor

partners to deliver more services will also help us sell

more software, so we can further invest in our business

and reward our shareholders.

4 Bytes Technology Group plc

OUR BUSINESS

Strong leadership in a year

oftransformation

As our business continues to adjust to our ever-changing

sector, Sam has led from the front, including explaining

how and why we are evolving, to our people, to our

customer and vendor partners, and to investors and

analysts. Our operational leaders have also guided

their businesses in a year in which both Bytes and

Phoenix adapted to the most recent changes in

Microsoft’s incentive programmes.

As announced, following an assessment of the

rolesrequired to support the Company’s next

phaseofgrowth, it has been decided to split the

currently combined roles of Chief Financial Officer

andChief Operating Officer, held by Andrew Holden.

As part of this change, Andrew will be standing down

asChief Financial Officer when a suitable replacement

has been appointed, at which date he will step down

from the Board. Thereafter, he will remain with the

Company and will transition into the role of Chief

Operating Officer.

Turning to the Board more widely, following the positive

changes in 2024/25, I believe that we currently have

the right mix of knowledge, skills and experience.

Ourrecent board effectiveness review, conducted

externally by Lintstock, also concluded that the Board

continues to be strong and cohesive. I am grateful for

all the support that the directors have given the

business this year.

Maintaining our high-performance culture

On behalf of the Board, I also want to thank all our

people across the business for their hard work. Without

their dedication and commitment we would not be able

to provide the great service that keeps our customers

coming back to us, year after year.

Making sure we maintain our customer-centric and

innovation-focused culture is always a strong priority

for the Board, which is why listening to employees is

soimportant to us. This year, we again held town

hallmeetings at both businesses’ head offices, in

Leatherhead and York, where we talked about the

company’s strategic priorities, and then took questions.

Several directors, including Anna Vikström Persson,

DrErika Schraner and Ross Paterson, also made

additional office visits, while Shruthi Chindalur, our

designated non-executive director for employee

engagement, spent time engaging with people at

bothbusinesses.

Among the feedback we got was that staff would like

more leadership training, especially for people newly

promoted to management. Sam is addressing this,

withthe help of Kally Kang-Kersey, our Chief People

Officer, who is leading the development of BTG’s

long-term people strategy.

Continued focus on sustainability

As the business keeps growing, the Board

remainsconscious of the company’s sustainability

responsibilities. This was the first full year of our ESG

(Environmental, Social and Governance) Committee,

which is chaired by Anna, whose role is tooversee the

delivery of the overall sustainability strategy, including

the transition to net zero. Along withcontinued efforts

to reduce our emissions, our sustainability progress

this year included expanding our carbon literacy

awareness programme and becoming a constituent

ofthe FTSE4Good Index Series.

Looking ahead with confidence

The spirit of agility and adaptability that BTG has shown

this year positions us well to continue to benefit from

the structural demand drivers in the market, from cloud

migration to security and AI. The Board looks forward

to supporting our executive team through another year

of progress.

Patrick De Smedt

Chair

11 May 2026

Shareholder dividend

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 7.0 pence per share

equating to £16.5 million. If approved by

shareholders, the final dividend will be

paidtowards the end of July 2026.

I also want to thank everyone

across the business for their

hardwork, dedication and

commitment.

Annual Report and Accounts 2025

STRATEGIC REPORT

CEO’s review

This year I have spent time

engaging with colleagues

across the business, and

have been inspired by their

passion and professionalism

in serving our customers.

Sam Mudd CEO

To succeed in changing markets,

businesses need to constantly

evolve. In 2025/26, I was proud of

theway our teams supported our

many loyal customers bydelivering

great service, while also adjusting

toour ongoing internal evolution

andexternal market changes.

As we focused on evolving our business for continued

growth, realigning our private sector sales team, we

managed the impact of reduced enterprise incentives

from our largest vendor partner, Microsoft. We also

focused on growing our services portfolio and

associated profits and maintaining measured

investments, in line with our strategy. While this

resulted in another year of double-digit gross invoiced

income growth, we however saw modest gross profit

growth and a decline in operating profit.

With organisations continuing to invest in IT solutions,

we maintained our share of wallet among our existing

customers and increased our customer base. As in

prior years, customer retention remained very high at

both Bytes and Phoenix, providing a good foundation

for future growth. And we achieved numerous notable

successes in the public and private sectors. You can

read more about some of our success stories on

pages12 and 14.

Increasing our customer centricity

Customers partner with us – and often stay with us for

many years – because of the broad range of software

solutions we provide, from multi-cloud adoption and

migration to digital storage, cybersecurity and AI. This

is underpinned by our software advisory expertise and

knowledge of procurement routes, which enable us

tohelp our customers obtain the best value. We

continued to build on this strength this year by investing

in pre-sales and technical skills that will allow us to

serve a bigger market in future.

We also evolved our overall approach to meeting our

clients’ needs by expanding our range of in-house

services. Our customers want to benefit from the latest

transformational technology, as we’ve seen from the

strong interest in AI products we provide, including

Microsoft Copilot. We translate complex partner

Watch Sam’s recent conversation

with Microsoft about AI

6 Bytes Technology Group plc

OUR BUSINESS

technology into business outcomes by working

upfrontin the design and implementation and staying

responsible beyond the ‘go-live’ through managed

services. The skills to manage new technology are in

short supply, so organisations are becoming ever-more

reliant on their IT partners. As this service income

stream grows, we will continue to develop and deliver

additional services across our vendor offerings to

support customer readiness and adoption.

In 2025/26 we improved our customer proposition by

realigning our private sector sales team. One of our key

differentiators as a value-added reseller has always

been our customer-centricity: how we engage closely

with our clients to be a trusted partner. Now we have

gone a step further to better understand our private

sector customers’ businesses and provide them with

the right solutions for their needs. At the start of the

financial year, we moved from a generalist private

sector sales structure to having three segment-

focused teams, based on customer size. By ensuring

we have the right people, in the right roles, managing

the right accounts, we have deepened expertise within

each segment.

This shift to sales specialisation is already enabling us

to provide better insights and more relevant solutions

to customers, and aligns us more closely with our

vendor partners, whose own sales teams are often

segmented by customer size. It also allows us to

recruitand train our people in a more targeted way.

This realignment saw an adjustment period for

twomain reasons: very strong trading ahead of

thechange at the end of last year, and relationship

changes. The private sector sales team had a very

strong end to financial year 2024/25 as account

managers worked hard to close the pipeline they

hadbuilt in accounts they were handing over. This had

atemporary adverse impact at the start of 2025/26,

given account managers had to hand over some

relationships and establish pipelines in their

newaccounts.

As the change has bedded in though, we have already

seen tangible results. For example, in the enterprise

sales segment – for customers with more than 10,000

employees – the average deal size increased threefold

during the year, driven by a strong growth in services.

Our public sector sales team structures, which are

aligned by government sector, are unchanged.

Our strategy

We aim to grow organically by winning

new customers and doing more for

existing customers. We complement

this approach, as appropriate, with

carefully selected acquisitions that

increase our value.

Along with consistently expanding

oursolutions and services

capabilities and broadening 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 help our customers on page12.

Investing in our people and our business

Our people drive our success: to sell effectively and meet our

growth ambitions we need to retain our exceptional employees

and keep attracting new talented people.

Read more about how we develop great people on page 13.

Investing in innovation

From cybersecurity to AI, 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 invest in innovative services

onpage 14.

Annual Report and Accounts 2025

STRATEGIC REPORT

CEO’s review continued

Investment case

Proven track record and growth strategy

We have a long track record of robust financial performance

and long-term growth, driven by highly motivated employees

delivering the latest technology solutions and services to a

diverse and loyal customer base.

Five-year GP CAGR 13.3%

Customers served in 2025/26 5,916

High return on capital and cash-generative asset-light model

Our business model of selling software solutions is asset lightand

supports consistently high returns on capital and cash conversion.

Five-year cash conversion 113%

£205 million returned to shareholders

over the past five years

Attractive market positioning

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

software vendors and distribution channels, including our long

and deeply embedded relationship with Microsoft.

More than 1,000 vendors and distributors

One of the largest 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 AI-enabled tools. Our share of our total

addressable market is 3%, so we have plenty of room to grow.

Strong GII growth 11.5%

Strong team culture

Our dynamic culture drives our operational excellence and high

employee retention rates, and increases sales productivity,

customer satisfaction and repeat business.

Employee net promoter score (eNPS) 62

Deepening our vendor relationships

Our credibility in the market comes in part from

workingclosely with the world’s leading software

vendors. In addition to our strong partnership with

Microsoft, we have deepened our relationships

withother key vendors this year by boosting our

technical capabilities, so that we can do more

pre-sales, consultancy and services work based

ontheir technology.

This investment is reflected in the many competitive

awards we have won this year from vendors, including

Axonius, Barracuda, Check Point, Sophos and Varonis.

We also achieved the highest-tier Pinnacle Partner

status from VMware by Broadcom, a significant

achievement. As part of our growth strategy, we aim to

broaden our share of non-Microsoft work. In 2025/26,

we delivered important customer wins in the private

and public sectors, based on solutions from vendors

that we have been working more closely with in recent

years, including Flexera, Druva, Varonis, Rapid7,

Check Point, Cisco, VMware and Zscaler.

Building an even greater place to work

These customer and vendor successes don’t happen

overnight; rather they reflect many months and even

years of hard work by our teams. This year I have

spenttime engaging with colleagues across the

business, and have been inspired by their passion

andprofessionalism in serving our customers. I am

proud of how our people have pulled together and

demonstrated their own resilience at a time of

significant economic uncertainty.

Our Great Place to Work survey results continue to

beimpressive and in the Financial Times’ UK’s Best

Employers ranking we were placed the highest in our

industry and 14thoverall. We are not complacent though,

and are determined to become an even greater place

for talented people to build long and fulfilling careers.

To help make that happen, we hired a chief people

officer this year. Kally Kang-Kersey has now met

withhundreds of employees in several of our offices,

gaining a good sense of what drives our culture, and

how to make it even stronger. Kally is leading our

people strategy, which focuses on attracting top talent,

developing our leaders, evolving our culture, and

modernising and aligning our policies consistently

across our two operations, to make sure that

everybody is treated fairly.

8 Bytes Technology Group plc

OUR BUSINESS

The changes we made this year have set us up strongly for the

futureand I’m excited to continue working with my leadership

teamto evolve our business, bringing our people, customers

andvendors along with us on that journey.

Promoting digital inclusion in

ourcommunities

Along with serving our customers, our people also do

great work in our communities through volunteering

and charitable giving. This year I’ve asked our teams

atboth businesses to prioritise activities where we can

make the most difference through our expertise. We

will therefore focus more strongly on digital inclusion,

including by delivering cyber awareness, digital skills

and technology education to disadvantaged and

underserved groups. The importance and potential

impact of this approach was reinforced for me when

Itook part in a forum at the House of Lords in January

2026, where a group of senior business leaders came

together to shape the direction and intent of the CEO

Steering Council. The group was set up to support

delivery of the government’s ‘opportunity mission’,

which aims to break the link between a child’s

background and their future success.

The road ahead

Turning to the future: while I am mindful of the

pressures created by the ongoing economic

uncertainty, I know our customers will keep looking to

transformative technology to boost their efficiency,

safety and competitiveness. And, as has been the case

for more than four decades, we will be there for them.

The changes we made this year have set us up strongly

for the future and I’m excited to continue working with

my leadership team to evolve our business, bringing

our people, customers and vendors along with us on

that journey.

Sam Mudd

Chief Executive Officer

11 May 2026

Annual Report and Accounts 2025

STRATEGIC REPORT

Measuring progress

Financial

Gross invoiced income

£2,341.0m +11.5% Revenue

2, 3

£220.5m +1.6%

2026 £2,341.0m

2025 £2,099.8m

2024 £1,823.0m

2023 £1,439.3m

2022 £1,208.1m

2021 £958.1m

2026 £220.5m

2025 £217.1m

2024 £207.0m

2023 £184.4m

2022 £145.8m

2 0 21 £ 3 9 3 .6 m

Gross profit £167.3 m +2.4% Gross margin

75.8%

2026 £167.3 m

2025 £163.3m

2024 £145.8m

2023 £129.6m

2022 £107.4m

2 0 21 £ 8 9.6 m

2026 75.8%

2025 75.2%

2024 70.4%

2023 70.3%

2022 73.7%

2 0 21 2 2 . 8 %

Operating profit £62.7m -5.6% Operating profit as % of gross profit 37.5%

2026 £62.7m

2025 £66.4m

2024 £56.7m

2023 £50.9m

2022 £42.2m

2021 £26.8m

2026 37.5%

2025 40.7%

2024 38.9%

2023 39.3%

2022 39.3%

2021 29.9%

Cash conversion

10 5.1% Cash £98.6m -12.8%

202 6 10 5.1%

2025 113.8%

2024 116.4%

2023 93.4%

2022 144.7%

2 0 21 18 2 . 9 %

2026 £98.6m

2025 £113.1m

2024 £88.8m

2023 £73.0m

2022 £67.1m

2 0 21

£ 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.

10 Bytes Technology Group plc

OUR BUSINESS

Strategic

Customer numbers 5,916 + 0.1% Renewal rate 99%

2026 5,916

2025 5,913

2024

5,828

2023 5,941

2022 5,330

2 0 21 5,14 7

2026 99%

2025 109%

2024 109%

2023 116%

202 2 111%

2 0 21 10 7 %

Average gross profit per customer £28,300 +2.5% Customer net promoter score 70+

2026 £28,300

2025 £27,600

2024

£25,000

2023 £21,800

2022 £20,100

2021 £17,400

2026 70+

2025 79

2024 82

2023 77

2022 64

2 0 21 6 3

% gross profit from existing customers 97%

2026 97%

2025 97%

2024 97%

2023 96%

2022 93%

2 0 21 9 5 %

Sustainability

Employee numbers 1,331 +6.9% Employee net promoter score 62

2026 1,331

2025 1,245

2024 1,057

2023 930

2022 773

2 0 21 6 85

2026 62

2025 57

2024 71

2023 70

2022 69

2 0 21 6 9

As 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.

Annual Report and Accounts 2025

STRATEGIC REPORT

Our strategy in action

Putting customers first

Bytes + National Express

Phoenix + West Yorkshire Fire and Rescue Service

At BTG we build trusted partnerships with organisations of all types and sizes to help

them get the most out of the transformational technologies shaping the world.

National Express is the UK’s largest coach operator, running

high-frequency scheduled services to hundreds of destinations

across the UK and transporting millions of passengers every

year. To do this it relies on internal and customer-facing digital

platforms to support ticketing and operations, as well as

business-to-consumer and business-to-business revenue

channels. While its legacy infrastructure supported daily

operations, it focused on cost-effectiveness, reliability and

adaptability. In early 2025, National Express partnered with

Bytes to move from an on-premises VMware environment to

acloud-based infrastructure on Amazon Web Services (AWS).

This complex project involved the migration of around 700

servers to AWS, in a series of 25 waves to minimise service

disruption to customers and business operations. National

Express then transitioned into a fully managed AWS platform

service delivered by Bytes. The new, modern infrastructure

hasprovided National Express with greater agility and flexibility

in its technology systems, while reducing running costs and

unlocking future-ready applications and AI to drive further

efficiency and momentum.

What made the project successful was

partnership, trust, and transparency. Bytes

operated as an extension of our team and

broughtdeep AWS capability and joint leadership.

Paul Challis

Chief Information Officer

National Express

West Yorkshire Fire and Rescue Service provides critical

services to more than two million people. Operating from 40 fire

stations across five districts, the firefighters respond to a variety

of emergencies, from fires to road, rail and air crashes, floods

and water rescues, and chemical incidents. But the fire service

felt like it was being held back by its systems and processes,

with administrative tasks proving to be time-consuming and

inefficient. Working with Phoenix, the fire service embarked

onan ambitious, multi-year digital transformation programme

tomodernise its systems, while also supporting people with

accessibility needs. This programme included migrating many

ofthe legacy systems and process flows on to the Microsoft

Power Platform. Phoenix then designed and implemented a

Microsoft Copilot solution featuring the latest AI capabilities.

The benefits were immediate, including significant time savings

and improved accessibility – staff with dyslexia, for example,

can now communicate more effectively and confidently by

usingCopilot in their writing.

We’ve had people say they were

spending fourweeks generating

a report – now it takes justa fewhours.

Kirsty James

Digital Transformation Manager

West Yorkshire Fire and Rescue Service

Read the fullcase study

National Express photo © Michael Molloy Photographer

12 Bytes Technology Group plc

OUR BUSINESS

Investing in people and our business

Myda Carolan – Account Manager, Bytes

Lewis Thomson – AI Workforce Lead, Phoenix

We are proud to build the future of IT by giving people with a passion for technology

theopportunity to develop their skills with us and advance their careers.

Myda, 25, joined Bytes in August 2024. As an account manager, she works

across several areas, including cloud, cybersecurity, AI and modern

workplace solutions, helping organisations adopt technology in a secure

and a practical way. For Myda, IT is more than her job: it’s her passion.

Shesays that she has always been fascinated by how technology can

solveproblems and improve people’s lives and work. Outside the office

shespends a lot of time learning about areas like AI, data and systems

integration, which helps her stay informed of new developments and bring

fresh ideas to her customers. In 2025, Myda’s work was recognised at

the Manchester Young Talent awards, where she was awarded Tech

Professional of the Year.

My focus now is to continue deepening my expertise

inareas like cloud and AI. Bytes is a great environment

tolearn, collaborate and work alongside incredibly

knowledgeable people who encourage your

developmentand give you opportunities to grow.

Lewis, 29, joined Phoenix six years ago. In October 2025, he received

the prestigious Microsoft Most Valuable Professional (MVP) award,

making him the second Phoenix employee to achieve the honour. The

award is given to IT professionals ‘who go above and beyond in sharing

their technical expertise’. Lewis’s path to MVP status has been shaped by

adeep commitment to helping organisations unlock the full potential of

AI-powered productivity tools, in particular Copilot. Alongside guiding

customers through adoption, governance and real-world implementation,

Lewis has run tailored workshops, delivered insights on responsible AI use

and supported customers outside his day-to-day work. He says he was

‘thrilled’ and ‘shocked’ to receive the award, which he thought would be

out of his reach, especially early in his career.

What I’m really passionate about and enjoy is helping

translate what people need into technical solutions.

That’sthe part that often gets lost in translation when

deploying any technology, and I think it’s key to success.

Annual Report and Accounts 2025

STRATEGIC REPORT

Our strategy in action continued

Investing in innovation

Bytes + Farrer & Co LLP

Phoenix + Blaby District Council

We invest in innovative support services to help our customers stay ahead

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

Farrer & Co LLP, founded in 1701 and headquartered in London, is one of

theUK’s most respected law firms, providing legal expertise across private

wealth, corporate services, financial institutions, education and the not-for-

profit sector. The firm, which has more than 630 technology users, required

apartner to provide round-the-clock coverage, proactive governance,

fast-track escalation to Microsoft and assurance of minimal downtime.

TheBytes Microsoft Support Services model ticked all those boxes.

Bytes’s commitment to providing robust, SLA-backed

technical assistance has greatly enhanced our IT

infrastructure and security posture. The 24x7 coverage and

proactive governance have ensured our operations run

smoothly. We have complete confidence in Bytes’s ability

to deliver mission-critical support, and their partnership

has been invaluable to our continued success.

Paul Lovegrove

Head of IT Systems

Farrer & Co LLP

Blaby District Council, in Leicestershire, delivers vital public services to

itscommunity, from planning applications to housing services and bin

collections. With around 400 employees and a lean information and

communication technology (ICT) team, the council depends on secure,

reliable systems to protect sensitive data and maintain service continuity.

As the council built its new ICT environment, it became clear that

outsourcing security operations to a trusted partner was essential.

Blabyneeded a solution that could provide continuous monitoring and

rapid response without overburdening its ICT team. The Phoenix Protect

active response managed service was the ideal fit.

Our regular meetings with Phoenix are incredibly

collaborative. Our primary contact keeps us informed on

current risks, reviews alerts and outlines the ongoing work

needed to keep us protected. It’s a proactive partnership

that gives us confidence in our security posture.

James Hickens

ICT Operations Manager

Blaby District Council

Read the fullcase study

14 Bytes Technology Group plc

OUR BUSINESS

Review of the year

16 Our market environment

18 CFO’s introduction

փ Our business model

21 Operational review

26 Financial review

32 Risk report

44 Sustainability review

փ Our people

փ Our communities

փ Our planet

Bringing people and transformational

technologies together to achieve more.

Annual Report and Accounts 2025

STRATEGIC REPORT

Our market environment

We operate in an attractive business segment, with an

ever-growing addressable market that is currently worth

morethan £80 billion. In 2025/26, IT spending in the UK

wasrobust, which is forecast to continue.

Despite geopolitical and macroeconomic uncertainty, private and public sector organisations

continued to invest in technology to enhance their efficiency, security and productivity.

Cybersecurity services and AI tools attracted particularly strong interest.

The trends shaping UK technology

Cloud migration

Switching from on-site applications to third-party hosted

software offers more flexibility, scope for analytics and

sustainable credentials.

Security

The prevalence and sophistication of cyberattacks is

increasing, making multilayered security and data

protectionessential.

AI and data

The fast-growing range of AI-enabled tools is attracting

stronginterest.

Digitalisation

Digital technology is helping organisations improve their

operations and create efficiencies.

Cost optimisation

Amid vendor price rises and economic pressures, customers

want greater value from their IT solutions and services.

$ 6.15 t n

Forecast worldwide

IT spending in 2026

11.1%

Forecast annual growth in IT

spendinginEurope in 2026

32%

Forecast increase in

AI-related investment among

UKorganisations in 2026

129%

Increase in ‘nationally significant’

cyberattacks in the UK in 2025

Robust growth forecast in worldwide IT spending

Technology spending globally is forecast to grow by 10.8% in

2026, to $6.15 trillion, according to Gartner, the business and

technology insights company.

This is slightly higher than the

10.3% growth seen in 2025. In Europe, IT spending is expected

to grow by 11.1%, to $1.4 trillion. ‘AI, cloud and cybersecurity are

driving the rise in IT spending for European organisations in

2026’, Gartner reported.

Cybersecurity drives growth in the UK

Software resale and IT services delivery are our two main

business areas. They remain the two biggest areas of technology

spend, and among the fastest growing. In 2026, spending on

software and IT services in Europe is expected to grow by 15.6%

and 10.1% respectively, according to Gartner.

Spending on

cybersecurity is also expected to grow strongly, with more than

half of UK organisations planning to increase their cybersecurity

budgets by more than 10%, according to the KPMG Global Tech

Report 2026.

1, 2, 3, 4, 5, 6 For all sources and references, see endnotes on page 195.

16 Bytes Technology Group plc

REVIEW OF THE YEAR

The evolving threat of cyberattacks on UK

businesses is reflected in the growing

focus on security. In its annual review

published in October 2025, the National

Cyber Security Centre (NCSC) reported

handling a record 204 ‘nationally

significant’ cyberattacks in the year to

August 2025, up from 89 in the previous

12 months.

Of a total of 429 incidents

handled by the NCSC, 18 were

categorised as ‘highly significant’,

meaning that they had the potential to

have a serious impact on essential

services. In its Cyber Security Report

2026, Check Point reported that AI was

increasing the threat of attack, enabling

bad actors to ‘move faster, scale more

easily and operate across multiple attack

surfaces simultaneously’.

Investment and interest

inAIsurges

Interest in AI continues to grow in the private

and public sectors, with organisations

seeking to improve service delivery,

efficiency and innovation. The release of

commercial AI tools, including Microsoft’s

Copilot, has already spurred spending on

IT services related to AI. In its IT spending

forecast for Europe in 2026, Gartner said

that chief information officers will invest

heavily in software to access new AI

features from their current providers.

In the UK, organisations are ready for

widespread AI adoption, according to

Red Hat, the open source solution

provider, which surveyed 100 IT

managers and directors in the UK in 2025.

It found that, along with security, AI is the

top IT priority for UK organisations, which

plan to boost investment in AI by an

average of 32% in 2026.

Within AI, the

biggest priority area for organisations is

now agentic AI, which refers to systems

that operate with a high degree of

autonomy and can perform complex

taskswith limited human intervention.

As a leader in AI implementation,

we’reconfident that this fast-evolving

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. Our

strong partnership with Microsoft, with

itsAI-enabled tools, platforms and

infrastructure, is integral to our goal of

helping organisations make AI adoption

successful and, importantly, to drive

customer value. The Red Hat survey

revealed that 89% of organisations say

they are not yet delivering customer value

from their AI investments.

Focus on value and flexibility

The essential role of technology in today’s

world, and the speed of change, means

that organisations are reluctant to pause

IT spending, even in the uncertain

economic times that we are living in.

Butthey want more value and flexibility,

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 reduce the need to

hire in-house experts. This all plays to our

strengths, since we take pride in providing

what customers need, rather than what

might deliver us profits in the short term.

Cybersecurity is now a matter of business survival

and national resilience… The best way to defend

against attacks is for organisations to make

themselves as hard a target as possible.

Dr Richard Horne

Chief Executive

National Cyber Security Centre

Our target segments

Software 66% of revenue

We sell a broad range of software

products from leading vendors, mainly

purchased as subscription licences and

increasingly hosted in the cloud.

IT services 20% of revenue

These include IT-managed services

around a wide range of vendor

technologies, including 24x7 support

forcritical cloud and security offerings,

software asset management and

project-orientated consulting services

including IT deployment assistance,

cloud migrations and software cost

optimisation, and AI projects.

Hardware 14% of revenue

We sell a wide range of hardware,

including desktops, monitors,

mobilephones, servers and

networkingequipment.

Our place in the

UK’sITsector

As one of the UK’s leading value-added

resellers (VARs), we provide IT products

from a wide range of technology

vendors to a large and diversified

baseof private and public sector

organisations. Our potential market is

large, since UK business-to-business

customers buy the majority of their

technology products from VARs and

other resellers and distributors.

Currently, our share of our total

addressable market is around 3%. And

because no one company dominates the

market, we have a lot of room to grow.

Annual Report and Accounts 2025

STRATEGIC REPORT

CFO’s introduction

Over time, we can sell our

clients additional products

provided by our many world-

class vendor partners, as well

as our in-house services to

help them to get the most out

of the latest technology. That

is the big opportunity for us.

Andrew Holden CFO

Our performance this year was

delivered within a challenging

business environment, which

included adapting to significant

changes in Microsoft’s vendor

incentive programme. This was

against the backdrop of heightened

political and economic uncertainty

across the world, withnew leaders

taking office, cross-border conflicts

persisting and trade wars starting.

Across our two operating companies, Bytes and

Phoenix, we managed the impact of these challenges,

building momentum through the year with a stronger

second half. This meant our overall gross invoiced

income grew by 11.5% to £2.3 billion and gross profit

increased by 2.5% to £167.3 million, with the lower

gross profit growth affected by the Microsoft incentive

changes. Revenue (calculated after applying the

agency adjustment to gross invoiced income) is

moreclosely aligned to gross profit with growth of

1.6%to £220.5 million. Our operating profit, however,

decreased by 5.6% to £62.7 million as we navigated

the Microsoft changes, attended to the slower-than-

anticipated bedding in of the sales restructure,

andincreased our cost base in line with continued

investment in our staff and new systems. With this, the

Group revised down its expectation of operating profit

during the year, reflecting the combined impact of these

circumstances. Nevertheless we again ended the year

with strong cash conversion above our target of 100%.

Responding to changes in the industry

As a value-added IT reseller, we have benefited from

tailwinds in our industry for a long time. Microsoft has

been a catalyst for our growth, while the introduction

ofthe public cloud and AI tools, along with the need for

stronger cybersecurity, has also worked in our favour.

These structural demand drivers still exist, and drove

customer spending this year, but their benefits were

countered by other external factors.

The global economic uncertainty in 2025/26 did not

directly affect our business, but it did have an impact on

many of our customers who, as a result, took longer to

make decisions on how to spend their IT budgets. The

vendor incentive programme changes, which provide

the rebates that we receive when selling products, and

which contribute to our gross profit, hada significant

impact during the year because ofMicrosoft’s reduction

of certain transactional enterprise agreement (EA)

incentives from 1 January 2025. The aim was to

encourage reseller partners, like us, to transition

theircustomers to the Cloud Solution Provider (CSP)

programme, which offers higher margins. While we had

success on this front for our private sector customers,

18 Bytes Technology Group plc

REVIEW OF THE YEAR

in the public sector the CSP programme is not

applicable for most customers, so despite Microsoft

applying a smaller EA rate reduction in these cases,

the impact was still harder tomitigate.

We have a good track record of adapting to Microsoft’s

incentive programmes, and had prepared for these

changes by realigning our software and service

offerings. But we did not deliver as well as we had hoped

on our mitigation plans, which included increasing our

cybersecurity sales. Additionally, in the first half of the

year, our private sector segment took a few months to

adjust to our realigned sales structure. Going forward,

I’m confident that the lessons we have learned this

year, along with our ever-expanding pool of world-class

vendors and our products and services, will enable us

to absorb changes to individual incentive programmes.

Continued momentum in our

servicesproposition

For the full year, our gross profit from software licence

sales declined slightly by 0.5% to £145.2 million and

contributed 87% of our total gross profit. Hardware and

external services gross profit increased from small

bases by 0.4% to £4.7 million and 22.9% to £4.8 million

respectively.

Meanwhile, gross profit from internal services rose

by45.3% to £12.6 million, contributing 8% of our total

gross profit. This is up from 5.3% in 2024/25 and aligns

with our goal of providing our customers with more

expert support through in-house services, especially

inthe areas of cybersecurity, AI and cloud computing,

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

Turning to our different customer segments, public sector

gross profit grew by 7.4% this year and private sector

gross profit declined by 0.3%. Our overall gross profit

mix for the year was 62% for private sector and 38% for

the public sector, compared to 64% and 36% in the

prior year.

To support the transition to becoming a services-

enabled business, and to make sure we maintain our

service levels as we grow, we continued to invest in

ameasured way in our sales teams, service delivery

staff, vendor and technology specialists and technical

support personnel. Over the year our headcount

grewby 6.9% to 1,331. Alongside this recruitment,

wemaintained our longstanding policy of developing

and promoting people from within the company. This

approach is key to our success in retaining employees

and supporting customer and vendor relationships.

Cost management is always a strong priority, and we

use our operating profit to gross profit ratio to measure

operational effectiveness. This year we achieved a

ratio of 37.5%, down slightly from 40.7% in the prior

year because we made strategic staff and IT

investments while absorbing the impact of the

Microsoft incentive changes.

Our business model

Our simple business model 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.

Our people are passionate about technology and our customers.

Many of them 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 leading

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

partners by revenue – and work closely with them to understand

the latest technologies.

We serve customers across the private 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 trusted partnership 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 for their needs. We know

whichproducts work together and we make them easy to buy.

Our ever-growing suite of our own professional and managed

services enables 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 ways:

• • ‘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 a rebate from the vendor

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

vendor pays us for managing the relationship and providing

licensing advice and support.

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

profit – an 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 2025

STRATEGIC REPORT

CFO’s introduction continued

Well positioned to benefit from market

opportunities

With a strong balance sheet and no debt, we remain

well positioned to continue to grow our business.

Ourshare of our total addressable technology

market,of around £82 billion, is still small at 3%,

andthe opportunities to benefit from this demand

inour sector are vast.

Microsoft solutions remain the core of our business

andour longstanding partnership is stronger than ever.

For many of our customers and prospective customers,

Microsoft products represent their biggest technology

spend, and being a trusted Microsoft partner gives us

credibility and a foot in the door. Over time we can sell our

clients additional products provided by our many other

world-class vendor partners, as well as our in-house

services to help them to get the most out of the latest

technology. That remains the big opportunity for us.

Our diversified and loyal customer base is another

keyasset. Over the year we worked with nearly 6,000

customers, including many with long relationships with

us and high levels of repeat business. I’m pleased that

our customer retention was again high in 2025/26, with

97% of our gross profit coming from customers that we

also traded with in the prior financial year, at a renewal

rate of 99%.

Looking ahead

In 2026/27, we will continue to closely monitor the

macroeconomic environment to assess the effect

onour business. Our priority is sustainable growth:

winning customers and doing more for them each year,

with a particular focus on services as well as selling

more software from non-Microsoft vendors.

We expect high single-digit to low double-digit

percentage growth in gross profit in 2026/27, with

operating profit broadly flat, as the Group absorbs

around £4.5 million of cost normalisation. This reflects

higher technology costs, following the completion of

strategic projects, and a return to normal bonus levels. It

also reflects our continued investment in people to build

the right skill sets and maintain the high-performing

culture that has made us successful, so that we can

keep providing the best service to our customers.

Andrew Holden

Chief Financial Officer

11 May 2026

Returning capital to our shareholders

Our capital allocation policy prioritises enhancing

business growth, both organically and through

select acquisition opportunities as they arise, and

by returning excess capital to shareholders where

appropriate. We do this through dividends and, at

times, through share buybacks. After considering

our strong balance sheet position and prevailing

share price this year, we announced a £25 million

share repurchase programme on 15 August 2025.

The buyback programme was completed before

the end of the calendar year.

20 Bytes Technology Group plc

REVIEW OF THE YEAR

Operational review

BTG is made up of two complementary businesses that share the same values

and customer-focused culture. In 2025/26, Bytes and Phoenix served more

customers than ever, grew their headcounts, technical capabilities and vendor

partnerships, and expanded their range of services.

Continued demand for

transformational technology

As in recent years, these six key areas

drove our growth:

• • Security – as the risk of

cyberattacksincreases, so does

theneed to strengthen defences

through advanced products and

managed security services

• • Cloud-based solutions –

organisations continue to invest

strongly in the latest cloud-based

technologies to be more cost-

efficient, agile and innovative

• • Subscription software – software

contracts provide us with predictable

annuity-based revenue streams

• • IT services – as technology

continues to evolve, demand is

growing for expert support across

arange of solutions, including

security, cost optimisation and

licencecompliance

• • AI – we see continued strong

interestin thelatest products,

including Microsoft Copilot

• • Hybrid infrastructure – by combining

the control and security of on-site

data centres with the flexibility

ofcloud solutions, organisations can

better manage their IT ecosystems.

Strong focus on services as

thevendor market evolves

While Bytes is focused on private sector

customers and Phoenix on public sector

organisations, they work with many of the

same world-leading software vendors,

including Microsoft, our biggest vendor

partner. In January 2025, Microsoft

amended certain of its partner incentive

schemes, reflecting a continued shift

among vendors to increase the rewards

available to partners for services-led

activities. (Read more in our CFO

reviewon page 18.)

Where this resulted in a reduction in the

fees and rebates we earn when selling

their products, we were able to partly

mitigate the effect of these changes in

2025/26 with greater focus on delivering

more professional and IT managed

services, which complement the solutions

we sell. This was already in line with our

strategy of expanding our range of

services and increasing our technical

capabilities, but at a faster pace, as we

strive to help our customers get the most

out of the latest technology, in particular

cybersecurity, cloud and AI solutions.

Another advantage of providing services

is that they often deliver a steady stream

of income over annual or multi-year

contracts, which is more sustainable

andpredictable than one-off sales.

At Phoenix for example, we strongly

increased our revenue from managed

services, both related to Microsoft

technology and other vendors’ products,

such as Broadcom, Bitdefender and

Sophos. We also increased the vendor

accreditations held by our technical

consultants.

At Bytes too, we grew our professional

and managed services. We also strongly

grew our Microsoft CSP business, as we

continue our transition from being an IT

reseller to being a cloud and cybersecurity

solutions business. While our cybersecurity

growth was muted in a highly competitive

market this year, it remains a big

opportunity for us, and we’ve been

investing in our sales and technical

capabilities, and accreditations with

leading vendors such as Wiz. We also

realigned our private sector sales teams at

Bytes, from a generalist structure to teams

based on the size of the customer. This

allows us to have deeper relationships with

our clients, provide better service and

enhance vendor relationships.

I am exceedingly proud of what we have

achieved this year, with our services

reallytaking off. It goes back to the

building blocks we’ve been putting in

placeover the past five years or so.

Clare Metcalfe

MD Phoenix

Annual Report and Accounts 2025

STRATEGIC REPORT

Operational review continued

Key facts

Bytes Technology Group

HQ Leatherhead, Surrey

CEO Sam Mudd

CFO Andrew Holden

Bytes Software Services

Markets

Mostly private sector, across a broad range of industries,

including professional services, manufacturing, retail, and

technology, media and telecommunications.

Vendors

Our partners include Microsoft, AWS, Palo Alto, Check Point,

Mimecast, Adobe, Darktrace, SecurityHQ, Commvault,

ServiceNow, Wiz, Recorded Future, CrowdStrike, Zscaler

andGoogle

HQ Leatherhead, Surrey

Other offices Reading, London, Manchester,

Dublin,Portsmouth

Employees 795

Customers 3,085

Phoenix Software

Markets

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

central and local government, charities, education, emergency

services, healthcare and housing. Its own License Dashboard

offering has clients in North America and Europe.

Vendors

Our partners include Microsoft, AWS, VMware, Dell, Adobe,

Sophos, Citrix, Mimecast, Rubrik, ServiceNow, BeyondTrust,

Tanium and Zscaler

HQ Pocklington, Yorkshire

Other offices Salford, Sunderland

Employees 527

Customers 2,831

22 Bytes Technology Group plc

REVIEW OF THE YEAR

Innovating to help customers

andour people do more with AI

Advances in AI continue to gather pace.

We are using AI in our business in a

responsible manner, and taking the

lessons we have learned to help our

customers benefit from the technology.

Extensive preparation is key because, to

use AI effectively, organisations first need

to modernise their data, migrate it to the

cloud and put in the right security controls

– all areas where we have expertise. At

Bytes, alongside our Microsoft Azure and

AWS cloud and data offerings, we’ve been

doing more this year with Google Cloud

Platform, which is designed for developers,

and with AI, so we can give our customers

the right solutions for their needs.

At Phoenix, we delivered the highest

number of Microsoft Copilot workshops in

the UK this year and also became a partner

for Microsoft’s Frontier programme,

which gives customers early access to

thelatest AI innovations. We launched an

engineering innovation team this year to

see how we can streamline our ways of

working using the latest technology,

including AI. The team has already

created useful time-saving solutions,

including an automatic peer-checking

tool for parts of our customer contracts

prepared by our technical consultants.

Growing our teams while

maintaining our strong culture

As BTG grows, we need to keep

expanding our teams and increasing

ourskills so we can keep providing the

same high levels of service and stay up to

date with the latest technology. At Bytes,

our headcount increased by 4.6% to 795.

At Phoenix, we achieved the milestone

ofhiring our 500th employee and, at

year end, had 527 colleagues, up 10.5%.

New colleagues at both businesses

included the latest batch of sales and

technical apprentices, who continue to

bea great source of talent. We also hired

people with specialist skills where these

were needed, as well as providing training

for our existing employees to increase

their technical capabilities. Culture is

another crucial area for us. Though

weoperate a hybrid working policy,

wehave maintained our high levels of

engagement, and our attrition rates

remain in line with industry averages.

Leadership training was a key area

offocus and will continue to be in the

coming year. Read more on page 48.

Bytes and

Phoenix share:

• • BTG’s values, strategic ambitions

and governance structures

• • Insights and good practice

• • Industry-leading skills

• • Customer-focused culture

• • Representation and engagement

in Group Executive Committee

and steering committees

• • Comparable products and services

…but have their own:

• • Identities

• • Management teams

• • Individual but complementary

routes to market

• • Customer bases and markets

• • Offices.

Annual Report and Accounts 2025

STRATEGIC REPORT

Operational review continued

Why customers value us

We strive to help customers succeed

in a world of change, through trusted

partnerships and transformational

technology so they can be more

productive, save money, strengthen

their systems and secure their data.

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; they’re also experts

intheir customers, because we

give them the time to understand

each customer, and the

customer’s industry.

• • We provide continuity and a

friendly, innovative culture.

Ourrelatively high staff retention

rates mean our customers often

deal with the same account

manager and team, year after year.

We propose solutions to problems

and bring a positive attitude.

• • We are committed to

excellence and honesty.

Wealways seek 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

that benefit local communities.

Demonstrating resilience in 2025/26

Our deep customer relationships drive our success. We monitor our

progress using four key metrics: customers numbers, our share of their

business, gross profit per customer and our customer net promoter

score (NPS). This year we:

Increased our customer base

5,916

This year

5,913

Last year

We did business with numerous new customers this year, in both the

public and private sectors.

Maintained a high renewal rate

99%

This year

109%

Last year

This metric tracks the growth in gross profit from existing customers.

We did more business with established customers such as the

HomeOffice and the NHS.

Maintained industry-leading NPS

70+

This year

Last year

The score measures the likelihood of our customers recommending

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

Increased gross profit per customer

£28,300

This year

£ 2 7, 6 0 0

Last year

How our broad, diversified customer base benefits us

We aim to build lasting relationships with our customers but, in a

competitive marketplace, we try not to depend too much on individual

customers. In 2025/26, no single customer represented more than

1.0% of our gross profit.

24 Bytes Technology Group plc

REVIEW OF THE YEAR

Why vendors value us

Because we are an independent

reseller, we give impartial advice to

our customers. But at the same time,

wesee vendors as our partners,

andtogether we work very closely to

give our customers the best results.

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

recruit people who do.

• • We 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.

• • We 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.

• • We have a strong growth

record. Vendors know where

we’ve come from – and where

we’re going – and want to align

with that.

Our awards in 2025/26

Bytes

• • Microsoft Inner Circle Business Applications 2025

• • CRN Channel Awards Cloud Services Partner of the Year 2025

• • Sophos Enterprise Partner of the Year 2025

• • AWS Rising Star Consulting Partner of the Year 2025

• • Microsoft Finalist Partner of the Year – Azure Marketplace 2025

Phoenix

• • Barracuda’s Partner of the Year 2025 (UK)

• • Microsoft Azure Expert Managed Service Provider (MSP)

• • Transform Elite Plus Partner status with Rubrik

• • Microsoft Frontier Partner

• • VMware Expert Advantage Partner status for Consulting Services

• • Nutanix UKI Rising Star Partner of the Year 2025

Expanding our relationships with the leading

softwarevendors

We work closely with more than 100 leading technology companies

whomake or distribute the products that we provide to our customers.

Microsoft has always been our biggest and most important vendor, and

remained so this year. But every year we add new strategic vendors to our

portfolio of software and service offerings, especially in fast-changing

areas such as security and AI.

At Bytes in 2025/26, we grew our cybersecurity partnerships with

CheckPoint, Palo Alto, Recorded Future, Mimecast, CrowdStrike and Wiz.

At Phoenix, we deepened our relationships with ServiceNow, Zscaler and

BeyondTrust and, for cloud platforms, with AWS.

Annual Report and Accounts 2025

STRATEGIC REPORT

Financial review

Income statement

Year ended

28 February 2026

£m

Year ended

28 February 2025

£m

Change

Gross invoiced income (GII) 2,341.0 2,099.8 11.5

GII split by product:

Software 2,233.4 2,005.3 11.4

Hardware 31.2 33.2 (6.0)

Services internal

39.3 34.0 15.5

Services external

37.1 27.3 36.0

Netting adjustment (2,120.5) (1,882.7) 12.6

Revenue 220.5 217.1 1.6

Revenue split by product:

Software 145.2 146.0 (0.5)

Hardware 31.2 33.2 (6.0)

Services internal

39.3 34.0 15.5

Services external

4.8 3.9 23.0

Gross profit (GP) 16 7. 3 163.3 2.5

GP/GII% 7.1% 7.8%

Other income 0.6 0.1 495.2

Administrative expenses (105.2) (96.9) 8.5

Administrative expenses split:

Employee costs (82.0) (78 .1) 5.1

Other administrative expenses (23.2) (18.8) 22.7

Operating profit 62.7 66.4 (5.6)

Operating profit/GP% 37.5% 40.7%

Interest income 7.6 8.5 (10.7)

Finance costs (0.3) (0.3)

Share of loss of associate

(0.2) –

Profit before tax 69.8 74.6 (6.4)

Income tax expense (18.6) (19.8) (6.2)

Effective tax rate 26.6% 26.5%

Profit after tax 51.3 54.8 (6.5)

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 loss of associate.

How we performed in 2025/26

26 Bytes Technology Group plc

REVIEW OF THE YEAR

Overview of 2025/26 results

We delivered another year of double-digit GII growth, more

modest GP growth and a decline in operating profit, as we

maintained measured investments for future growth against the

slower GP growth. Cash generation remained strong, with 105%

cash conversion, enabling £74 million of returns to shareholders

while maintaining a strong balance sheet.

Gross invoiced income

GII reflects gross income billed to our customers and has a

direct influence on our movements in working capital. However,

it does not capture all the IT spend we help our customers

withbecause, in some cases, our vendor partners invoice the

customer directly and pay us a fee that is a percentage of their

sales value, and which we recognise within our GII, revenue

andGP.

GII has increased by 11.5% year on year, to £2,341.0 million

(2024/25: £2,099.8 million), driven by software and strong

growth in services. Growth was balanced across the public

sector (+12.4%) and the private sector (+9.7%), with our mix

remaining weighted to the public sector, which contributed

66%of total GII (2024/25: 65%). Private sector GII benefited

from the transition of more customers to Microsoft’s CSP

programme (where BTG invoices the customers) from

Microsoft’s EA programme (where Microsoft invoices the

customers and pays BTG a rebate).

Revenue

Revenue is reported in accordance with IFRS 15, with hardware

and internal services reported gross (principal) and software

and external services reported net (agent), which means

revenue reflects changes in the mix of business but is often

nota good indicator of underlying growth.

This reporting of revenue as a mix of GP and GII across the

fourincome streams has given rise to a 1.6% increase, with

growth in internal services (reported gross) and external

services (reported net) offsetting the reduction in software

(reported net) and hardware (reported gross). 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

£4.0 million, up 2.5% year on year to £167.3 million (2024/25:

£163.3 million), with growth improving in the second six months

to 4.6% (compared to 0.3% in the first half).

Breaking this down by income stream, starting with the

Group’stwo most strategic focus areas, software GP declined

by 0.5% to £145.2 million, with a 0.8% decline in its GP/GII%

to6.5%, while services GP is up by 38.4% to £17.4 million, with

GP/GII margin up benefiting from mix and cost efficiencies.

Wehave been supported in our services growth by increasing

levels of Microsoft funding, for both internal investments and

customer engagements. Hardware grew off a small base by

0.4% to £4.7 million.

Looking across our two main customer sectors, public sector

GP has grown by 7.4%, returning to double-digit growth in the

second half, and private sector GP has declined by 0.3%. Both

sectors were affected by the changes to Microsoft enterprise

agreement (EA) incentives, and the private sector had a

re-adjustment period relating to the private sector sales

realignment in the first half and faced a tough comparator in the

second half (+14.8% growth in private sector GP in the second

half of 2024/25).

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. This process is further enhanced by focusing on

selling our wide range of solutions offerings and higher-margin

security products, while maximising our vendor incentives

through achievement of technical certifications. We track these

customers individually to ensure that the strategy delivers value

for the business, and our other stakeholders, over the duration

of the contracts.

As in previous years, the higher margins available in the private

sector means that our GP remains weighted to the private sector,

which contributed 62% of total GP (2024/25: 65%) despite our

GII being weighted to the public sector. Our GP/GII margin

reduced to 7.1% (2024/25: 7.8%), affected by mix and the

Microsoft EA incentives changes. In the public sector, our margin

(GP/GII) dropped only slightly to 4.1% (2024/25: 4.3%), as strong

higher-margin services growth partly offset lower software

margins after the Microsoft EA incentives changes. In the private

sector, our margin (GP/GII) dropped to 13.0% (2024/25: 14.3%)

as more customers transitioned from Microsoft’s EA programme

(where Microsoft invoices the customers and pays BTG a rebate

at 100% GP/GII margin) to Microsoft’s CSP programme (where

BTG invoices the customers, pays Microsoft the cost of sale and

makes a net GP/GII margin).

Our long-standing relationships with our customers and high

levels of repeat business were again demonstrated in 2025/26,

with 97% of our GP coming from customers that we also traded

with last year (2024/25: 97%), at a renewal rate of 99%

(2024/25: 109%) – which measures the GP from existing

customers in this period compared to total GP in the prior

period. New customers contributed £5.1 million of GP in the year

(2024/25: £4.3 million). We saw customer numbers (defined as

those generating more than £100 of GP) broadly flat at 5,916

from 5,913, while the average GP per customer increased

slightly from £27,600 in 2024/25 to £28,300 in 2025/26.

Annual Report and Accounts 2025

STRATEGIC REPORT

Financial review continued

Other income

This comprises £0.6 million of rental income from the offices

acquired in 2024/25, which we have not fully occupied yet

(2024/25: £0.1 million).

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 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 new colleagues 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 1,331

on our February 2026 payroll, up by 7% from the year-end

position of 1,245 on 28 February 2025.

Employee costs, included in administrative expenses, rose by

5.1% to £82.0 million (2024/25: £78.1 million), with higher costs

from headcount, salary and national insurance contribution

increases partly mitigated by lower variable remuneration,

including a £4.2 million decline in share-based payments.

However, this figure has been affected by the capitalising of

£1.8 million of staff costs on to the balance sheet (2024/25:

£1.4 million). This relates to the salaries of employees who are

developing two 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, which can be found

onpage 159.

Other administrative expenses

Other administrative expenses increased by 22.7% to

£23.2 million (2024/25: £18.8 million). The main increases

comprised systems investment in staff welfare, travel and

entertainment, and insurance: we are investing in systems to

improve employee and customer experience; we continue to

encourage our teams to connect with customers and vendors

aswell as bringing together our hybrid workforce for company

events; and the heightened prevalence of cyberattacks is

increasing insurance premiums for technology suppliers.

As part of the IT platform development project, we have also

spent £2.7 million with a third-party development company to

supplement our own internal resources (2024/25: £2.3 million).

This engagement was taken wholly for this purpose and the

costhas been capitalised in full alongside our own salary costs,

adding a total of £4.1 million to intangible software assets during

the period (2024/25: £3.7 million).

Operating profit

Our operating profit decreased by 5.6% from £66.4 million

to£62.7 million, as employee and other administrative costs

increased against modest GP growth.

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. This decreased to 37.5% (2024/25:

40.7%). Including the capitalised staff costs, the ratio for this

period is 36.6% (2024/25: 39.8%).

28 Bytes Technology Group plc

REVIEW OF THE YEAR

Interest income and finance costs

This year has again seen significant interest being earned

frommoney-market deposits, reducing slightly to £7.6 million

(2024/25: £8.5 million) because of lower interest rates and lower

average cash balances reflecting the around £74 million paid to

shareholders during 2025/26.

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 in June and December

(around some key vendors’ fiscal year ends).

Our finance costs primarily comprise arrangement and

commitment fees associated with our revolving credit facility

(RCF), noting that to date the Group has not drawn down any

amount on the facility. Finance costs also include a small

amount of finance lease interest, including from our staff

electric vehicle (EV) scheme.

Share of loss 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 profit/loss. Our share of its loss

forthe year was £0.2 million (2024/25: £nil).

Profit before tax

The combined impact of decreased operating profits and lower

levels of interest income received has seen our profit before tax

decreasing by 6.5% to £69.8 million (2024/25: £74.7 million).

Income tax expense

Our effective tax rate was 26.6% (2024/25: 26.5%), which is

above the UK statutory rate of 25.0%, primarily because of a

reduction in the deferred tax asset value relating to outstanding

share options.

Profit after tax

Profit after tax decreased by 6.6% to £51.3 million (2024/25:

£54.8 million), with lower operating profit and interest income,

and a marginally higher effective tax rate.

Earnings per share

Basic earnings per share reduced 6.1% from 22.78 pence to

21.40 pence, and diluted earnings per share reduced 5.5% from

21.95 pence to 20.74 pence, reflecting the reduction in profit

after tax, partly offset by a lower average number of shares

resulting from the £25 million share repurchase programme

completed during 2025/26.

Annual Report and Accounts 2025

STRATEGIC REPORT

Financial review continued

Balance sheet and cash flow

Balance sheet

As at

28 February 2026

£m

As at

28 February 2025

£m

Property, plant and equipment 14.1 13.6

Intangible assets 46.5 43.5

Investment in associate 3.0 3.2

Other non-current assets 2.4 3.4

Non-current assets 66.0 63.7

Contract assets 8.0 10.0

Trade and other receivables 299.9 268.4

Other current assets 1.6 0.0

Cash 98.6 113.1

Current assets 4 0 8.1 391.5

Lease liabilities 1.1 1.3

Other non-current liabilities 4.7 2.0

Non-current liabilities 5.8 3.3

Trade and other payables 359.2 327.5

Contract and tax liabilities 27. 2 25.7

Lease liabilities 0.8 0.7

Current liabilities 3 8 7.2 353.9

Net assets 81.1 98.0

Share capital 2.4 2.4

Share premium 641.5 636.4

Share-based payment reserve 10.8 14.9

Merger reserve (644.4) (644.4)

Retained earnings 70.8 88.7

Total equity 81.1 98.0

Closing net assets stood at £81.1 million (28 February 2025:

£98.0 million), including the Group’s £3.0 million interest (25.1%)

in Cloud Bridge Technologies.

Intangible assets include £7.6 million of capitalised software

development costs, with £4.1 million capitalised in the year,

acombination of internal staff costs of £1.8 million and

£2.3 million of external contractor costs. We expect around

£0.9 million of amortisation on the asset in our next

financialyear.

Our debtor days at the end of the year stood at 38, and our

average debtor days for the year was 39 (2024/25: 38). Our

closing loss allowance provision reduced to £1.3 million, down

from £1.7 million at the February 2025 year end, with £0.7 million

bad debts written off in the year against the provision (2024/25:

£0.7 million).

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 48 (2024/25: 46) and standing at 43 at the end

of the year (2024/25: 36).

Operating with longer creditor days than debtor days results

inanegative working capital position for the business of

£79.8 million (measured as Trade and other receivables and

Contract assets less Trade and other payables and Contract

liabilities). We take this into account when determining the

appropriate amount of cash to hold on the balance sheet.

30 Bytes Technology Group plc

REVIEW OF THE YEAR

The consolidated cash flow is set out below:

Cash flow

Year ended

28 February

2026

£m

Year ended

28 February

2025

£m

Cash generated from operations 71.8 85.6

Payments for fixed assets (1.8) (6.4)

Payments for intangible assets (4.1) (3.7)

Free cash flow 65.9 75.5

Net interest received 7.3 8.3

Taxes paid (18.1) (18.9)

Lease payments (0.9) (0.6)

Dividends (48.6) (42.8)

Issue of share capital 5.1 2.8

Purchase of share capital (25.2) –

Net (decrease)/increase in cash (14.5) 24.3

Cash at the beginning of the period 113.1 88.8

Cash at the end of the period 98.6 113.1

Operating profit 62.7 66.4

Cash conversion

(againstoperating profit) 105.1% 113.8%

Cash at the end of the period was £98.6 million (28 February 2025:

£113.1 million), which is after the payment of dividends totalling

£48.6 million during the period – being the final and special

dividends for 2024/25 and the interim dividend for 2025/26 –

andthe share repurchase programme of £25.2 million (including

£0.2 million of costs).

Cash flow from operations after payments for fixed and intangible

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

£65.9 million (2024/25: £75.5 million). Consequently, the Group’s

cash conversion ratio for the year was 105.1% (2024/25: 113.8%).

We target our long-term sustainable cash conversion at

around100%.

The £5.1 million cash received from the issue of share capital

relates to participating staff exercising 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 above.

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. In May 2026 the Group

extended the facility by three years to 17 May 2029 for the same

value and under the same terms with an optional one-year

extension to 17 May 2030. To date, the Group has not used

thefacility.

Annual Report and Accounts 2025

STRATEGIC REPORT

Maintaining a robust approach to risk

The uncertain external environment this year reinforced

the importance of operating our business in a responsible

and controlled manner, closely monitoring the challenges

while remaining alert to opportunities.

Risk management is an ongoing process.

Throughout the year we carefully assessed

the risks to the Group and reviewed our

policies and procedures to manage them.

We are confident that our enterprise risk

management framework continues to

serve us well, providing a robust

approach to identify and manage risk.

Continuing the trend of recent years,

thegeopolitical and macroeconomic

environment was unsettled in 2025/26.

Russia continued its war in Ukraine and

conflict escalated in the Middle East.

TheUS imposed wide-ranging trade

tariffs, resulting in compromised trade

agreements, and adopted a more

adversarial foreign policy. In the UK,

therewas continuing uncertainty over

government policies. As a result of

allthese factors, businesses and

organisations took longer to make

spending decisions, including on IT.

We also saw more disruption from

cyberattacks in the UK this year across

multiple sectors, including several

well-known retailers. This was a reminder

that not all risks can be prevented, and

that we must be prepared to respond

immediately to unexpected events. At the

same time, cybersecurity represents an

opportunity for our business, being one of

the main areas of technology that we

support our customers with.

Given this unsettled environment this

year, we maintained our cautious

approach to risk at our annual risk

appetite meeting in January 2026.

Managing new and

emergingrisks

We assess current and emerging risks

aspart of our ongoing risk monitoring

process. Through our bottom-up

approach, our subsidiaries take

ownership of continually reviewing and

updating the risks that are considered

important to each business.

In our 2024/25 Annual Report we

identified 14 principal risks that could

have a significant impact on our

operations. This year, we combined two

of those risks – Changes to vendors’

commercial model and Margin pressure

– because of their overlapping impacts

and controls, meaning we now have

13principal risks. Aside from that, there

were no changes to any of the risks

themselves, with no additions or deletions

or reclassifications.

As in previous years, we changed the

status of the risk in some cases. The risk

associated with the new, combined

Commercial model and margin pressure

principal risk was assigned as ‘increase’

(Margin pressure on its own was ‘no

change’ last year, while Changes to

vendors’ commercial model was

‘increase’). The risk status reflects the

changes in vendors’ models and the need

for us to adapt. For the following three

risks we updated the status to ‘increase’:

• • Evolving competition, because of

theincreasing rate of change in

ourmarket

• • Emerging technology, because

ofrapid advances in technology

• • Supply chain management, in line

withthe additional regulatory burden.

This means that we deem ten of our 13

principal risks to have increased during

the year, up from seven in the previous

year, reflecting geopolitical, regulatory

and business landscape changes.

In our two previous Annual Reports we

identified three emerging risks: Climate

change, and its physical and transition

risks, Keeping pace with social change

and Impact of AI. We believe these

remained relevant in 2025/26 and

continued to monitor them closely.

Aswith cybersecurity, which is a risk

andan opportunity, AI presents an

opportunity for our business, because

wesupport our customers to get the

mostout of the technology, and deploy

itin our own business to enhance

productivity and creativity.

Looking ahead

This was our fourth year of working with

PwC as our internal audit partner. We

believe the partnership is delivering value

and we will again work together in the

coming year. The geopolitical and

macroeconomic environment is expected

to remain challenging in 2026/27.

Vigilance is paramount, so we will

continue to closely monitor the evolving

risk landscape and effectiveness of our

processes to manage it.

Andrew Holden

Chief Financial Officer

11 May 2026

32 Bytes Technology Group plc

REVIEW OF THE YEAR

Risk management

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 KPIs

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 forums on cybersecurity, information technology,

theenvironmentand business resilience

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managed 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

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 our principal risks. We carefully

evaluate the level of operational risk we

are prepared to take.

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.

Annual Report and Accounts 2025

STRATEGIC REPORT

Risk management continued

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, 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

Impact of AI – continued to be relevant

in2025/26. Our Board manages and

monitors these risks closely, with

oversight from the Audit Committee.

Climate change

The physical 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. The broader impact of the

effect of climate change globally could

also be a threat to operations within

theUK.

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 is

bysupporting our customers to use

technology in a sustainable way –

particularly by optimising their IT products

and services in the cloud. We also work

with our suppliers to make sure they are

considering sustainability effects when

developing products.

The Board’s ESG Committee provides

governance and oversight of climate

change and its related risks and

opportunities. This high-level governance

brings independent oversight to our

targets, progress and strategy. During

2025/26, we continued to develop our

strategy, review risks and ensure

transparency in reporting through CDP.

We were also accepted as a constituent

ofthe FTSE4Good index, and we remain

certified to the ISO 14001 environmental

management system across the business.

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 2025/26 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, the

attrition rate and insights from staff.

Our customer and talent pool might be

limited if we are not seen as a progressive

organisation. Younger people in particular

are looking to engage with companies

that do the right thing when it comes to

being a responsible part of society.

We have long identified that our staff

needmore than just fair pay: they need

opportunities to develop, to work flexibly

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, creating 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.

34 Bytes Technology Group plc

REVIEW OF THE YEAR

Impact of AI

In 2023/24, we identified a third emerging

risk: AI and the impact it might have on

our customers and their employees.

Wereviewed this again in January 2026.

Weconsider AI to be 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 roles

inthe workplace in the longer term. Within

the Group, there are policies, procedures

and a regular technical working group that

discusses AI. We will review feedback

from this working group through our risk

management process as the technology

develops and as its wider impact is 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, although

there are signs that there are fewer

entry-level positions in some industries.

However, if customers choose not to

recruit this could limit our growth as

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.

Our principal risks and uncertainties

In 2025/26, the geopolitical and macroeconomic environment was again unsettled,

but we managed risk well and have maintained our three emerging risks and our

principal risks. We have combined two of those principal risks – taking their number

from 14 to 13 – and updated the impacts and status of some of them, to show if we

expect their impact to ‘increase’, ‘decrease’ or show ‘no change’.

Although provision 29 of the UK Corporate Governance Code 2024 does not affect our

reporting until the 2026/27 financial year, we have analysed our principal risks and the

underlying controls for their materiality according to this provision. The Board will

review the material controls identified through this process in 2026/27 for their

effectiveness and report against them in the subsequent Annual Report.

Summary of changes since 2024/25

1 Economic disruption

Expanded the risk owners in the subsidiary businesses, alongside the CEO.

2 Commercial models and margin pressure

Combined the risks Margin pressure and Changes to vendors’ commercial model.

Defined the risk status as ‘increase’.

3 Inflation

Updated risk with latest figures.

4 Working capital

Updated commentary to include risks from foreign exchange.

5 Vendor concentration

Expanded the risk owners in the subsidiary businesses, and updated commentary.

6 Evolving competition

Changed name from Competition to Evolving competition. Changed status to ‘increase’.

7 Emerging technology

Changed name from Relevance and emerging technology to Emerging technology.

Changed status to ‘increase’.

8 Cyberthreats – direct and indirect

Updated commentary.

9 Business resilience

Changed name from Business continuity failure to Business resilience, to more

accurately reflect the broader scope of this risk. Expanded the risk owners in the

subsidiary businesses.

10 Attract and retain staff while keeping our culture

Changed risk owner from CEO to CPO and expanded the risk owners in the

subsidiary businesses. Changed some mitigation and controls.

11 Supply chain management

Changed status to ‘increase’. Added commentary around failure to prevent fraud

and EU supply chain regulations.

12 Sustainability/ESG

Made minor updates to commentary.

13 Regulatory and compliance

Added CFO as a risk owner, alongside the CEO. Updated the risk to reflect risk from

fines and added a control measure.

Annual Report and Accounts 2025

STRATEGIC REPORT

Our principal risks and uncertainties continued

Expectation of risk impact

Increase

No change

Decrease

Financial

1 Economic disruption

Risk owner CEO and executive committees of subsidiary companies

The risk

Internationally, political uncertainty with the US

administration continues, with rapid changes to global

tariffs, as well as conflicts in the Middle East and Ukraine.

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

reallocated, although the impact on us is still unknown.

How we manage it

We remained resilient through periods of geopolitical

uncertainty in 2025/26, as we did through previous

periodsof instability such as high inflation, global conflicts,

technology shortages 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.

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 partnering with their managed

services providers. This may create an opportunity to

accelerate our service offerings.

Financial stress-testing through our Going Concern

Assessment will be reviewed to provide reports back into

the two operating companies.

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

sector from any government funding reallocation 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 government controls

could compound. Lower demand could also arise from

reduced customer budgets, cautious spending patterns

orclients ‘making do’ with existing IT.

Economic disruption could also affect 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.

36 Bytes Technology Group plc

REVIEW OF THE YEAR

Financial

2 Commercial models and margin pressure

Risk owner CEO and executive committees 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.

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 the

commercial models are changed significantly.

How we manage it

There are external factors that influence our margins,

suchas economic and political factors, which are beyond

our control. Other factors, such as changing vendor

commercial models, are also mostly beyond our control,

but permit us to take action to bolster our resilience.

Our diverse portfolio of offerings, with a mix of vendors,

software and services, has enabled us to absorb any

changes to vendors’ commercial models – and we

continueto innovate to find new ways to deliver more

valuefor our customers.

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. We are confident in

ourability to maintain growth over time.

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.

Keeping the correct level of certification/accreditation 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.

Services delivered internally are consistently measured

against our competition to ensure we remain competitive

and maximise margins.

With our key vendors, we have regular touch points and

quarterly business reviews (QBRs), which ensure close

communication and timely updates of any changes with

ourvendor community.

The impact

Major changes to commercial models, which can occur

with limited notice, could put pressure on our margins and

profitability. In addition, any incentives received are very

valuable and contribute significantly to our operational profits.

3 Inflation

Risk owner CFO

The risk

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

(CPI), was 3.0% in February 2026, having started the financial

year at 2.6% and peaked in summer at 3.8%. This rate

continues to stay above the Bank of England’s target of 2%.

How we manage it

Staffing costs make up most of our overheads, so our

attention has been focused on our employees and their

ability to cope with the rising cost of living.

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 the market wage is increased to a higher level, then we

potentially have a risk for retaining and attracting

employees and customers.

Our customers will also have increased costs, which will

change their budgets and spending priorities.

Annual Report and Accounts 2025

STRATEGIC REPORT

Our principal risks and uncertainties continued

Financial

4 Working capital

Risk owner CFO

The risk

As customers face the challenges of inflation and elevated

interest rates in the current economic environment, there

isa greater risk of an increasing aged debt profile, with

customers slower to pay and the possibility of bad debts.

We have seen enterprise-sized businesses in particular

requesting longer payment terms.

Vendors’ changing payment terms could also have a

significant impact.

The implementation of the UK Government’s Procurement

Act 2023 will affect the payment terms of public sector

customers and affect our supply chain.

We have seen debtor days stabilise as inflation has

reduced, but the number of days has not returned to

historic low levels.

Volatility in foreign exchange rates could also have positive

or negative impacts.

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. This includes conducting a case-by-case

risk assessment for customer requests for longer

paymentterms.

In the past financial year, BTG has seen a level of write-offs

similar to the prior year, which is still not 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.

We believe the UK Procurement Act 2023 will reduce the

risk of extended or ambiguous payment cycles, which have

affected revenue recognition and working capital. The Act

extends through the supply chain, meaning that prime

contractors must pass on timely payments to subcontracted

software developers and service providers. BTG is required

to pass on 30-day payment terms to all subcontracted

goods and/or services suppliers when the Act applies,

providing greater consistency of payment terms.

We monitor and act on this risk through cost control and

efficiency measures such as gross profit per employee and

through operating profit metrics.

The impact

This could adversely affect our businesses’ profitability

and/or cash flow.

38 Bytes Technology Group plc

REVIEW OF THE YEAR

Strategic

5 Vendor concentration

Risk owner CEO and executive committees of subsidiary companies

The risk

Continued strategic focus on top vendors 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.

To ensure we maintain a diversified approach, we use peer

reviews and market intelligence through Gartner analyses

and Megabuyte reviews, as well as having regular

engagement with our vendors, including QBRs.

The impact

Relying too heavily on any one vendor could have an

adverse effect on our financial performance, should the

commercial relationship materially change.

Uptake of AI is expected to increase rapidly. While this

represents an opportunity, the development of AI by a

handful of companies, including Microsoft, has the

potential to further concentrate revenue and profit

acrossfewer vendors.

6 Evolving competition

Risk owner CEO

The risk

Competition in the UK IT market, and 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 direct vendor resale to end customers

(disintermediation) could place more pressure on the

market opportunity. Platforms, like marketplaces, with

direct sales to customers, could also be seen as

disintermediation.

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.

The rate of change in our competitive landscape has

beenincreasing.

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 has been identified as an emerging risk, and so will be

explored and monitored for 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.

We continue to monitor this changing environment,

including the speed and impact of change.

To measure the impact of competition, we use customer

and loyalty indicators such as NPS scores and feedback.

We use marketing and brand awareness measures to

assess our visibility and engagement with a broader

community.

The impact

This risk could have a material, adverse impact on our

business and profitability, potentially needing 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 resale to customers

could also increase. This could erode reseller margins,

given the purchase cost is less for the distributor than the

reseller. This could reduce our market, margin and profits.

Annual Report and Accounts 2025

STRATEGIC REPORT

Our principal risks and uncertainties continued

Strategic

7 Emerging technology

Risk owner CEO and executive committees of subsidiary companies

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 defend our position by keeping abreast of new

technologies and the innovators who develop them. We

dothis by joining industry forums and taking seats 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. This is in addition to strengthening

our internal capabilities with an innovation and engineering

team and by expanding and adapting our service offerings.

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.

Listening to our customers is integral to our approach,

ensuring we are aware of changing requirements. We are

giving more focus to customer communications and

marketing, to increase brand awareness. We measure the

impact of this through an annual customer NPS score.

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.

As with our Vendor concentration risk, our research

process includes peer reviews and market intelligence

through Gartner analyses and Megabuyte reviews, as well

as having regular engagement with our vendors, such as

through QBRs.

The impact

Customers have wide choice and vast 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

8 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. Recent high-profile ransomware

attacks at UK businesses, and geopolitical instability, has

heightened our focus on cybersecurity risk.

Risks arise from cyber crime, third-party risks associated

with cloud providers, insider threats (including accidental,

compromised insider and malicious intent) and risks

associated with data protection.

How we manage it

We use intelligence-driven analysis, including research by

our internal digital forensics team, 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, CE+ (cyber essentials) and

NHS DSPT certifications to protect our and our

customers’data.

Our Chief Information Security Officer (CISO) produces

quarterly reports for the two businesses, which are shared

with BTG’s Board and seniorleadership.

Our internal auditors periodically review the management

of risks associated with cyberthreats.

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.

This could also result in significant disruption to

ourbusiness.

40 Bytes Technology Group plc

REVIEW OF THE YEAR

Operational

9 Business resilience

Risk owner Executive committees of subsidiary companies

The risk

Any failure or disruption of BTG’s technology, information,

people or processes (TIPP) may negatively affect our ability

to deliver to our customers, cause reputational damage

and lose us market share.

How we manage it

The subsidiary companies have built and are improving

business continuity plans, which incorporate all elements

of TIPP that are significant to the operations of BTG.

Technology and information

Our CTOs and heads of IT manage and oversee our IT

infrastructure, network, systems and business

applications. This includes regular disaster recovery testing

and building resilience into systems with failovers and

backups. 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.

People and processes

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 mitigate any

single point of failure, and that resiliency is built into

employees’ skillsets.

The risk is also mitigated through policies and process

implementation such as Phoenix achieving ISO 22301

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.

Regular internal audits are conducted in TIPP areas that are

key to operations. Findings and actions are defined, time

bound and owned, leading to improvements and reducing risk.

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.

Annual Report and Accounts 2025

STRATEGIC REPORT

Our principal risks and uncertainties continued

Operational

10 Attract and retain staff while keeping our culture

Risk owner CPO and executive committees of subsidiary companies

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, including:

փ Salary and benefit expectations

փ BTG’s high rate of growth

փ Skills shortage in emerging, high-demand areas,

suchas AI and data

փ Fully remote/flexible working being expected

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 have conducted

talent reviews and identified pathways for promotion.

We’ve also organically grown and set up new geographical

offices, to attract local talent. In addition, we have

employed more recruiters directly in the business, which

has enabled quicker ad-to-hire times, as well as employees

that are a better cultural fit.

In July 2025, we appointed a CPO, who is engaged with

employees and working on strategies to maintain our

culture and improve staff welfare.

Maintaining our culture is important to retaining current

staff. BTG regularly engages with employees through

surveys, such as the employee Net Promoter Score (eNPS)

and Great Places to Work. Feedback from these and other

sources is used to review and develop our employee

benefits. We maintain our small company feel through

regular communications, clubs, charity events and social

events. We aim to absorb growth while keeping our culture.

To measure the impact of the risk and success of our

controls we use the eNPS score and feedback, attrition

rates and third-party feedback sites.

Although we are seeing the inherent risk increase, our

continued focus in this area means we have seen the

residual risk remain stable.

The impact

The double impact from 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 lose talented employees to competitors.

11 Supply chain management

Risk owner Executive committees of subsidiary companies

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, as is the risk from failure to

prevent fraud.

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 Code of Conduct. Any unethical, illegal or

corrupt behaviour that comes to light is escalated and

appropriate action is taken. Onboarding questionnaires

have been reviewed and improved.

Phoenix has a supply chain manager, and Bytes has a

third-party compliance officer focused on supply chain

management. Bytes has also established a cross-disciplinary

group to work on managing suppliers. With increasing

regulations in the EU, we have invested more in supplier

due diligence, with additional criteria for onboarding.

We have conducted an internal audit risk assessment to

identify controls to prevent fraud.

The impact

The impact to the business is across multiple streams from

legal, financial and reputational to ethical and environmental.

42 Bytes Technology Group plc

REVIEW OF THE YEAR

Operational

12 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 the 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. The Board also has an ESG

Committee, which provides oversight and input to our ESG

strategy and progress.

We make disclosures through several channels, including

ISS ESG ratings, CDP and EcoVadis. The Science Based

Targets initiative (SBTi) validated our near-term and net

zero targets as part of our programme to drive sustainability

through best practice approaches. We use feedback from

disclosures to guide changes in the business. As disclosure

methodologies stay current, so should the business, where

possible and relevant.

In 2025, failure to prevent fraud legislation came in.

Wehave reviewed the potential risk and enhanced our

controlsto ensure we are adequately protected to avoid

unintentional misinformation.

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.

Regulatory

13 Regulatory and compliance

Risk owner CEO and CFO

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 and work 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 also 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. Internal audits also help us identify any

actions we need to maintain or enhance compliance.

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 (for example,

GDPR and the Economic Crime and Corporate

Transparency Act 2023 (ECCTA)), 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.

Annual Report and Accounts 2025

STRATEGIC REPORT

Sustainability review

Being a responsible business is at the core of our culture and

ourstrategy of achieving sustainable growth over the long term.

Every day across the Group we strive to do the right thing by

ourpeople, our communities and our planet.

Every year we strive to advance our environmental agenda and

2025/26 was no exception. Progress included widening our targets

to include waste and water use, and agreeing the actions required

for us to get to net zero, which will form the basis of our net zero

transition plan, due to be published in 2026/27.

Lisa Prickett

Group Sustainability Manager

44 Bytes Technology Group plc

REVIEW OF THE YEAR

Since joining BTG this year, I’ve been struck

bythe exceptional talent across BTG and the

strength of the relationships our people build

withcustomers. Our people are our differentiator,

and I’m committed to shaping a people strategy

that supports our continued growth.

Kally Kang-Kersey

Chief People Officer

Our people

We aim to attract, engage and retain

talented people, supporting them to

develop their skills in a high-performing

and fun environment.

Ranked UK’s Best Employers 2026

by Financial Times and Statista

Our headcount

rose by 6.9% to

1,331

Read more on pages

52 to 56.

External recognition ofour progress

*Backed by Renewable Energy Guarantees of Origin (REGOs) and Renewable Gas Guarantees of Origin (RGGOs).

Annual Report and Accounts 2025

STRATEGIC REPORT

Sustainability review continued

Our people

BTG’s people drive our success, and we strive to help them build fulfilling and

rewarding careers in an inclusive, high-performance workplace where every

individual can thrive. In 2025/26, we grew our teams across the business to

serve our expanding customer base, improved our systems and processes

around hiring and career development, and appointed our first Chief People

Officer to lead the development of a long-term people strategy.

Two leading brands,

onestrong culture

Bytes and Phoenix, our two

complementary businesses,

have795 and 527 employees

respectively, with Phoenix passing

the 500-employee milestone for the

first time this year. Each business

operates autonomously, with its

ownidentity, headquarters and

management team. But they have

many commonalities, including

similar employment policies,

industry-leading knowledge and the

same values and culture. Wherever

possible, the businesses share good

practice and insights for the overall

benefit of BTG.

Growing our teams

inameasuredway

With our business continuing to expand,

we need to grow our teams to maintain

our high levels of customer service. And

we need to do it in a smart, measured

way: hiring the right people with the right

expertise to serve the market areas where

we see the biggest opportunities.

In 2025/26, we increased our headcount

by 7% to 1,331. Specialist IT skills were

again in strong demand, but the steps

we’ve taken to bolster our recruitment

capabilities meant we were still able to

identify and attract the talent we needed

this year. At Bytes, we employed an

additional recruiter this year, enabling

usto hire specialists in AI, data and

cybersecurity, as we look to boost our

service offerings. Phoenix also benefited

from having a dedicated recruitment

manager in place for the full year for the

first time, as we hired more technical

consultants and customer success

managers. Staff referrals also continued

to be a valuable part of our recruitment,

with referred candidates more likely to fit

into our culture.

As in prior years, we ran apprenticeship

schemes in both businesses and as part

of our sales training programmes we

welcomed 21 new colleagues at Bytes

and 13 at Phoenix this year. These

schemes reflect our strong focus on

developing and promoting talent from

within the company – one of the reasons

many of our people stay with us for a long

time. This loyalty is reflected in our low

attrition rates. Although the rate

increased slightly this year at Bytes,

where we restructured our private sector

sales team, our combined attrition rate

forBTG was 18%, in line with the industry

average range.

46 Bytes Technology Group plc

REVIEW OF THE YEAR

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

Digital processes that

improvefeedback and

enhancecareer mobility

As a technology company we should be

using the best digital systems, tools and

processes to support our colleagues. We

have made important progress this year

to make our people processes more

efficient and user-friendly. At Bytes, for

example, we focused on simplifying our

processes around performance, to make

them much easier for managers and their

teams to follow and understand. To give

people even more opportunities to move

around the business, we created a digital

tool that matches people’s skillsets with

new vacancies.

At Phoenix we also focused on

encouraging internal mobility, with a new

policy to make sure colleagues are more

aware of vacancies and how to apply for

the jobs. Linked to this, we improved how

we process and track employee changes

using our HR system. And we centralised

our recruitment tracking system, reducing

our spend on external agencies and

cutting the time to fill vacancies.

Recognising and rewarding

excellence

We are a real Living Wage employer and pay

our people fairly. Through our employee

recognition programmes, we also reward

sales and non-sales staff who achieve

business objectives, and we give incentives

to people who go beyond what’s expected

to serve our customers and support their

colleagues. Incentives this year included

ice skating and dinner, a day at the races,

spa days and a long weekend in Seville.

Engaging with our colleagues

We are proud of the dynamic, supportive

culture that has brought us this far. But

weknow that as we get bigger and our

business evolves we need to nurture our

culture. We keep a very close eye on this,

measuring our success as an employer

inseveral ways. The most important key

performance indicator on culture is our

employee net promoter score (eNPS),

which measures the likelihood of someone

recommending their employer to others.

Our eNPS of 62 was up from 57 in 2024/25.

While this remains well above the industry

average, it is down from a few years ago.

We believe the lower score reflects the

challenging period of internal transformation

that began in the prior year, as well as

economic and political uncertainty. To gain

additional insights into the strength of our

culture, we take part in annual Great Place

to Work surveys. This year we again

achieved good results. At Phoenix, 91% of

employees agree that they work at a ‘great

place’, and at Bytes, 82% do. This compares

very favourably to the 54% of employees at

a typical UK-based company who say that.

In the UK’s Best Workplaces among large

organisations (201–1,000 employees),

Phoenix was ranked 4th, and Bytes 64th,

while both businesses featured in the

BestWorkplaces lists for development,

wellbeing and technology for 2025. BTG

was also delighted to be awarded 14th

place in the Financial Times and Statista’s

UK’s Best Employers 2026 rankings, out of

500 companies assessed through

independent surveys of employees.

Along with quarterly town hall meetings

forall employees, we hold other events for

colleagues to engage with management

and each other, including annual kick-off

meetings for the sales and technical teams.

At Phoenix, we also check in weekly with

our people through an app, asking them to

respond to a few culture-related questions.

Around two thirds of colleagues respond

each week, providing us with good data on

what we need to work on.

Annual Report and Accounts 2025

STRATEGIC REPORT

Sustainability review continued

New BTG recruits

thisyear

314

Total headcount

at BTG

1,331

Looking after our

people’swellbeing

Our people’s physical and mental

wellbeing is important to us, and we work

hard to support it. This includes operating

a hybrid working policy. People whose

roles do not require them to be in the

office full time have the option of

spending around half their time working

from home. While we constantly monitor

our approach to make sure it benefits our

business, we believe it combines the best

of both worlds for us and our people: the

advantages of collaboration, learning and

social interaction in the office, with

positive work-life balance and flexibility

from being at home.

We encourage openness about mental

health issues and provide guidance and

support for anyone who needs it, including

through our designated wellbeing

ambassadors. At Bytes, the 24/7

employee assistance programme was

expanded this year to include access to an

online GP service. Bytes introduced

‘meaningful Mondays’, a lunchtime

forumopen to all that tackles a range

ofwellbeing topics. And Phoenix rolled

outanew online wellness service run

byan external provider, which includes

resources on all aspects of wellbeing, from

mental health to neurodiversity and diet.

Both businesses engaged occupational

health providers so we can better support

our people who have experienced health

issues to get back to work.

In 2025, Phoenix engaged with a bee

keeper and brought two hives on to the

site at Pocklington. Inductions and

training were given to staff who have

volunteered to monitor and support the

bee keeper in their duties. This project is

all about engaging employees in activities

that span the business, increasing skills

outside direct work and encouraging

careof our natural environment. These

bee enthusiasts have created one of the

most lively Employee Resource Groups

atPhoenix.

To support physical health, 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. We provide free

fruit in our offices and employees have

the option to join a private health and

dental insurance plan.

Building skills and

developingleaders

We want all our employees to keep

learning and broadening their skills.

So,inaddition to giving everyone the

opportunity for support through a

personal development plan, we constantly

offer opportunities for training. This

benefits our business too, because public

sector tender frameworks require us to

have a certain level of accreditations, and

vendors pay us higher rebates if we have

more accreditations. At Bytes this year

weupgraded our learning management

system, adding mobile access and new

resources for self-development so that

colleagues can learn on their own.

For both businesses, we launched ‘CEO

for a day’, where two people were chosen

to shadow our CEO Sam Mudd. Phoenix

expanded its own shadowing scheme,

enabling people to accompany a

colleague in another area of the business.

Phoenix also started a pilot mentoring

scheme, where colleagues can apply to

be mentored by one of Phoenix’s senior

leaders for six months. Another focus

area this year was leadership excellence,

with the rollout of a new training course

for ‘managers of managers’, which will be

expanded in the coming year.

48 Bytes Technology Group plc

REVIEW OF THE YEAR

Percentage of

womenatBTG

Promoting diversity and

fosteringinclusivity

Providing equal opportunities to all,

regardless of gender and ethnicity, is not

just the right thing do; having diversity

ofthought and an employee base that

reflects society makes for a stronger,

more innovative business. In recent years

we have made good progress towards

gender parity. Our CEO, Sam Mudd, and

the MD of Phoenix, Clare Metcalfe, are

both women and, at year end, 57% of

ourBoard were women. At Bytes and

Phoenix overall, women represent 36%

ofmanagers, and around 39% of our

totalworkforce.

This is significantly higher than the

average in the UK technology industry.

But we still want to go further. At Bytes

wehad five colleagues shortlisted at the

Women & Diversity in Channel Awards

2025, and the Women in Tech group

hasbeen working on several initiatives

including recruitment and diversity. At

Phoenix, we provided specific training for

women in sales, an underrepresented

area, and held workshops for women

employees on business finance.

Progress on ethnic diversity remains

slower than with gender. Our workforce

has a higher proportion of people from

aWhite British background than the UK

asa whole, though this reflects the

demographics of our main office

locations, in Surrey and East Yorkshire.

To better understand our diversity,

wecontinue to collect data on gender,

ethnicity, disability and neurodiversity,

based on voluntary self-reporting from

our employees, and we have built this

intoa standard onboarding questionnaire.

We have also been working on processes

and training around neurodiversity and

will continue to focus on this area in the

coming year.

The Women in Tech community has grown

from nine to around 40 women and allies

since we started in November 2024. We

will look to grow our engagement through

activities and events to strengthen our

culture and empower every woman at

Bytes to thrive.

Abbey Long

Chair of the Women in Tech group at Bytes

BTG gender balance

as at 28 February 2026

Women Men

57%

43%

Board

50%

Executive Committee

36%

64%

Managers

39%

61%

All colleagues

40%

60%

Executive Committee plus

direct reports

14 0

524

807

1 The Executive Committee plus direct reports

includes executive directors, our managing

directors and their direct reports, comprising

individuals for whom they have directline

management responsibility, excluding

administrative and support roles.

2 Managers refers to leaders in BTG

includingExecutive Committee and

seniorleadership members.

Annual Report and Accounts 2025

STRATEGIC REPORT

Sustainability review continued

Our communities

Our people’s commitment to making a positive difference in our

communities is an integral part of our culture and who we are.

We support social causes in several ways.

The most important and meaningful is

through volunteering our time. Besides

enriching the areas in which we work and

enhancing our reputation, volunteering is

enjoyable and rewarding for our people,

and helps them to get to know each other

in a social setting while boosting mental

wellbeing. As a business we also donate

money and IT equipment to support

positive change in the communities

wherewe operate.

Supporting our people to make

adifference

We have a proud history of encouraging

and helping our people to support causes

that matter to them. Every employee gets

one fully paid volunteering day a year and

many take the opportunity to spend time

with charities and people who need

assistance, while also getting to know

each other more.

At Bytes in 2025/26, we focused our

volunteering and fundraising efforts on

four main charities, each linked to one of

our offices. Near our headquarters in

Surrey, we again supported The Wildlife

Aid Foundation, an animal charity, helping

construct new pens for rescued foxes. In

Port Solent we partnered with The Muscle

Help Foundation, a muscular dystrophy

charity, and in Manchester with Mustard

Tree, which works to combat poverty and

prevent homelessness. From our Reading

office, our colleagues supported The

Ways and Means Trust, which provides

social and practical skills for people with

disabilities or poor mental health. These

focused partnerships have helped align

volunteering opportunities and

fundraising efforts.

Racing for a reason

Combining adventure with purpose, 30 Phoenix employees embarked on a

four-day race through the Benelux region in July – using only public transport.

Based on the BBC television series, Race Across the World, Phoenix’s Race for

a Reason saw the ten three-person teams striving to reach a dozen checkpoints

scattered across the cities and countryside of Belgium, the Netherlands and

Luxembourg. The teams needed to strategise carefully because the goal was

not just speed, but maximising points, as the checkpoints carried different

scores based on how hard it was to get to them.

The ‘reason’ for the unique race event was to raise money and awareness for

StLeonard’s Hospice in York, Phoenix’s chosen charity partner for 2025/26.

Phoenix fully funded the event, and the prizes, so St Leonard’s received every

penny of the more than £20,000 raised.

We simply couldn’t do what we do without the incredible support

ofbusinesses like Phoenix Software. Their Race for a Reason

challenge is a fantastic example of how companies can make

areal difference.

Annie Keogh

Corporate Partnerships Development Fundraiser, St Leonard’s Hospice

Case study

Volunteering hours

atBytes and Phoenix

2,15 9

50 Bytes Technology Group plc

REVIEW OF THE YEAR

Our people also volunteered with the

Rainbow Trust, which assists families

whohave a child with life-threatening or

terminal illness, Celia Cross Greyhound

Trust, Mid Surrey Mencap, which supports

adults with learning disabilities, and

PlayWise Learning, which helps young,

disabled children and their families.

At Phoenix, as in previous years, many

colleagues volunteered as part of our

education outreach programme, where

we engaged with more than 6,700

schoolchildren and young adults this year.

Our Phoenix colleagues also used their

volunteer day to help organisations such

as Scouts and a local hospice, or to

assistwith prisoner rehabilitation, or to

perform their volunteer role as a special

constable, trustee or school governor.

Intotal in 2025/26, BTG employees

contributed 2,159 hours to supporting

ourlocal communities.

Raising funds and donating

togreat causes

As a business and through our people we

take pride in raising and donating money

for organisations that do excellent work in

our communities. At Phoenix, in addition

to St Leonard’s Hospice, we raised funds

for Macmillan Cancer Support and

Oscar’s Paediatric Brain Tumour Charity,

and we entered several teams to run the

Yorkshire Marathon Relay for charity.

Ourdirect donations included Christmas

presents for Leeds Children’s Hospital,

paying for Christmas decorations at a

community centre in Tower Hill, London,

and funding a digital information screen for

Burnby Hall, a historic community building in

Pocklington. As part of our commitment to

support and invest in our region, we signed

on as the official digital sponsor of York City

Football Club for the 2025/26 season. As a

business founded and based in Yorkshire,

we’re proud to back a local club that plays

such an important role in the community. To

enable us to better support and encourage

our people’s personal fundraising efforts,

we introduced a new charitable giving policy

this year. We now match fundraising for up

to £500 per employee per event and

colleagues can also apply for financial help

for their fundraising projects.

At Bytes, we have a similar match-funding

policy, and we donated more than

£14,000 this way in 2025/26. Beneficiary

charities included Cancer Research UK,

Shelter, Men and their Emotions, and

Wildlife Aid Foundation. As a business we

supported numerous other good causes,

including Movember and The Giving

Tree’s Christmas appeal. We also

donated used IT hardware to not-for-profit

groups handpicked by our employees.

In2025/26 we donated 19 second-hand

laptops predominantly to Mustard Tree,

who focus on retraining homeless people

to equip them with better IT skills.

Delivering social value

wherewework

Phoenix operates mainly in the public

sector, which comes with a commitment

todrive social value where the work is

done. This fits in with our ethos of building

stronger communities, and we take this

responsibility seriously. As a STEM

Ambassadors Partner and a member

ofthe National Cyber Security Centre’s

CyberFirst programme, we deliver our

biggest social value contribution through

our education outreach programme.

Theprogramme is designed to unlock

opportunities and foster economic

empowerment by inspiring students to

take IT as a GCSE subject and consider

careers in technology. In 2025/26, this

outreach work included partnering

withDeveloping the Young Workforce,

aScottish organisation that connects

employers with education so that young

people develop the skills needed for the

workplace. We delivered career talks and

interactive sessions at schools in Glasgow,

where we have an office, as well as in West

Dunbartonshire, Stirling and Alloa.

Beyond education, we continued to

support TechHub at The Beam, where we

help deliver workshops and courses for

local businesses, the voluntary sector

andschools.

Our approach to charitable giving andvolunteering

We want our time and money to

havethe greatest impact. So in

2026/27, we will focus ondelivering

cyber awareness, digital skills

andtechnology education to

disadvantaged and underserved

groups. This is also part of the

government’s ‘opportunity mission’,

which is supported by the CEO

Steering Council.

For more details, see our CEO

reviewon page 9.

Sam Mudd at the House of Lords for a CEO Steering Council session

Annual Report and Accounts 2025

STRATEGIC REPORT

Sustainability review continued

Our planet

The impacts of climate change, water stress, waste pollution and biodiversity loss are

being felt across the world. As a responsible business, we are committed to playing our

part in caring for the environment by reducing our greenhouse gas (GHG) emissions,

making efficient use of resources and helping our customers to do the same.

Overview

As a technology business, we have both

opportunities and limitations when it

comes to making a positive impact on the

planet. Because we are an IT reseller, we

don’t make or transport physical goods.

We own four office buildings and lease

several smaller offices, with 1,331

employees in total, but many of our people

work from home for part of the week. Our

carbon footprint is therefore relatively

modest and our direct impact on broader

environmental issues such as biodiversity,

waste and water is also quite small.

However, while our own initiatives will

onlyhave a limited effect on overall

GHGemissions, we recognise the wider

potential impact across our value chain,

from our suppliers and customers. If we

all play a role, and encourage and support

each other to do what is within our power,

the overall effect will be considerable.

Individual and collective action is, simply,

the right thing to do.

We have set near-term and net zero GHG

emissions reduction targets and these

were validated in 2024 by the Science

Based Targets initiative (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. To achieve our

target of reaching net zero by 2040 at the

latest, value-chain emissions are key, as

our Scope 3 reporting shows (see page

55). So, we are working with our suppliers

to better understand their emissions and

reduction plans. By understanding if our

suppliers align with our goals and those

ofour customers, we can help make more

informed choices for our own IT andhelp

our customers make more sustainable IT

purchasing decisions.

The coming year is likely to see regulatory

changes related to sustainability reporting,

both within the UK and globally, and we are

monitoring developments. We are working

on our net zero transition plan to guide our

path towards reaching our goals and

expect to be in a good position to transition

to the new reporting requirements. We

also report against the recommendations

of the TCFD, which form part of the FCA’s

UK Listing Rules. We did not identify a

material impact on our own business

operations from climate change in our

TCFD scenario analyses (see pages 58 to

67). However, climate change is too

important for us not to act. This is also

expected of us by our stakeholders, from

investors to employees and customers.

How our environmental

reporting is structured

To help readers to find the

information they’re looking for,

our reporting on climate issues

is structured as follows:

Our planet

This section tells the story of our

impact on the planet, our actions

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

• • An ‘additional environmental

disclosures’ section containing

detailed environmental

disclosures and related

methodologies.

See pages 58 to 76.

Our science-based targets

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

Maintain our reduction in Scope 2

(market-based) emissions at

100%

2, 3

Reduce Scope 1 emissions by

60%

Reduce Scope 1 emissions by

90%

1 Validated by the SBTi.

2 From a 2020/21 baseline.

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 0tCO

e, 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

(market-based) emissions at

100%

Reduce Scope 3 emissions by

90%

52 Bytes Technology Group plc

REVIEW OF THE YEAR

This year we saw a 10% reduction in

ouremissions intensity, even with

additional buildings occupancy and

growth in revenue and people. This is

largely because our suppliers, such as

Microsoft, Adobe and AWS, reduced

theiremissions intensity. In 2025/26 our

absolute overall emissions increased

through growth in the business and from

methodology improvements we made to

our second largest emissions category

(use of sold products).

This year, we reached the completion

date of our first emissions reduction

target: reducing our Scope 1 emissions

by 50%, from a 2020/21 baseline.

Weexceeded this target by reducing

emissions by 68%. All our offices now run

on a renewable energy tariff for electricity

and, where heating gas is used, we have

switched to a biogas tariff. The most

significant source of reduction for Scope

1 is from the replacement of the HVAC

systems in Bytes House. We had already

exceeded our initial 2025/26 Scope 2

target of a 50% reduction on our base

year (four years early), having switched all

our electricity to renewable sources in our

owned offices and introduced solar

panels at our York office. As we continue

to grow, our challenge is to maintain our

reduction in Scope 2 emissions at 100%.

This is our first year reporting against our

waste and water targets. Our waste

results are mixed: we saw an increase in

the percentage of waste recycled from

38.4% to 44.7%, but we also saw the total

volume of waste per employee over the

year increase from 19kg to 19.6kg. Our

recycling rate should improve next year,

following some issues with recycling

collections at Bytes in 2025/26. The

introduction of food waste collections has

been successful, with almost 3,100kg of

food being diverted from general waste.

Our targets for water reduction are based

on water use per employee – and this year

we saw the volume of water per employee

increase at both Bytes and Phoenix.

Some of this increase may be down to

moving into a new building, but we need

to do more work to fully understand

thechange.

Our performance this year

Part of the

FTSE4GoodIndex

In July 2025, BTG was pleased

tobecome a constituent of the

FTSE4Good Index Series for the first

time. The index series is designed

tomeasure the performance of

companies demonstrating strong

environmental, social and

governance practices. The

FTSE4Good indices are used by a

wide variety of market participants to

create and assess responsible

investment funds and other products.

Working with our

value-chain partners

toreduce emissions

Suppliers

Managing our value-chain emissions

is crucial to our net zero ambitions.

This year, 88% of our total emissions

came from purchased goods and

services. Of this, 80% are from our top

13 vendors. Microsoft is our largest

supplier and formed 59% of our

emissions in 2025/26. However, its

emissions intensity decreased by 9%

in the past year, with AWS, Adobe and

Palo Alto also making energy intensity

reductions. If our suppliers meet their

stated emissions targets, then we

should also be able to meet ours. Our

approach is to work with our suppliers

to better understand their emissions,

their plans to reduce them and also

how we can help effect change based

on their technology and knowledge.

In2026/27 we will increase our focus

on working with our supply chain.

Customers

We can help accelerate the UK’s move

to a low-carbon economy through the

solutions we provide to our customers,

through our vendors and our services.

One of the main ways we do this is

bysupporting our customers to

understand their emissions from using

technology we provide, such as helping

customers understand Microsoft M365

and Azure carbon reports and by

advising them on more sustainable

hardware and software approaches.

Aligned with this are services we

provide through FinOps and

GreenOps, which optimise workloads

in the cloud to avoid unnecessary

spend and resource wastage.

Increasingly, AI is adding to carbon

footprints. To promote efficient use

ofAI, we provide ‘prompt’ training to

customers (and our own employees)

on using Microsoft Copilot to reduce

the number of queries and refinements

needed to get to the desired answer.

Taking action on waste

andwaterusage

Along with reducing our emissions, we

also committed to using our resources

more sparingly and to reducing waste.

This year we established targets to

reduce our waste and water usage,

andpolicies to help us achieve them. On

waste, for example, we aim to have 50%

of our waste recycled by 2030/31, from a

2023/24 baseline of 41%. On water, our

goal is to reduce consumption on a per

employee basis by 25% by 2030/31, again

using a 2023/24 baseline. (Read more

about our targets on page 72.)

Our initiatives to meet these goals include

education and training on the importance

of reducing waste and using water

efficiently. We will also use more targeted

actions, such as improving signage at

bins, looking at ways it install low-flow and

water saving devices, and conducting

water leak surveys. Technology is an

important part of our business, so we will

look to increase lifespan and source

refurbished products, where possible.

Annual Report and Accounts 2025

STRATEGIC REPORT

Sustainability review continued

Supporting climate solutions through considered use

of removal and offsetting

Reducing our emissions is our highest priority for our transition to net zero. We

have used the Oxford Principles for Net Zero Aligned Carbon Offsetting (revised

2024) to guide our approach to funding carbon avoidance and removal. As part

of our approach to increasing the storage durability of our carbon removal, this

year we are incorporating a UK Biochar project. In addition, we want to support

projects that benefit local communities and nature, because a just transition and

the biodiversity crisis are also important global issues.

We’re aware of the challenges inherent in carbon removal and offsetting,

soweare careful to ensure that the programmes we invest in are backed by

recognised carbon standards. We work with Ecologi, a leading climate action

platform, to manage our residual emissions by investing in a diverse portfolio

ofhigh-quality carbon credits. Ecologi supports Gold Standard and Verra-

approved carbon reduction, and community- and biodiversity-enhancing

projects around the world. This year, we joined Ecologi and a research fellow

from Oxford Net Zero on a webinar to discuss our real world example of applying

the Oxford Principles. To cover the value of our Scope 1 and 2 emissions across

the Group, we invested in a UK Biochar project, based close to our Leatherhead

office, to provide durable long-lived carbon storage as our removal credits. This

is 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), Bytes has invested in nature-based carbon removal

credits to cover its Business travel (category 6), including mangrove restoration in

Pakistan and reforestation in Mexico, supporting jaguar habitats. For the remaining

categories, carbon avoidance credits have been purchased, including in a clean

cookstoves project in Uganda, supporting healthier communities, and rainforest

protection through the Matavén REDD+ project in Columbia.

Phoenix is investing in UK nature projects for peatland, meadow and seagrass

restoration to support UK nature initiatives. While we can’t allocate this against

our emissions, it supports initiatives in one of the most nature-depleted countries

in the world. For more details, see Phoenix’s carbon report at phoenixs.co.uk.

Case study

BTG joined Phoenix as a member of the

Government Digital Sustainability Alliance

(GDSA) this year. BTG now sits on the

Scope 3 Working Group, contributing to

the UK Government’s understanding and

strategy around reducing Scope 3

emissions from technology. The GDSA

was established to improve digital

sustainability outcomes for the UK

Government and its supply chain – and

inso doing, support wider strategies,

such as the Greening Government

Commitments, the Net Zero Pathway and

the UN Sustainable Development Goals.

We were also proud of our scores from

EcoVadis, which assesses companies

across four pillars: environment, labour

and human rights, ethics, and sustainable

procurement. Both Bytes and Phoenix

achieved silver medals this year, placing

them in the top 15% of companies.

Phoenix was awarded a bronze medal the

previous year.

Scope 1

We exceeded our 2025/26 target to

reduce Scope 1 emissions by 50% this

year by achieving a 68% reduction from

our 2020/21 baseline year.

Staying on track for Scope 2

We met our 2025/26 Scope 2 target early

– and we continue to meet it. This year we

brought our emissions back to 0.0tCO

so are confident we will meet our 2028/29

target to maintain a 100% reduction from

our 2020/21 baseline year.

54 Bytes Technology Group plc

REVIEW OF THE YEAR

On course for our long-term

Scope3 targets

Our Scope 3 emissions increased this year

but only by 0.3%, while our energy intensity

(by revenue) decreased by more than 10%.

This was mostly because of the reduction

in absolute emissions from our purchased

goods and services, which in turn was

aresult of the reduction in emissions

intensity from our suppliers. Our capital

goods emissions also reduced.

There was a large increase in category 11

(use of sold products) emissions because

of more accurate data being available

across the Group. We also changed our

baseline year figure for category 11, to

reflect the earlier methodology change

for calculating the lifetime use of sold

product and the more accurate data sets

from both operating companies.

Although far smaller categories, our

business travel and employee commuting

(including homeworking) emissions have

increased this year, both in absolute and

energy intensity terms. This may be a

consequence of having more accurate

activity-based rather than spend-based

data available. The signs that the energy

intensity is decreasing in our supply chain

are encouraging. Now we need to focus

on capturing data from our suppliers and

reviewing our own data to see where we

can support and drive lasting change.

Expanding our carbon

literacyprogramme

Collective action on climate is not just

forbusinesses; as individuals we all have

a part to play. We are supporting our

people to do more through carbon

literacy awareness training. Launched in

2024/25, the training aims to increase our

people’s understanding of the causes and

impacts of climate change, and the steps

they can take to reduce their own carbon

footprint. It also explains our reporting

requirements, our GHG emissions

reduction targets and our plans to get

usthere.

Thisyear we expanded the programme,

providing virtual and in-person training

sessions. Additionally, we have

incorporated sustainability into our

onboarding programme for new starters

at Phoenix, and we will expand this for

allnew employees in the new year. In

2026/27 we will build carbon literacy

intomandatory annual training and

onboarding across the Group.

Third-party assurance

For the first time this year, in addition

to having an external consultant

calculate our emissions, we

workedwith a different third-party

consultancy, Carbonology, to audit

and verify our emissions data

againstISO 14064-1. We opted

forthe highest level of assurance

(reasonable) across all three scopes,

and were delighted to gain assurance

for our 2025/26 GHG emissions data

at the end of April 2026.

Annual Report and Accounts 2025

STRATEGIC REPORT

Sustainability review continued

Our sustainability work across our two

businesses is led by Lisa Prickett, our

Group Sustainability Manager. Lisa works

with the senior leadership team, our

Sustainability Steering Committee, the

Board’s ESG Committee and the wider

business to coordinate our approach and

activities, ensure progress against our

targets and report on performance.

Cutting emissions and protecting the

planet more broadly is a collective goal,

so we also work with others beyond BTG.

This year we responded to consultations

on the UK’s Sustainability Reporting

Standards, the SBTi and research

aroundincorporating nature in reporting.

Lisa is a member of the Institute of

Sustainability and Environmental

Professionals (ISEP, formerly the IEMA),

the GDSA and theSustainable Business

Network, whichsupports and empowers

Surrey businesses to adopt low-carbon

behaviours and operations. Jennifer

Clewley, ESG Lead at Phoenix, is a

member of the GDSA and regularly

collaborates with public sector bodies.

For full details of how we oversee and

manage environmental issues, see our

TCFD disclosures on pages 58 to 67.

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

– Social 2

– Governance 1

EcoVadis silver medals

How we work collaboratively towards our sustainability targets

In the coming year we will focus on

formalising and publishing our net zero

transition plan, to stay on track to meet

ourtargets. In addition to ourown actions,

we will be increasing oursupplier

engagement activities, particularly with

our main vendors, who are responsible

formost of our Scope 3 emissions, to

understand their GHG emissions,

reduction plans and progress. Most

leading vendors take sustainability very

seriously, with clear and well-publicised

net zero plans, which gives us

reassurance. And we will keep striving

toreduce our own emissions and taking

other positive steps, including through

advocacy, working with external bodies,

and increasing awareness among our

employees and partners, to help to

protectthe planet.

Looking ahead

Promoting, enabling and inspiring sustainable practices

In 2025/26, we continued our electric vehicle (EV) scheme, which enables

employees to buy cars through salary sacrifice. Since we first introduced the

scheme in 2023/24, 112 people have used it to buy an EV, including 42 this year.

All our main office locations have electric car charging points, and we also have a

car sharing network and secure cycle parking. We encourage energy and waste

efficiencies in our offices through infrared sensors, reduced printing, a request

system for consumables, through off screens overnight and sensor taps that

reduce water usage. We also set an example by producing some of our own

power. At Phoenix, the 264 solar panels we installed in 2025/26 produced

around23% of our energy requirements, and 15% went back into the grid to

support local renewable energy use.

Solar panel installation at our Phoenixoffice in Pocklington, Yorkshire

Read more about

our approach

tosustainability

on our website

We support all the UN Sustainable Development Goals, but

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

56 Bytes Technology Group plc

REVIEW OF THE YEAR

Disclosure statements

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

68 Additional environmental disclosures

74 Non-financial and sustainability informationstatement

75 Viability statement

76 Section 172 statement

Playing our part in the transition to net zero.

STRATEGIC REPORT

57Annual Report and Accounts 2025

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.

BTG responded to the UK Government’s

consultation on the future of the UK

Sustainability Reporting Standards (SRS)

in 2025. The government published these

standards as SRS S1 and S2 in February

2026, but they are not yet mandatory.

Although TCFD has been disbanded

andits recommendations adopted into

broader IFRS S1 and S2 standards – and

subsequently the UK SRS S1 and S2 – we

continue to report using the TCFD

recommendations. We also maintain our

wider GHG emissions reporting – see

Additional environmental disclosures

onpages 68 to 73 and Our planet on

pages 52 to 56. 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.

This year, through our new waste and

water policy, we added seven targets

andtheir associated metrics, which are

detailed on page 72. These focus on the

broader environmental impacts of waste

and water use but arealso relevant to our

GHG emissionsreporting.

Our view is that the direct impact of

climate change on BTG will be relatively

low, given our primary business is in

software, IT services, and security and

cloud solutions, 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. Employees 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 focus on our

environmental impacts and support

thetransition to a low-carbon economy.

Adapting, alongside our customers,

toclimate change and more weather

extremes is the right thing to do. From

arisk perspective, it also helps keep

thebusiness resilient – but it brings us

opportunities too, as companies look to

technology for the systems and services

that they need to manage transition risks

and move to a low-carbon economy.

Complying with TCFD

This is our fifth report against the

recommendations of the TCFD, which we

expanded previously to incorporate the

requirements of the Companies (Strategic

Report) (Climate-related Financial

Disclosure) Regulations 2022 – which

itself aligns with the recommendations.

We have again complied with all 11 areas

of the 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 52 to 56 and in Additional

environmental disclosures on pages

68to73, 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 63

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 52, 58 to 72, 116 and 120

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 52, 72, 116

and120

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 71 n/a

c. Describe the targets used by the

organisation to manage climate-related

risks and opportunities and performance

against targets.

Fully compliant – ssee pages 52, 72, 116

and120

n/a

Annual Report and Accounts 2025

STRATEGIC REPORT

Given that scientific understanding of and

regulations relating to climate change and

its impacts evolve, we oversee its risks

and opportunities at the highest level of

the Group. Our governance structure

ensures we factor climate-related issues

into our thinking throughout the business,

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

Executive Committee, management and

GroupSustainability Manager

• • Operational management of environmental targets and stakeholder engagement

• • Review and monitor climate-related risks and opportunities

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

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 32 to 43.

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. 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. For more

information on the ESG Committee’s

activities, see pages 106 to 107.

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 considered

climate-related risk as part of its work

reviewing risk overall.

Our Board-level ESG Committee has

increased the scrutiny of our climate-

related activities, monitoring how we

implement the company’s ESG and

sustainability strategy. During the year,

the ESG Committee received updates

onour ESG strategy, and was briefed on

our environmental, and waste and water,

policies, on phase one of our net zero

transition plan, 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

Task Force on Climate-related Financial Disclosures

(

TCFD

)

continued

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 senior leadership 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 33 to

35. 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 employee-led initiatives

atoperational level, which promote

engagement, raise awareness of the

importance of environmental issues

andorganise local activity. These groups

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 35 to 43.

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 2025

STRATEGIC REPORT

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 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 2025/26, we again 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 2025 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.

Strategy

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

The NZE translates the 1.5°C goal into an updated global

pathway for the energy sector to achieve net zero carbon

dioxide (CO

) emissions by 2050. The NZE sees temperatures

rise by around 1.65°C above pre-industrial levels before falling

back to 1.5°C by 2100.

STEPS Stated Policies Scenario This scenario considers the application of a broader range of

policies, including those that have been formally tabled but not

yet adopted, as well as other official strategy documents that

indicate the direction of travel. Barriers to the introduction of

new technologies are lower than in the CPS (see below), but

this scenario does not assume that aspirational targets are met.

By 2100, the global temperature is projected to rise by 2.5°C.

CPS Current Policies Scenario This scenario considers a snapshot of policies and regulations

that are already in place and offers a generally cautious

perspective on the speed at which new energy technologies can

be deployed in the energy system. Under this scenario, total

GHG emissions lead to a global average surface temperature

rise of around 2°C in 2050 and 2.9°C in 2100.

1 From the IEA World Energy Outlook 2025.

Task Force on Climate-related Financial Disclosures

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DISCLOSURE STATEMENTS

Risks and opportunities

Estimated annual financial impact Risk category

<£2.5m Minor

£2.5m to £5m Moderate

£5m to £7.5m Material

£7.5 m + Severe

We considered these risk scenarios over

a broad timeframe, from 2025/26:

• • 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 24 years – which

covers our net zero goal of 2040/41,

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 changes 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. Our Sustainability/ESG

risk incorporates all aspects of

sustainability and, in particular, relates

topredicted and unforeseen future

regulations, which may assess areas we

have not measured with the same focus

asclimate, such as biodiversity and

socialaspects of sustainability. We have

identified the physical risk from climate

change as an emerging risk (see page 34

in our Risk report for more details).

To analyse the materiality of climate-

related risks, we used the same process

and financial impact categories as we do

for principal risks. We have assessed 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. We have not changed

ourinitial conclusions around the nature

of climate change this year, and we are

confident that it has had a limited effect

on our accounting judgements and

estimates. We have therefore determined

that it has had no material impact on our

asset and liability valuations at

28 February 2026.

Assurance and target validation

In 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 our 2025/26 emissions

data, we obtained third-party assurance

on our Scope 1, 2 and 3 emissions data to

a reasonable level. For more details, see

Ourplanet on page 55.

Annual Report and Accounts 2025

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 impact 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 expand our supplier engagement

to better understand their GHG

emissions and reductiontargets.

NZE – minor

STEPS – minor

CPS – 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

make 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 3% of gross profit

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

STEPS – minor

CPS – 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. This forms

part of our Emerging technology

principal risk (see page 40).

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. For

details of our mitigation actions,

see our Emerging technology

principal risk on page 40.

NZE – minor

STEPS – minor

CPS – minor

Short term: one to three years Medium term: three to ten years Long term: ten to 24 years

Task Force on Climate-related Financial Disclosures

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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 and our

Chief People Officer.

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 engage with

customers.

We also create opportunities for

engagement with all our

stakeholders through 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

STEPS – minor

CPS – minor

The impact of AI Market The use of AI – in particular, the

expansion of LLMs – is consuming

greater levels of power than

traditional searches, and with the

addition of producing pictures and

videos, the number of data centres

has expanded, as has the power

and cooling that they need.

Given we sell AI products to

customers, this forms part of our

own GHG emissions reporting.

Therisk is that without a shift to

renewable-electricity-powered

grids, we may miss our GHG

emissions reduction targets, which

could affect our reputation and

ability to retain high scores with

ESG ratings agencies.

There is also a risk if customers,

conscious of their own impact,

choose to avoid or limit their use of AI.

Despite an acceptance that this

risk is largely out of a business’s

control, we provide training to

customers that includes ‘prompt’

training, which reduces the number

of times an LLM is engaged. We

have also given our employees

carbon literacy training on the

impact of AI.

At present, it is difficult to establish

the GHG emissions solely from AI

because it is embedded in other

products – but we are tracking

annual emissions and intensity

from our top vendors.

The impact could be lowered by

using global grids, which use a

larger percentage of renewables,

and if vendors focus on building

where the grid is greener and on

using less-damaging refrigerant

gases for cooling.

Low (C1)

– moderate

Medium (C3)

– moderate

High (C6)

– moderate

Short term: one to three years Medium term: three to ten years Long term: ten to 24 years

Annual Report and Accounts 2025

STRATEGIC REPORT

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

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 on

energy use. Increased extreme

weather could affect power lines.

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.

If extreme weather events affect

power lines, or flooding affects

travel to offices, mobile

connectivity and our network

access mean that our employees

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

Acute/chronic 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% 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

Task Force on Climate-related Financial Disclosures

(

TCFD

)

continued

Short term: one to three years Medium term: three to ten years Long term: ten to 24 years

66 Bytes Technology Group plc

DISCLOSURE STATEMENTS

Summary of our key climate-related opportunities

Opportunity Description How we are responding

Scenario and potential

financial impact

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-related

risks of accessibility and physical

damage prompt organisations 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 to increase

irrespective of changes in jurisdictional climate policies.

NZE – minor

STEPS – minor

CPS – 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 to 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

STEPS – moderate

CPS – 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 above, 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

STEPS – minor

CPS – 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 to improve our scores.

We are also proactive about our support for the

environment and promote this to our employees

through, for example:

• • 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 car parks.

Under the various scenarios, STEPS and CPS 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

STEPS – moderate

CPS – moderate

Short term: one to three years Medium term: three to ten years Long term: ten to 24 years

Annual Report and Accounts 2025

STRATEGIC REPORT

Additional environmental

disclosures

With the increased attention on environmental performance, this year we’ve again

brought together in one place the environmental disclosures we make in addition to

our TCFD reporting – and to support the narrative in Our planet on pages 52 to 56.

This includes progress against our GHG

emissions, waste and water 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, waste data

andwater usage, 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 improve

our methodologies every year. We use

theGreenhouse Gas Protocol Corporate

Accounting and Reporting Standard as

the methodology for all our carbon

reporting (see page 73). Having

comprehensive data has enabled us to

become far more sophisticated in our

analyses and reporting.

This year the most significant changes

have been in the data accuracy behind

Scope 3, category 11, where we now have

data from both operating companies,

rather than needing to extrapolate from

one business. This has increased our

emissions in this area. We also worked

with our consultants to re-calculate our

baseline year of 2020/21 for Scope 3,

category 11, because we updated our

methodology for 2024/25 to include full

lifetime emissions from use of our sold

hardware and also to use hardware

reports from both operating companies

for more accurate calculations.

In December 2024, Bytes purchased two

buildings next to our Leatherhead head

office. One building, Cassini Court, is fully

leased, and Bytes and BTG employees

began occupying the other, Pascal Place,

in October 2025. Both buildings were

brought under a renewable energy tariff,

but we expect the energy requirement

forPascal Place to increase in financial

year 2026/27 given its part occupation.

During financial year 2025/26, we

measured our emissions from these

buildings more accurately and

determined a lower-than-5% increase

inour Scope 1 and 2 emissions. Given

wehave not reached the 5% materiality

threshold, we have not needed to

rebaseline our emissions or resubmit

ourtargets to the SBTi.

As part of our commitment to integrity

andtransparency, this year we engaged

athird party, Carbonology, to assure and

verify our GHG emissions data against

ISO 14064. This has been done across

Scope 1, 2 and 3 to a reasonable

assurance level.

68 Bytes Technology Group plc

DISCLOSURE STATEMENTS

Scope 1 and 2 data year-on-year comparison

Scope 1 Direct emissions from our sites

Scope 2 Market-based indirect emissions

from the energy we buy

Scope 1 50% reduction target set in 2020

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

17.3

27.3

233

26.7

0 0 0

5.3

116.5

Our Scope 1 emissions for 2025/26

decreased from 91.6tCO

e in the prior

year to 17.3tCO

e. This reduction is

because of a new HVAC system at Bytes

House, which is more efficient and has

required less maintenance. The heating

gas used in the two purchased buildings

has been transitioned to a green gas

tariff, which has also had a carbon

avoidance impact.

Although market-based Scope 2

emissions decreased from the prior

yearbecause we brought the purchased

buildings under a renewable tariff, the

0.04tCO

e isfrom two months of car

parklighting under a standard tariff, which

was only switched over to the renewable

tariff in May2025. Given our practice of

reporting to one decimal place, this will

show as zero emissions.

This year we reached one of our first

reduction targets, which, given the timing,

was not validated by the SBTi but is

important to keep the business on track.

Our Scope 1 target was to reach 50%

emissions reductions in 2025/26 from

a54.5tCO

e baseline figure in 2020/21,

so the target meant reaching 27.3tCO

by 2025/26. We surpassed this by

reaching 17.3tCO

e, which is a 68%

reduction in Scope 1 emissions from

our2020/21 baseline.

In addition, we met our original Scope 2

target of a 50% reduction in market-

based emissions from a 2020/21

baseline. We met this target the following

year by shifting to renewable energy

tariffs, and reached zero emissions in

2022/23. As such, we amended our

target to maintain a 100% emissions

reduction. Apart from emissions related

to the timing of switching over contracts

for the purchased buildings, we continue

to meet this target.

Annual Report and Accounts 2025

STRATEGIC REPORT

Additional environmental disclosures continued

Scope 3 data year-on-year comparison

Scope 3 data (revised for 2022/23 and 2024/25)

Scope 3 categories 2022/23 (tCO

e) 2024/25 (tCO

e) 2025/26 (tCO

1 Purchased goods and services 10 5,5 37.9 199,618.6 189,712.9

2 Capital goods 88 0.1 1,026.5 1,001.1

3 Fuel and energy-related activities 55.8 64.7 93.7

4 Upstream transportation and distribution 5.4

3.9 3.4

5 Waste generated in operations 1.0 0.6 0.7

6 Business travel 264.0 39 8.1 523.5

7 Employee commuting

(including working from home)

1,372.0 1,50 8.1

1,706.7

8 Upstream leased assets 33.8 19.6 40.2

11 Use of sold products 15,366.7

12,236.8

22,432.7

Total Scope 3 123,516.7 214,876.9 215,514.9

a Revised in 2025 because of a corrected well-to-tank calculation.

b This year, we calculated our category 11 (use of sold products) using the full lifetime methodology, as well as having more accurate data from both operating companies. In

2024/25, we corrected the calculation to include the full lifetime use of the hardware, but had to extrapolate the data from only one operating company, which proved to be

significantly different. For our baseline year 2022/23, we recalculated using the same lifetime methodology and the more accurate data from the two operating companies.

c The employee commuting figure was amended for 2024/25 because of an error. Data from questionnaires had been collected from both operating companies but one had

been missed, so the data was extrapolated from one set of results. This was rectified in June 2025.

Total tCO

100

200

5,000

10,000

15,000

20,000

25,000

50,000

100,000

150,000

200,000

250,000

2022/23

Baseline

2024/25 2025/26 2030/31

Target

2040/41

Target

Category 5

Category 4

Category 8

Category 3

Category 6

Category 2

Category 7

Category 11

Category 1

Total

Scope 3

70 Bytes Technology Group plc

DISCLOSURE STATEMENTS

Energy and carbon data

Energy, GHG emissions and intensity metrics (kWh and tCO

2024/25 (revised

) 2025/26

Group kWh tCO

e kWh tCO

e Change

Energy consumption 1,839,096.9 2,512,388.2 +673,291

Scope 1 – Direct emissions from our sites 191,676 91.6 421,439.3 17.3 -68.3%

Scope 2 – Indirect emissions from the energy webuy

Location-based

955,574

179.9

1,223,627.2

200.8 +10.4%

Market-based

5.3 0.0 -10 0%

Scope 3 – All other indirect emissions across

ourvalue chain

691,846.5

214,876.9 867, 321.1 215,514.9 +175,475

Total emissions – location-based

215,148.4 215,732.9 +0.3%

Relative emissions – location-based tCO

e/£m GII 102.4 92.2 -10.0 %

Taking our renewable energy into account

Total emissions – market-based

214,973.8 215,532.2 +0.3%

Relative emissions – market-based tCO

e/£m GII 102.3 9 2.1 -10.0%

a Our methodologies for reporting energy and carbon data are set out on page 73.

b Our kWh emissions have been revised for Scope 3 to only include Business travel, as per SECR guidelines.

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.

e Scope 3 kWh figure revised to account for only Business travel, because this is the standard approach.

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 2024/25 and 2025/26. 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 73, 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.

Annual Report and Accounts 2025

STRATEGIC REPORT

Additional environmental disclosures continued

Waste

This year we set ourselves ambitious targets for waste reduction

and recycling. The targets are published within our new waste

and water policy (available at bytesplc.com/about-us/

governance). We have established a baseline of 2023/24, which

is when we had more accurate and comparable data for waste

reporting. Our targets are based on a reduction of waste

produced per employee and a percentage of waste recycled

across the whole business, which allows for growth while

ensuring our targets remain relevant.

Our waste targets, from a baseline of 2023/24, are:

• • 0% to landfill by 2027/28

• • Percentage of waste recycled – 50% by 2030/31 and

65%by 2035/36

• • Reduction in total waste intensity (per employee) – 15%

reduction by 2030/31 and 25% reduction by 2040/41.

Waste performance

Financial year Total waste (kg) General (kg) Recycled (kg) WEEE

(kg) Food waste

(kg) Recycled (%)

Total waste per

employee (kg)

2023/24 23,824 13,999 9,346 479 n/a 41.2% 22.5

2024/25 21,834 13,834 7,747 601 n/a 38.4% 19.0

2025/26 25,236 13,932 7,103 1,079 3,097 44.7% 19.6

1 Waste electrical and electronic equipment.

2 Food waste included from 2025/26.

Water

BTG’s operations are within the UK and all the water the Group

uses is sourced from the mains through UK utility companies.

In2021 the Department for Environment, Food and Rural Affairs

(Defra) identified regions in the south of England – where our

Leatherhead, Reading, Portsmouth and London offices are – as

‘Serious’ under its water stress classification, and regions in the

north of England where we are located – York, Manchester and

Salford – as ‘Not Serious’. Globally, the World Resources

Institute’s (WRI) Aqueduct tool has identified the UK’s baseline

water stress as low–medium (10–20%), although the UK’s

drought risk is measured at medium–high. This means that,

although none of our water is sourced from areas the WRI

deems to be under ‘high water stress’, given the impacts of

climate change – including increasing drought periods – we

cannot be complacent in the UK about water availability. So,

BTG is taking steps to measure and reduce water use.

This year we also set ourselves ambitious water reduction

targets and published these within our new waste and water

policy. We have established a baseline of 2023/24, which is

when we had more accurate and comparable data for water

reporting. Our targets are based on a reduction of water used

per employee, which allows for growth while ensuring our

targets remain relevant.

Water performance

Water usage per reporting year (m

) Total Water use per employee (m

) Group average

2025/26

2,15 9

3,509

1,350

2024/25

1,350

2,375

1,025

2023/24

1,428

2,440

1,012

Location

Bytes House and Pascal Place, Surrey, UK

East Yorkshire, UK

Targets

2025/26

2.78

2.73

2.65

2024/25

1.76

1.91

2.14

2023/24

2.26

2.31

2.41

2040/41

(30% reduction) 1.62

2030/31

(25% reduction) 1.73

72 Bytes Technology Group plc

DISCLOSURE STATEMENTS

This year we saw our water use per

employee increase, which, for Bytes,

waspossibly caused by occupying a

newoffice building. However, usage

hasalso gone up in Bytes House and in

Pocklington, so more work is needed to

understand the causes of the increase –

such as more people working more days

in the office, a change in water-use

behaviour or potential leaks.

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 were verified against 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

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 2025/26 we

worked with our consultancy using the

notch carbon accounting platform to map

our energy and carbon data (Scope 1, 2

and 3), using our 2020/21 baseline for

Scope 1 and 2 and our 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 2025 factors as published by Defra

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.

For non-vendor spend, where activity

data was not available, conversion factors

have been applied based on Defra-

published 2022 EEIO (environmentally

extended input output) spend-based

conversion factors, adjusted for inflation.

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. For vendor

spend, 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 82.3% of Bytes vendor spend

and 84.4% of Phoenix vendor 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 and performance data

is set out in this section, on pages 68 to 71

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.

Water and waste measurements

Water usage is taken from our utility bills

in m

. There are separate meters for

BytesHouse, Pascal Place and Phoenix

Software’s Pocklington building.

Waste stream data is collected from our

waste carriers each month. However, this

data was incorrect in May 2025. There was

an estimation made for both recycling and

general waste for that month. Where data

is provided in tonnes, this is converted to

kilograms for all waste streams.

Where data is provided in handwritten

form, a best conservative estimate will be

made for any unclear entries, based on

the items collected.

More work is needed to understand the

data that is routed to energy-from-waste

facilities versus landfill for Bytes.

Nature and biodiversity

In addition to the areas we measure,

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, through our offsetting initiatives,

which also have a biodiversity benefit.

Annual Report and Accounts 2025

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 19), Sustainability review

(pages 44 to 57), Risk report (pages 32 to 43) and Viability statement (pages 75 to 76).

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 assured to a

reasonable level for the first time this year. Our ongoing carbon literacy awareness

programme continues to be 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 44 to 57, the TCFD

section on pages 58 to 67, Additional environmental disclosures on pages 68 to 73

and the ESG Committee report on pages 106 to 107.

BTG: Environmental policy, waste and

water policy

Bytes and Phoenix: 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 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.

For more information, see Our people on pages 46 to 49, The Board’s

yearonpage83, Stakeholder engagement on page 88 to 91 and the

NominationCommitteereport on pages 101 to 105.

BTG: Speak-up policy

Bytes and Phoenix: Health and safety

policies; equity, diversity and inclusion

policies; gender pay gap reports;

speak-up 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 19 and Measuring progress on pages 10 to 11.

Our policies are subject to periodic review, with updates made as and when required. To read our policies, visitbytesplc.com.

74 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 2029. 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 over half of the viability period,

and taking into 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 has recently been

renewed and runs until May 2029.

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.

The Board has performed a robust risk

assessment of the principal risks and

uncertainties facing BTG, as outlined

onpages 35 to 43. 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.

BTG’s gross invoiced income and gross

profit increased by 11.5% and 2.5%

respectively in 2025/26 but operating profit

reduced by 5.6% with the lower gross profit

growth affected by Microsoft incentive

changes flowing down to operating profit

and with our cost base increasing in line

with continued investment in staff which

saw our headcount rise by 7%, national

insurance rises, and our most active

yearin implementing new systems.

Weagainended the year with strong cash

conversion above our target of 100%

at£98.6 million of cash which was after

returning £74 million to shareholders

byway of dividends and share buy

backpayments.

Our growth strategy continues to reflect

our core strength of doing more with

existing customers, which contributed

97% of our gross profit at a renewal rate of

99% – combined with success in winning

new customers – who contributed more

than £5 million of gross profit in 2025/26.

This is central to our view that BTG has a

business model which provides resilience

to the impact of external disruptions and

the conclusion that our operating

companies will continue to operate and

meet our future commitments and

liabilities over the next three years, given:

• • 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 public and private sectors

and no one customer making up more

than 1% of our gross profit in 2025/26

• • 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 in areas such as

managed services, security and AI.

• • Our highly skilled employees

establishing competitive advantage

and adding value to our customers in

an increasingly digital age.

How we stress-tested

ourbusiness

We have carried out the stress tests

detailed below to evaluate our viability

byconsidering our current and future

strategies and the potential financial

impacts of our stated principal risks.

Theprincipal risks were considered in the

context of global political and economic

factors, including the continued

uncertainty around the crises in Ukraine

and the Middle East and potential

disruption caused by new tariffs.

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.

The likelihood of such a realisation

threatening BTG’s viability is 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.

Annual Report and Accounts 2025

STRATEGIC REPORT

Viability statement continued

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 2027,

extended until 28 February 2029

• • 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2026)

• • 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 2026)

• • 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 2026, freezing future pay

from March 2027 (given current year

rises are already committed) and

freezing rises in general overheads

from March 2027

• • Full mitigation measures – in addition

to all the partial measures, these

measures modelled additional

headcount reductions from March

2027, 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 88 to 91.

The Board approved the strategic

report on pages 1 to 76 of this

Annual Report on 11 May 2026.

Patrick De Smedt

Chair

11 May 2026

76 Bytes Technology Group plc

DISCLOSURE STATEMENTS

Governance report

78 Chair’s introduction to corporategovernance

80 Board of directors

83 Executive Committee

84 The Board’s year

88 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

129 Directors’ report

133 Statement of directors’ responsibilities

Delivering sustainable success through

the right culture and behaviours.

Annual Report and Accounts 2025

26 77

GOVERNANCE REPORT

Chair’s introduction to

corporategovernance

This year the Board focused on

supporting and challenging the

executive on strategy, developing

our directors and BTG’s senior

leaders, strengthening governance

and engaging with stakeholders.

Supporting and challenging the BTG executive

onstrategy is a central part of our role. We discuss

Group strategy at every Board meeting and, with the

businesses’ senior leaders, at our annual strategy day.

Scrutiny of the strategy was particularly important this

year, following the decrease in operating profit for the

full year. As indicated during the year, this decrease

reflected changes to Microsoft’s partner incentive

structure and a period of adjustment following the

realignment of Bytes’s private sector sales team.

The Board worked with CFO Andrew Holden

tounderstand the operating profit decline, and

scrutinised the underlying detail. As well as our

ongoing oversight role, during the second half of

2025/26 we increased our contact with the executive

directors and the Bytes MD outside of Board meetings,

regularly and rigorously reviewed Bytes’s ongoing

financial performance, and introduced a Board

dashboard to track progress at Bytes – including

howits management team continued to embed the

sales reorganisation and operational adjustments

inresponse to the changes in incentive structures.

I was pleased by the decisive response of the executive

directors to the interim results. Andrew now works

more closely with Bytes’s leaders and finance team

inscrutinising the business’s performance, to ensure

future forecasts are more accurate. There is also closer

collaboration between Bytes’s sales and accounting

teams. Meanwhile, CEO Sam Mudd is working with

Bytes’s sales teams to ensure they meet customer

needs most effectively and maximise sales,

particularlyin services.

The right strategy for BTG

Notwithstanding the difficulties of the first half year,

webelieve that BTG’s strategy, as summarised below,

is right for the company. That is:

• • Investing in key technologies, particularly AI,

cloudmigration, hybrid cloud and security

• • Continued investment in services, to build on

BTG’sbedrock in software sales and to expand

itsservices offering

• • Nurturing the Group’s positive culture and

continuing to develop the leadership skills of

oursenior managers as the Group grows.

Embedding a strong culture across BTG

BTG’s strong culture is fundamental to the Group’s

strategy and success. Supporting Sam in embedding

acommon culture across BTG is one of the key

responsibilities of our Chief People Officer, Kally

Kang-Kersey, who was appointed during the year.

One of the first steps in this programme will be the

development of a values framework, based on a

fact-finding review of values company-wide. Kally

outlined her thoughts on, and recommendations for,

our culture, when she addressed the Board in October

on her first 100 days in office. She also shared her

views on such important areas as BTG’s leadership

andperformance, talent and capability, and talent

acquisition, succession and retention.

Board engagement with employees

andinvestors

The Board widened its engagement with employees

this year. The Board, alongside Sam, presented at town

hall events at Phoenix’s Pocklington office and Bytes’s

Leatherhead base. We were pleased by the active

participation of employees in the Q&As that followed

our presentations. Aside from these all-hands

meetings, for the first time this year, each of our

non-executive directors chaired at least one employee

forum, alongside meeting many other BTG people at

independent visits to Group locations. Reflecting her

role as designated non-executive director for

employee engagement, Shruthi Chindalur was

particularly active in engaging with theworkforce.

After the July AGM statement, we engaged with several

investors about our business performance andthe

plans in place for regaining momentum in the second

half of the year, demonstrating the clarity and rigour of

our approach.

The Board considered the investor feedback, with

inputfrom BTG’s investor relations team, brokers and

PR advisors.

78 Bytes Technology Group plc

GOVERNANCE REPORT

Upholding good governance

The Board is committed to good corporate governance

and to aligning BTG with regulation. In 2025/26, we

continued to meet the requirements of the revised

UKCorporate Governance Code, and continued to

prepare for provision 29. This requires company

boards to review their material internal controls

anddeclare on their effectiveness. We are working

withourinternal and external auditors, PwC and EY

respectively, to assess and, where necessary,

strengthen our operational, financial and corporate

reporting control systems. I am confident that we will

be able to report positively on Group controls at the

end of the 2026/27 financial year, when provision 29

will apply to BTG.

Keeping Board members abreast of changing

governance requirements and reminding them of

theirregulatory responsibilities is central to good

governance. We continued to prioritise governance

training and education for directors through guidance

from our external advisors and support through BTG’s

internal processes.

Enhanced succession planning

Ensuring that the business has leaders with the right

skills, now and in the future, is core to BTG’s strategy.

During the year, we extended our succession-planning

process for both the Board and our senior

management tier. BTG will continue to evolve this

process for the wider business during 2026/27, for

example, by ensuring that women and neurodiverse

candidates are fairly represented.

Senior leadership development will become even more

important as BTG continues to grow. I am pleased with

the steps that Sam, Kally and the wider leadership team

are taking in this area. Milestones this year included a

Group-wide talent review to identify development

needs, gaps and succession opportunities and the

evolution of leadership programmes at Bytes and

Phoenix. In 2026/27, to encourage collaboration,

common values and consistency across BTG, the

Group will begin to hold development events involving

leaders from both businesses.

Our ESG Committee’s first full year

Our committees continued to do good work on behalf

of the Board. 2025/26 was the first full year of our ESG

Committee, which monitors BTG’s progress against its

ESG targets and helps manage related risks and

opportunities. Having regular director updates on

BTG’s ESG performance has strengthened our

oversight of this important area. Reflecting the strong

emphasis on people in ESG, Kally is regularly invited to

attend committee meetings.

During the year, I was pleased at the progress the

Group made against its ESG targets. Furthering its

netzero transition plan, BTG gained EcoVadis silver

medals across the Group and enhanced those ESG

disclosures that are aligned with TCFD. It is testimony

to the hard work of people across the business that,

inJuly 2025, BTG’s strong ESG practices enabled

thecompany to join the FTSE4Good Index Series.

Our Board composition

The diversity of Board members contributes to our

collective wisdom and the strength of our debate. In

2025/26 women made up 57% of the Board, exceeding

the Financial Conduct Authority (FCA) listing rules

target of 40%; two of our senior roles were held by

women and two members came from ethnic minority

backgrounds, in both cases surpassing the FCA’s

requirements.

The strength and effectiveness of the Board team

wasvalidated by the largely positive feedback from

Lintstock in this year’s external review, and will enable

us in 2026/27 to continue to help BTG achieve its

fullpotential.

More detail is set out on page 87, and I look forward

toreporting back to you next year on ourprogress.

Patrick De Smedt

Chair

11 May 2026

Annual Report and Accounts 2025

26 79

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

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

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

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

Appointed 1 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, Wilmington plc

Committees Audit, Nomination, Remuneration, ESG

Chair

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GOVERNANCE REPORT

Shruthi Chindalur Independent non-executive director Nationality Indian

Appointed 1 February 2024

Shruthi has 25 years’ experience in technology, SaaS (software as a service) and advertising

technology. She has held senior commercial and operational roles at Oracle, LinkedIn and Criteo

covering various global markets and sectors. She recently held a non-executive director role for

four years at The Access Group, a leading provider of business management software to small

and mid-sized organisations globally.

External board appointments Kainos Group plc, Pinewood Technologies Group plc,

IrishResidential Properties REIT plc (from 28 May 2026)

Committees Audit, Nomination, Remuneration, ESG

Ross Paterson Independent non-executive director Nationality British

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 250 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

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 is also chair of its remuneration committee.

External board appointments Videndum plc

Committees Audit, Nomination, Remuneration, ESG

Board changes

There were no changes to the Board during the financial year.

Read the full

biographies

Annual Report and Accounts 2025

26 81

GOVERNANCE REPORT

Board of directors continued

Board attendance*

Board member

For the financial year to

28 February 2026

Patrick De Smedt 15/15

Sam Mudd 15/15

Andrew Holden 15/15

Erika Schraner

14/15

Shruthi Chindalur 15/15

Ross Paterson 15/15

Anna Vikström Persson 15/15

1 Erika Schraner was absent from the April 2025 meeting because of hospitalisation.

Board composition at

28 February 2026

Independent non-executive Chair¹

Independent non-executive directors

Executive directors

Gender split of directors at

28/29 February

57%

50%

57%

29%

Target 40%

2024

2023

2026

2025

Men Women

Ethnic diversity of directors at

28 February

29%

2026

2025

White British or other White

Asian/Asian British

Directors’ collective skills

scoredout of 35

Strategy

Management

Technology

Finance

Operations

People/HR

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

intheNomination Committee report on pages 102 to 105.

1 At time of appointment.

Directors scored themselves out of five for each skill.

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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 80.

Sam Mudd Chief Executive Officer Andrew Holden Chief Financial Officer

Clare Metcalfe MD Phoenix Software Nationality British

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 became MD Phoenix in 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.

Kally Kang-Kersey Chief People Officer Nationality British

Appointed as CPO 14 July 2025

Kally is an experienced HR leader with more than 20 years’ experience in the

technology sector, having worked with leading organisations including Xerox,

Zebra Technologies and essensys. As Chief People Officer at BTG, Kally drives

the people strategy to enable scalable growth, customer excellence and a

high-performance culture.

She is recognised for championing diversity, equity and inclusion initiatives and

for creating learning cultures that develop leaders of the future. A skilled coach

and mentor, Kally brings expertise in cultural transformation, talent development

and M&A integration.

Other Executive Committee members in 2025/26

Jack Watson left as MD Bytes Software Services in March 2026.

Annual Report and Accounts 2025

26 83

GOVERNANCE REPORT

The Board’s year

Attracting and keeping

the best people

BTG is a people business. Having highly skilled and

expertpeople gives vendors confidence in us to sell

theirproducts and to deliver the high-quality service

ourcustomers demand.

When we support our team members’ long-term growth,

wereinforce the expertise and trusted customer connections

that make our business successful. So, ensuring that the

Grouppursues recruitment and retention effectively is a key

focus formanagement and the Board.

We remain pleased with BTG’s efforts to create a positive

working environment that people want to join and where they

want to stay. In 2025/26, for example, the Group improved

itsrecruitment systems and processes and, to lead the

development of a long-term HR strategy, recruited a CPO.

Great Place to Work ratings remain high

External measures show these efforts are paying off: BTG’s

employee net promoter score and Phoenix’s and Bytes’s

rankings in the Great Place to Work surveys remain well

aboveaverage.

But with ongoing competition for technology skills, the

Groupmust continue to raise its game. The Audit Committee

commissioned PwC to assess BTG’s recruitment and retention

processes. PwC, which acts as the Group’s internal auditor,

looked to:

• • Evaluate the efficiency and effectiveness of BTG’s

recruitment process

• • Ensure compliance with legislation and internal HR policies

• • Assess the alignment of BTG’s recruitment strategies with

itsgoals and workforce planning needs

• • Identify opportunities for improving recruitment quality,

enhancing the experience of candidates and reducing

thenumber of people who leave during their

probationaryperiod.

In carrying out its review, PwC assessed the quality of the

company’s end-to-end HR practices, from the KPIs used

tomonitor retention to the exit interview data received.

For more details on our Audit Committee’s

work,see pages 92 to 101.

PwC reported on its findings to the March 2026 Audit

Committee meeting. It concluded that while the company

benefits from experienced teams and established systems,

there were areas for more improvement. These included the

useof improved data and onboarding processes and the

management of attrition rates in new hires.

The Board, through the Audit Committee, will monitor these

areas in the wider context of ensuring that BTG’s recruitment

model, workforce planning, pay governance and related

processes continue to develop in line with the company’s

growth rate.

When we support our team

members’ long-term growth, we

reinforce the expertise and trusted

customer connections that make

our business successful. We remain

pleased with BTG’s efforts to create

a positive working environment that

people want to join and where they

want to stay.

Patrick De Smedt

Chair

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Ensuring every voice

strengthens BTG

Employee engagement is one of our strategic levers for

performance, retention and sustainable value creation,

says Shruthi Chindalur, our designated non-executive

director for employee engagement. Here, Shruthi

reflects on how, at BTG, engagement is not just an

initiative but part of the foundation of the business.

My role is to help the Board stay alert to employee culture,

risk and sentiment and to ensure that employee insights

inform our strategic decision making. I see my responsibility

as making sure that:

• • The Board hears the unfiltered voice of our people

• • Employees see tangible evidence that their voice

influences decisions.

When those two conditions are met, engagement becomes

acompetitive advantage.

Hearing the organisation – directly and honestly

During 2025/26, in close partnership with our CPO, Kally

Kang-Kersey, we evolved our employee forum programme to

ensure broader representation and encourage deeper candour.

We widened participation to include senior leaders, HR and

finance teams, and sales colleagues. This helped ensure

diversity of geography, function and tenure. Sessions were

kept small and confidential so that people felt safe and to

encourage open dialogue.

During the year, several of our non-executive directors joined

me in leading the employee forums. This fulfilled our 2024/25

Board commitment to increase the visibility of non-executive

directors to employees and to expose them more directly to

employee sentiment. This change has strengthened the

Board’s understanding of BTG’s organisational health,

supporting survey data and executive summaries.

At the forums, employees provided thoughtful, constructive

and candid feedback, which we are using to shape Board

actions for 2026/27. Following discussion of employee

opinions at Board level, in consultation with the CPO,

weagreed that BTG should focus on three priority areas:

• • A comprehensive review of reward and benefits

• • Strengthening change management and internal

communications

• • Investment in leadership capability and cultural

consistency.

The executive team has committed to progress each of

theseareas, with the Board’s full support.

Closing the loop – from listening to impact

Establishing a ‘structured feedback loop’ between the

workforce and the Board – so that employees know what

effect their feedback has – was one of our four non-executive

director principles for 2025/26.

Employees usually disengage because they see no

outcome, not because they are unheard. Visible follow-

through helps increase engagement. Historically, we have

not had a systematic way of reporting back to forum

participants – a gap that risked undermining trust. To

address this, Kally and I have developed a structured

communications framework, which we will launch in 2026/27.

The framework is built around a simple principle: You said.

We heard. We did. It will include aspects such as:

• • All-employee updates from me as designated

non-executive director

• • Team cascade materials for managers

• • Town halls and Q&A sessions.

Crucially, it will also aim to explain where possible what

feedback has not resulted in change – and why. We believe

such transparency will build credibility.

Building long-term trust

Encouragingly, the confidence of participants in our forums

is increasing. Employees are more open, direct and willing

tochallenge constructively. This is a positive signal that they

feel safe and that our organisation is maturing.

By strengthening our listening mechanisms and formalising

feedback loops, we are embedding a culture where

employees understand that their voice shapes BTG’s future

– and where the Board is demonstrably accountable for

acting on what it hears.

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GOVERNANCE REPORT

The Board’s year continued

Developing our skills and succession

planning process

Ensuring a smooth transition when a non-executive

director leaves is essential to maintaining the

effectiveness of our Board.

In 2025/26, our Nomination Committee continued to

develop the Board’s succession planning process to

ensure that, if a non-executive director leaves, they

canbe replaced by well-qualified individuals. As part

ofthis work, the committee identified which sitting BTG

non-executive director could best take the place of each

committee chair and of the designated non-executive

director for employee engagement, if they were to

leave.We made these choices based on the relevant

experience of each non-executive director.

Our Board succession planning is a contingency

measure. Our clarity about what we are looking for in our

non-executive directors, and our established relationship

with our executive search partner, means we are well

placed if a non-executive director does step down.

Theinformal networks that our Board members maintain

also provide a rich pool of potential future candidates.

Broadening future leaders’ skills

The Board also oversaw the ongoing development of

future leaders’ skills this year. As part of this, the company

identifies successors for our senior leadership community,

in addition to the Bytes and Phoenix boards. Individuals

who have been identified as future leaders are developed

and given the opportunities to broaden their skills.

BTG will continue to evolve its skills and

successionplanning process during 2026/27,

drivenbyCPO Kally Kang-Kersey.

For more details, see our Nomination

Committee report on pages 102 to 105.

The right strategy

for BTG

Our annual strategy day again enabled the

Board to challenge the business on the nature

and implementation of the Group’s strategy.

BTG’s strategy – which focuses on investing in key

technologies, particularly data, AI, cloud migration

and cybersecurity, expanding and investing in its

services offering, and maintaining the Group’s

positive culture and the effective development of

senior managers – is always on the Board meeting

agenda. Having a full day to scrutinise and debate

these subjects, face-to-face with BTG’s senior

leaders, enables us to consider them more deeply.

The strategy day, held in central London, kicked off

with an overview of the Group’s performance by CEO

Sam Mudd and CFO Andrew Holden. This involved a

constructive review of the actions and initiatives taken

to improve operating profit performance. As part of

this, the Board and company leaders discussed the

alignment of the Group’s organisational structure

with its future growth objectives.

The other main item on the agenda was the Group’s

strategy on AI and services, both areas of strategic

focus and investment for BTG. Microsoft’s shift in

emphasis from software to services has made the

latter an even more crucial focus for the business.

Senior leadership teams from both Phoenix and

Bytes presented their distinctive but complementary

strategies on these two areas to the directors.

Following a day of robust and incisive discussion, the

Board maintained its conviction that BTG’s strategy

is right for the business and will enable continued

growth. However, given that the technology industry

changes rapidly, we will continue to consider the

appropriateness of all elements of Group strategy.

For more details, see Our strategy

onpage 7.

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External Board review

highlights areas of strength

The BTG Board was described as cohesive,

engagedand supportive in this year’s external

performance review.

How the performance review process worked

As part of our three-year evaluation cycle, this year board

effectiveness firm Lintstock – which has no connection with

BTG or any individual director – measured the Board against

its index of listed and private company boards.

Board members completed a tailored questionnaire from

Lintstock, reflecting on the year’s key events and on the

effectiveness of the Board, our committees and our Chair.

Lintstock also had one-to-one discussions with the directors

on their views.

In its review, Lintstock focused on the Board’s composition and

dynamics, strategic oversight, relationship with stakeholders

and the external environment, oversight of people and culture,

and the support for and management of meetings.

The Chair also held individual meetings with the directors

seeking their views on his effectiveness and that of the

Boardand the committees, while the senior independent

director held a group discussion with Board members to

gather their feedback.

What we learnt

Lintstock presented its conclusions and recommendations at

our March 2026 Board meeting. It said: ‘The composition of

the Board, the level of support provided, the management of

meetings, and the awareness of the external environment are

clear areas of strength.’

Against its company boards index, Lintstock found that the

BTG Board equalled or scored above the majority of relevant

metrics. It also commented positively on the discussion and

definition of strategy at Board meetings and the visibility of

internal leadership successors.

Lintstock evaluated BTG’s four Board committees too,

finding that each of them operated effectively.

Our 2026/27 priority areas

In 2026/27, to help BTG achieve its full potential, the Board

has agreed to continue to focus on:

• • Overseeing the Group’s delivery against its growth targets

• • Supporting and challenging the executive on the clarity

of our long-term strategy and strategy implementation

• • Ensuring the Board, and BTG’s leadership, have the

optimum skills and experience to achieve the Group’s

strategic ambitions

• • Strengthening stakeholder engagement

• • Ensuring that the Group continues to uphold high

standards of governance and internal controls

• • Providing effective oversight of ESG and sustainability

matters.

Reflecting on our 2025/26 priority areas

As part of our evaluation process, we also reflected on the

progress made against last year’s priority areas, against

which we have:

• • increased our contact with the executive and Bytes’s

management, and introduced a Board dashboard to

track progress, following the operating profit decrease

• • continued our work to comply with the revised UK Corporate

Governance Code, including preparing for provision 29

• • had regular contact with our shareholders to maintain our

external communication and engagement

• • continued to develop our Board and BTG succession

plans, and oversee initiatives to develop senior managers

and embed a positive culture Group-wide

• • undertaken ongoing governance training and education,

including through several non-executive leading

employee forums

• • regular discussions with the executive team inside and

outside the boardroom and at our annual strategy day

• • piloted an AI tool to help our committees in areas such as

benchmarking and data analysis, and commissioned an

AI governance and ethics framework.

The Board fosters a culture of trust and collaboration,

striking an effective balance between support and

constructive challenge. Executives feel able to surface

aspects openly and value the counsel they receive.

Lintstock

Annual Report and Accounts 2025

26 87

GOVERNANCE REPORT

Stakeholder engagement

(s.172 compliance)

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.

Our approach to Section 172

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 2025/26

Here we set out two principal decisions we

took in 2025/26, and how we considered

Section 172 matters in doing so.

Reaffirming BTG’s services strategy

Background

As part of its ongoing growth strategy,

BTG is placing a greater focus on

delivering more professional and IT

managed services, to complement the

solutions it sells. Although this is already

in line with the strategy of expanding

itsrange of services and increasing its

technical capabilities, there is a case

fordoing this at a faster pace, to help our

customers get the most out of the latest

technology and to adapt to changes in

vendor incentives.

Decision

The Board reviewed BTG’s services

strategy, given its strategic importance.

Welooked at whether it could be refined

to better articulate the customer value

proposition, and whether BTG had the

right people in the right places to give

effect to the strategy.

Outcome

Based on our review, we reaffirmed and

validated the services strategy. Providing

services brings customers closer to

thelatest technology – in particular

cybersecurity, cloud and AI solutions –

and has the advantage of delivering a

steady stream of income over annual

ormulti-year contracts, which benefits

investors and creates long-term

shareholder value.

Supporting the employee forums

programme

Background

Appointing a CPO last year gave renewed

momentum to the Group’s commitment

toembedding a positive and winning

culture across BTG, which now includes

aformalised programme of employee

forums. These are an opportunity for BTG

people to share their honest feedback of

working for the Group, and are overseen

by Shruthi Chindalur, our designated

non-executive director for employee

engagement.

Decision

The non-executive directors’ main role

atthese forums is to listen and observe.

So, to increase their engagement with

employees and contribute more deeply

tothe forum programme, this year we

looked at how they could directly support

Shruthi by leading individual employee

forums organised by diverse groups for

more voices.

Outcome

As a Board, we decided that having a

range of non-executive directors lead

theforums would better drive employee

engagement and allow us to hear the

voice of employees more directly and

clearly. By understanding the position

ofemployees, we can better help them

tosupport BTG’s customers and vendors,

which drives growth. It also gives us

anopportunity to promote positive

andconstructive discussion around

cultural themes.

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GOVERNANCE REPORT

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

• • Observations on the company’s strategic HR pillars

from BTG’s new Chief People Officer (CPO) after

her first 100 days in office.

• • The CPO’s blueprint for a company-wide

peoplestrategy that is aligned with its growth

ambitions, customer excellence goals and

high-performance culture.

• • Regular updates from the senior leadership

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.

• • Attending town halls at Bytes and Phoenix, and

supporting the non-executive director for employee

engagement by leading individual employee forums

to hear directly from employees and then

contributing to her reports back to the Board.

• • 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.

• • Assessment report from the company’s internal

auditors on BTG’s recruitment and retention

processes.

• • The CPO held a number of one-to-one and group

sessions with people from both businesses, giving

her an overview of the company and what is

important to employees.

• • 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 reviewed the findings and recommendations of

our internal auditor’s assessment of the quality of

the company’s end-to-end HR practices, and will

monitor these to ensure BTG’s recruitment model,

workforce planning, pay governance and related

processes continue to develop in line with its growth.

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.

Annual Report and Accounts 2025

26 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.

• • 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 and services

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,

including Microsoft, which again this year gave a

presentation to the Board.

• • 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.

• • Discussions between investors and the Board

Chair,CEO and CFO around the AGM statement, the

company’s related performance inthe first months

of the financial year, and the full-year outlook.

• • 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.

• • With the support of the company’s first Head of

Investor Relations, the CEO and CFO continued to

maintain and build strong engagement with our

shareholders in 2025/26.

Community and

environment

BTG recognises

that it is part of

thecommunities

inwhich it operates

and strives to make

a meaningful

contribution to a

sustainable future

• • 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 and targets, the

objectives of which cover both BTG’s operating

companies. This year briefings included updates on

the continued rollout of a carbon literacy awareness

programme, progress on the net zero transition plan

and increasing uptake of volunteer days.

• • Updates on key developments in the company’s

sustainability work, including becoming a

constituent of the FTSE4Good Index and improved

scores for some disclosures – such as EcoVadis

with continued disclosures through 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 support the company’s work providing youth

and adult education in technology, as part of its

social values initiatives.

• • We also support the company to continue working

to minimise its impact on the environment, including

recent refurbishments.

• • In response to management’s GHG emissions

reduction efforts, we continued to support a salary

sacrifice scheme to help employees participate in

an EV programme, which promotes reduced

emissions and cleaner air in our communities.

Annual Report and Accounts 2025

26 91

GOVERNANCE REPORT

Audit Committee report

Introduction from our Chair

This year, the Audit Committee continued to focus on ensuring the

Group had effective systems in place to manage its risks, internal

controls and external reporting, in line with evolving regulations.

As Chair of the Audit Committee, I am

pleased to present our Audit Committee

report for the financial year ended

28 February 2026 in accordance with

theUK Corporate Governance Code

(code). TheAudit Committee met each of

the responsibilities assigned by the code

inrespect of the year.

In some areas, 2025/26 was a relatively

quiet year for the Audit Committee given

no new regulation took effect that

materially affected our financial

statements and, with no significant

changes in operations, BTG’s principal

risks stayed largely the same. However,

we continued to prepare for forthcoming

reporting changes taking effect, and we

remained vigilant in respect of the

Group’s financial reporting following

revisions to our expected operating profit

for the year.

Ensuring internal control

effectiveness

In ensuring the effectiveness of BTG’s

internal controls, we focused on

preparing for provision 29 of the revised

code, which applies to BTG for its

year ending 28 February 2027. The code

states that the Board should monitor the

risk management and internal control

framework, carry out a review of its

effectiveness, and report on that in the

Annual Report. The Audit Committee will

provide guidance and recommendations

for that Board statement.

We are taking our provision 29

preparation seriously, both to remain

compliant with the code and as a useful

exercise to assess and, where necessary,

improve the robustness of our risk

management systems.

To ensure we are fully prepared for next

year’s declaration, we are preparing for a

‘dry run’. This involves assessing whether

we have completed all the steps to make

an affirmative declaration, such as

confirming when and how we will test all

material controls. The committee has

recently reviewed the Group’s principal

risks and management’s suggestion of

which internal controls are material as

part of progressing this exercise.

Overseeing new

accountingsystems

We assess the effectiveness of new

controls, as well as reviewing existing

ones. This year, this included oversight

ofplanned new accounting systems at

theGroup’s two businesses. Phoenix

introduced a new system during

2025/26as planned. In a post go-live

review, BTG’s internal auditors, PwC,

concluded that they were satisfied with

the way the system implementation had

been managed.

The go-live date for Bytes’s new finance

system was delayed until spring 2026

because it was not fully ready, a decision

that the Audit Committee supported. BTG

and our committee must be able to rely on

the integrity of the financial information

the business provides. We therefore felt

that Bytes should wait until the system

could be launched with confidence, even

though this incurred extra costs. The

committee agreed that the internal

auditors should review the new system

before and after it goes live.

We continued to prepare

for forthcoming reporting

changes taking effect,

and we remained vigilant

in respect of the Group’s

financial reporting

following revisions to

ourexpected operating

profit for the year.

Ross Paterson

92 Bytes Technology Group plc

GOVERNANCE REPORT

Preparing for new ESG regulation

We continued to oversee preparation for

the new sustainability reporting standards,

UK SRS S1 and S2. We believe that BTG is

in a good position to move to the new

reporting requirements, having fully

complied with the TCFD recommendations

in the 2024/25 Annual Report.

The committee continued to work closely

with the ESG Committee, established in

2024. Given Anna Vikström Persson, ESG

Committee Chair, and I are members of

both the Audit and ESG Committees aids

the close working of the two.

External audit

EY continued to provide BTG’s external

audit services, led by a new partner, Anup

Sodhi. Anup succeeded James Harris

who had completed five years in the role.

We were pleased by the smooth transition

under Anup’s leadership, which was

assisted by continuity in the core EY

auditteam.

During the year, the Group revised down

its expectation of operating profit for the

year. Considering this pressure on

profitability, and mindful of the pressures

that managers might feel to meet targets,

the committee asked EY to be particularly

attentive to the risk of ‘revenue

recognition misstatement’, including

ensuring that any revenue received

around the year-end was reflected in the

correct financial year.

We again carried out an evaluation of EY,

in line with the Financial Reporting

Council’s (FRC) Audit Committees and

the External Audit: Minimum Standard.

This non-mandatory standard asks audit

committees to consider their auditor’s

culture (beside technical factors, such

asthe skill, quality and robustness of

theaudit). We agreed that we remain

confident in EY’s independence,

effectiveness and ability to provide

rigorous review and challenge.

The committee recommended that

theBoard presents a resolution to

shareholders to reappoint EY for 2026/27.

We approved EY’s work plans and

estimated fees for 2025/26 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 2024/25, ison page 97.

Internal audit

PwC continued to provide internal audit

services on BTG’s behalf, looking at both

traditional and less conventional areas.

The former included reviewing Phoenix’s

new accounting system and reporting on

company-level controls, while the latter

involved a review of BTG’s recruitment

and retention practices. Attracting and

keeping the right people isa principal risk

for BTG, particularly on the sales side.

PwC used HR experts to assess the

quality of company processes, from the

KPIs used to monitor retention tothe exit

interview data received. PwC’s

recommendations included developing a

group-wide workforce and recruitment

strategy andplan, updating and

formalising the recruitment processes,

and developing standardised reporting of

qualitative and quantitative metrics.

We continue to be satisfied with PwC’s

internal audit provision. As BTG grows

and evolves, we will naturally review what

is the best model for the company’s

internal assurance function.

The committee continued to meet our

internal and external auditors without BTG

management present. Nothing significant

emerged in these discussions, but they

provided the opportunity for EY and PwC

to speak more freely than they might

otherwise have done.

The widening remit of

auditcommittees

In the coming year, the committee will

continue to work to provide effective

oversight over the internal controls and

systems that manage BTG’s risks, to

retain shareholder trust and help the

Group achieve its strategic ambitions.

Ross Paterson

Audit Committee Chair

11 May 2026

Annual Report and Accounts 2025

26 93

GOVERNANCE REPORT

Audit Committee report continued

Significant issues considered in relation to the financial statements

The committee considered the following significant issues, areas of judgement and estimation uncertainties in relation to the half-year

financial statements for the six months ended 31 August 2025 and the financial statements for the year ended 28 February 2026.

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 had been introduced.

The committee also considered the work done

by the auditors on revenue recognition, and the

results of that work. Given pressure on the

Group’s profitability during the year, the

committee challenged both management and

the auditors to remain alert to any pressure on

managers to inappropriately accelerate

recognition of revenue.

The Board received detailed monthly reports

from management on business performance,

which included 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.

Accounting for

share-based payment

(SBP) expense

Assessment of

appropriateness of the

SBP charged to the

income statement for

thefinancial year

The Group has unvested

Performance Share Plans

(PSP) in progress at the end

of the financial year, the

outcome of which will be

determined by adjusted or

unadjusted earnings per

share (EPS) and total

shareholder return (TSR)

forthe current and future

reporting periods.

Given the uncertainty in

relation to the achievement

of the EPS and TSR

performance targets,

management has applied

judgement in assessing

thelikely increase in

forfeiture rates and hence

the likely reduction in the

number of optionsthat will

vest on completion of the

relevant performance

periods, and made

adjustments to reduce

theSBP charge and

associated employers

National Insurance (NI)

accrual accordingly.

The committee reviewed and discussed with

management its assessment, noting key

considerations that:

• • for the 2023 PSP the outcome is materially

known following the end of the performance

period at 28 February 2026 and the

adjustment to SBP reflects this

• • for the subsequent PSP from 2024 and 2025

a reasonable forecast and adjustment to the

SBP has been made, allowing for some

inherent uncertainty.

The committee concluded

that the Group has

correctly interpreted and

applied the requirements of

IFRS 2 to apply judgement

in estimating the likely level

of options vesting in the

future and in determining

the SBP expense for 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consistently applied, 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 2025/26 and

approved the new plan for 2026/27

• • Reviewed the progress around

implementing the new accounting

system in Bytes ahead of it going live

in 2026/27, and the implementation

ofthe upgraded accounting system in

Phoenix, which went live in April 2025

• • Reviewed the Annual Report and

Accounts 2025/26 and half-year

results for the six months to

31 August2025.

Membership

The Audit Committee comprises four

independent non-executive directors:

Ross Paterson (Chair of the committee),

Shruthi Chindalur, Erika Schraner and

Anna Vikström Persson.

Ross is a qualified chartered accountant

with recent and relevant financial

experience from listed-company finance

and audit committee roles, including as a

chief financial officer of a listed company

and as an audit committee chair at two

other listed companies. Erika has recent

relevant financial experience from her

previous executive work and her roles

aschair of the audit committee of

UK-listed companies.

BTG operates in the technology sector,

and the committee as a whole has

competence relevant to that sector. Erika,

Shruthi and Anna each has considerable

technology sector experience, while Ross

is a non-executive director and chair of

the audit and risk committee at another

listed software company.

Biographies for all the committee

members are set out on pages 80 to 81.

The Chair of the committee will be

available for questions at BTG’s 2026

Annual General Meeting.

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 2025/26, we met six 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.

Our committee has reviewed and

approved its terms of reference, which

were last updated on 12 March 2026 and

are available on the company’s website

atbytesplc.com. We have also agreed a

schedule of items for each of our planned

meetings for the 2026/27 financial year,

with two of these dedicated to risk

management.

Committee attendance

Committee member

For the financial year to

28 February 2026

Ross Paterson 6/6

Erika Schraner

5/6

Shruthi Chindalur 6/6

Anna Vikström Persson 6/6

1 Erika Schraner was absent from the April 2025 meeting

because of hospitalisation.

Annual Report and Accounts 2025

26 95

GOVERNANCE REPORT

Audit Committee report continued

Responsibilities

During the year, the Audit Committee

reviewed its current practices against the

FRC’s Audit Committees and the External

Audit: Minimum Standard, and confirmed

that the committee follows the Minimum

Standard in full.

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 and its half-year and annual

financial statements

• • 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 continual 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.

Other responsibilities

As well as these responsibilities, the

committee:

• • Supports the Board in discharging its

responsibilities to comply with the UK

Corporate Governance 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 delivery 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 2025/26, 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 committee papers in advance

and, during the year, the committee met

with EY without management present.

Outside formal meetings, EY’s audit

partners, initially James Harris in relation

to the completion of the 2024/25 audit,

and subsequently Anup Sodhi (who

replaced James at the commencement of

the 2025/26 audit), had direct access to

the committee Chair throughout the year

and on an ongoing basis, to raise any

matters of concern or clarification.

In addition, two workshop sessions were

held during the year between BTG’s

finance team and the external auditor

– both 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 2025/26 audit.

Our committee approved EY’s fees for the

external audit with the total audit fee

reducing by 2.6% from £765,367 in

2024/25 to £745,515 in 2025/26,

reflecting an inflationary rise in EY’s

underlying costs on the one hand, but

offset by a reduction in non-recurring

costs and efficiency savings based on

previous years’ learnings and continual

improvement in the audit process.

96 Bytes Technology Group plc

GOVERNANCE REPORT

The committee assesses the quality,

effectiveness, objectivity and

independence of EY’s annual audit, and

seeks feedback from the Board, finance

management and the external audit team.

Audit quality is assessed with reference to

the quality and clarity of reports from EY

to the committee, the results of any recent

FRC Audit Quality Reviews, the

experience of audit team members,

feedback from BTG management and

other relevant factors. 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2026 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 6.8:1 (2024/25: 7.3:1), and non-audit

services in the year were 12.9% (2024/25:

12.1%) compared with the cap of 70%.

The committee is satisfied that the level

and nature of non-audit services does not

compromise EY’s independence, noting

that the only non-audit services for the

past two years are for assurance services

in relation to the half-year financial

statements and for which the fees are

relatively modest compared to the

auditfees.

Audit risks and areas of focus

As part of its audit planning process,

EYadvised our committee of the key

auditmatters and risks and other areas

ofaudit focus.

Key audit matters

• • 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

Key audit risks

• • Misstatement of rebate receivable at

period end and recognition of vendor

incentives

• • Going concern and viability

• • Accounting for share-based payments

• • Impairment of goodwill

Other areas of audit focus

• • Share buyback

• • Data migration

• • Provision 29

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. In light of our

assessment of the external auditor’s

effectiveness, we recommended to the

Board, which, in turn will recommend to

shareholders in a resolution at our 2026

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.

Thecommittee noted the safeguards to

EY’s independence as external auditor

included BTG’s policy on the payment

ofnon-audit fees to the external auditor,

as explained earlier in this report. This

requires the external auditor to make a

statement confirming its independence

atleast annually, mandatory audit tender

and rotation requirements, mandatory

audit partner rotation requirements,

restrictions on former audit team

members working at BTG and other

applicable requirements of the FRC’s

Ethical Standard, EU Audit Regulation

(retained in UK law) and the UK Corporate

Governance Code.

External auditor fees

2025/26 2024/25

Consolidated Group and parent company audits £303,534 £332,789

Subsidiary audits £441,981 £432,789

Total audit fees £745,515 £765,367

Half-year review (non-audit services) £110,427 £105,169

Total fees £855,942 £870,536

Annual Report and Accounts 2025

26 97

GOVERNANCE REPORT

Audit Committee report continued

BTG last tendered its audit in anticipation

of its initial public offering in 2020 and EY

was appointed BTG’s auditor for the

year ended 28 February 2021. EY has

now audited BTG for six years. James

Harris was the EY audit engagement

partner for the audit of each of the five

years ended 28 February 2025. Anup

Sodhi was the EY audit engagement

partner for the audit of the year ended

28 February 2026. As a FTSE 350

company, BTG must tender its audit

everyten years, and we therefore plan

toundertake an audit tender no later than

for the year ending 28 February 2031.

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.

The committee reviewed the

effectiveness of BTG’s system of internal

financial controls with reference to

reports from management and from

theinternal and external auditors.

In reviewing the risk management

systems, the committee considered

BTG’s enterprise risk management policy,

enterprise risk management framework,

risk appetite framework, and the Group’s

risk register. The committee noted that

there were no substantial changes to

those over the past year.

The committee also considered reports

from management, the internal auditors,

other specialists in specific matters such

as fraud risk, and the external auditors.

Inrelation to fraud risk, the committee

considered the work of a specialist that

reviewed BTG’s procedures to manage

the risk of fraud, taking account of the

new UK corporate criminal offence of

failure to prevent fraud. The committee

also reviewed management’s plans to

continue to enhance controls to

preventfraud.

Any control weaknesses or deficiencies

that are identified are monitored and

addressed in the normal course of

business. The committee receives

regularupdates on the status of

addressing actions suggested by the

internal auditors.

For more on our risks and mitigation and

our risk management framework, see the

Risk report on pages 32 to 43. To gain a

comprehensive understanding of the risks

facing the business and management,

thecommittee periodically receives

presentations from senior managers

andexternal advisors.

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35.

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 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 was

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. An

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.

98 Bytes Technology Group plc

GOVERNANCE REPORT

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 during the year, 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.

For 2026/27, the Board, on 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 supply chain

constraints and geopolitical

uncertainty – given their significant

impact on the global economy,

customer behaviours and associated

cash flows

• • 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.

Going concern and viability

statements

The committee considered BTG’s going

concern assessment and the basis of

preparation, including the period for

which going concern was assessed,

noting that no material uncertainties

wereidentified. The committee also

considered BTG’s viability statement,

including the time horizon chosen,

thestress-testing undertaken and the

conclusions reached. We 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 2027 for

going concern and for the three years

to February 2029 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 132 of the Directors’

report, and our Viability statement, on

pages 75 to 76 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 fourth 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. PwC reports to the

Audit Committee in its capacity as BTG’s

internal auditor.

The committee approved the internal

audit plan for 2025/26, designed to

support BTG’s organisational objectives

and priorities and to identify the risks that

could prevent the Group from meeting

those objectives.

PwC completed four audit reviews across

the Group covering:

• • Budgeting and forecasting

• • Sage post go-live review

• • Company-level controls

• • Recruitment review.

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.

Following up on internal

auditreviews

The committee receives reports on

internal audit activity 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 2026/27. It includes planned

reviews covering:

• • Cybersecurity – identity and access

management

• • Oracle NetSuite implementation (new

accounting system at Bytes)

• • Material controls – provision 29 and

fraud risk requirements

• • Next Gen platform implementation

(in-house developed enterprise

resource planning system at Bytes).

Annual Report and Accounts 2025

26 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. As part of that review,

committee members completed a

questionnaire, as did a number of the

Group’s people who had responsibility for

areas reviewed by the internal auditors

over the past few years. We also

considered the views of the internal audit

team. The review looked at several areas,

including the expertise of PwC’s team, the

depth and breadth of our internal audits,

and the quality ofplanning.

The committee considered the adequacy

of the resources within internal audit and,

in discussion with PwC, concluded that

the level of resources and internal audit

work was appropriate for a group of BTG’s

size and complexity.

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 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.

During the year, the committee met

withthe internal auditors, without

management present.

Reporting

As part of BTG’s financial reporting cycle,

it is the committee’s responsibility to

review the quality, integrity 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,

noting that there were no significant

changes to those policies for 2025/26

and that they had been applied

consistently

• • 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 reviewed whether this

Annual Report, taken as a whole, is fair,

balanced and understandable, and

advised the Board accordingly on its

statement on 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 and coherent

• • 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.

Review of the Audit Committee’s

effectiveness

The company engaged Lintstock during

2025/26 to undertake an independent

review of the effectiveness of the Board

and its committees. As part of that review,

Audit Committee members completed a

questionnaire provided by Lintstock in

respect of the committee’s effectiveness,

and each committee member had an

individual discussion with Lintstock. At the

committee’s meeting in March 2026, we

considered a report from Lintstock and

concluded that the committee was

effective, with strong oversight of internal

and external audit, financial integrity, risk

management and control. Based on

Lintstock’s observations, a number of

actions were identified.

Looking forward

During 2026/27, 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

• • Monitoring progress on the

implementation of the new

systemsinBytes

• • 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 response to the

newEconomic Crime and Corporate

Transparency Act 2023 (ECCTA)

regulations, which became effective

from September 2025

• • Reviewing the external audit strategy

coming into EY’s seventh 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 2025

26 101

GOVERNANCE REPORT

Nomination Committee report

Introduction from our Chair

This year the Nomination Committee worked to ensure the Board had the

optimum skills and experience to support and challenge the executives

and that BTG had leaders of the right calibre to grow the business.

Recognition from the

FTSE Women Leaders

Review this year reflects

our long-standing belief

that diverse leadership

teams make better

decisions and drive

stronger business

outcomes.

Patrick De Smedt

The Nomination Committee, and the

Board, continued to benefit from the

strength of its composition: Ross

Paterson has a long track record in

finance and M&A; Erika Schraner also has

a strong background in these areas,

along with expertise in technology and

strategic analysis; Shruthi Chindalur has

deep commercial and international roots

in the technology sector, and Anna

Vikström Persson is a former FTSE 100

chief HR officer. Our executive directors

complement these strengths, with CEO

Sam Mudd having been a technology

leader for more than two decades and

CFO Andrew Holden being deeply

experienced in finance, strategy and

operations.

This year the 2026 FTSE Women Leaders

Review recognised BTG as one of the ten

FTSE 250 companies with the highest

representation of women on their boards.

This recognition reflects our long-standing

belief that diverse leadership teams make

better decisions, drive stronger business

outcomes and help create a culture

where everyone can succeed. I am

incredibly proud of the women across

BTG whose expertise, leadership and

ambition are shaping our business every

day. I’m equally committed to continuing

our work to grow representation across all

levels. There is still more to do, but this

milestone shows what progress is

possible when commitment is shared

across the organisation.

Keeping directors up to date with

evolving governance

During the year, the committee again

oversaw training and development

initiatives to augment Board members’

contributions to BTG. Keeping members

up to date with governance changes,

andfamiliar with their statutory

responsibilities, remains a particular

priority. All directors are signed up to the

Deloitte Academy, which offers briefings,

webinars and seminars on governance

and other Board-related matters.

Thisyear, members received updates

onthe new failure to prevent fraud

legislation, the revised UK Corporate

Governance Code, particularly on

developments around provision 29,

andongoing guidance on the Market

Abuse Regulations (MAR), from our legal

counsel Travers Smith. In relation to MAR,

directors – and other persons discharging

managerial responsibilities – are required

to carry out annual MAR-related training.

More widely, Board members had updates

on market and industry trends, both from

internal experts, such as BTG’s chief

technology officers, and from external

advisors. They also received reading

materials and seminar and webinar

invitations around topical issues,

suchascybersecurity and AI.

The committee also ensured that

directors maintained an in-depth

understanding of BTG’s business.

Forinstance, following on from their

comprehensive inductions on joining

BTGin 2024/25, Ross and Anna spent

time with operational leaders to learn

more about our value-added reseller

(VAR) and IT services market, and the

challenges and opportunities the Group

faces. Functional leaders also attended

the Board to brief members on their areas

of activity. Our Group Company Secretary

continued to record the governance and

development activity of all directors.

Nurturing BTG’s strong culture

BTG’s strong culture has always been the

bedrock of the company’s success.

During the year, the committee supported

Sam and our Chief People Officer (CPO),

Kally Kang-Kersey, in devising a

programme to align the culture of Phoenix

and Bytes. In 2026/27, underpinning this

work, BTG will develop a values framework

based on a survey of company values.

Our development remit extends beyond

the Board, to include BTG’s senior

leaders. To achieve the Group’s strategic

ambitions, senior managers must have

102 Bytes Technology Group plc

GOVERNANCE REPORT

the leadership capabilities to support

growth and enhance and reinforce BTG’s

strong culture. I am pleased with the

advances that the business made this

year. At Phoenix, a significant number

ofsenior managers completed its LEAP

leadership programme. Next year, to

ensure consistent leadership capability,

LEAP will be rolled out to all Phoenix

managers. Bytes continues to embed

values-led leadership and to develop

capability at all levels. In 2026/27, Bytes

will pilot a new leadership programme

among its most senior people before

implementing it more widely.

It is vital that our leaders learn from each

other. From next year, the Group will hold

development events involving senior

leaders from both Phoenix and Bytes.

This will encourage collaboration, good

practice-sharing and cohesion across the

company. While the Nomination

Committee is committed to BTG’s

leadership development, Anna has worked

particularly closely with Sam and Kally to

strengthen the offering across the Group.

Developing our succession

planning process

Succession planning is another

committee priority, which we discuss at

each meeting. This year, we expanded

our succession planning process for both

Board members and senior leaders. As

part of this process, we identify

candidates appropriate to each of our

committee chair positions and to our

designated non-executive director for

employee engagement. In addition, we

widened our Bytes and Phoenix

candidate focus to cover all senior

leadership functions, rather than only at

operational board level. We will continue

to evolve our succession planning

process during 2026/27.

As the Group expands and adapts to the

changing needs of vendors and

customers, it must grow its pool of

talented senior managers. The committee

helps to identify which strategically

significant roles are pressing and which

skills candidates will need to perform

them. Following such input, this year

Bytes appointed a new Services Director,

Paul Bartram, who will drive the extension

and expansion of the strategically

important services offering, and a new

Chief Marketing Officer, Candice Arnold.

I was very pleased that BTG’s process of

having the right people in the right roles

was strengthened this year by Kally’s

launch of a Group-wide talent review. This

review, which will continue into 2026/27,

will consider talent gaps, succession

opportunities and development needs

across the company’s management levels.

Mentoring senior leaders

Anna’s support for our new CPO is a

practical example of both how Board

expertise can be usefully channelled into

BTG and how working with the business

can inform our own discussions. However,

outside wisdom can also be

complementary – as I experienced during

my career at Microsoft, when I was

supported by a CEO mentor from another

leading company. During the year,

following discussion with the committee,

Sam began a mentoring arrangement

with a former PwC partner and strategist.

We have explored with her the possibility

of introducing mentoring partnerships for

other senior BTG leaders.

Having the right people in the right roles is

only one part of creating a strong

business; having the right organisation is

also essential. The committee supported

the Board in assessing whether BTG’s

business and functions are structured in

the best way to meet the needs of

customers and the interests of investors.

Our external board evaluation

This year, the committee oversaw

Lintstock’s external evaluation of the

Board and our committees. Our Board

members completed a Lintstock

questionnaire and individual discussions.

In addition, I met each director to get their

feedback on Board effectiveness, while

Erika, as our senior independent director,

led a discussion among Board members

to gather their opinions on my

effectiveness as Chair.

Lintstock presented its findings to the

Board at its March 2026 meeting. I was

pleased that its review highlighted the

quality of our Board’s composition and

the dynamics around the table. They

noted that the Board fosters a culture

oftrust and collaboration, striking an

effective balance between support

andconstructive challenge.

I am also pleased to report that Lintstock

found that the Nomination Committee

was operating effectively. In regard to

Board composition and non-executive

succession, it indicated that the Board

had engaged thoughtfully and considered

current needs, contingencies and

forward-looking considerations.

Lintstock also observed that while the

Board prioritises thoroughness and

careful deliberation to ensure sound

outcomes, there is an opportunity to

further enhance its agility in certain

instances. Such comments give us useful

pointers for improvement and, following

its presentation to the Board, our

committee drafted an action plan to

address their recommendations.

Looking ahead to 2026/27

To continue to support the Group’s

strategic ambitions, the committee’s

priorities for the coming year will be:

• • Continual succession planning at

senior management level. We will

strive to obtain a good understanding

of the pipeline and develop an action

plan to fill any gaps

• • Ongoing Board effectiveness,

including around governance

development

• • Strengthening development

programmes for senior managers,

around such areas as team leadership

• • Monitoring the evolution of BTG’s culture

• • Considering the optimum shape of the

organisation.

Patrick De Smedt

Nomination Committee Chair

11 May 2026

Annual Report and Accounts 2025

26 103

GOVERNANCE REPORT

Nomination Committee report continued

Committee attendance

Committee member

For the financial year to

28 February 2026

Patrick De Smedt 4/4

Erika Schraner 4/4

Shruthi Chindalur 4/4

Ross Paterson 4/4

Anna Vikström Persson 4/4

Succession

andleadership

development

for2026/27

Our committee will continue to

monitor its compliance with the

code and, with the Board, continue

to review succession plans to keep

building on the skills balance and

diversity across the business.

This will include:

• • Building on the breadth of our

directors’ skills as needed to

support BTG’s growth strategy

and maximise the potential of

the business

• • Continuing our Board-level

succession planning

processand our work on

thesuccession pipeline at

senior management level

• • Supporting our executives with

the ongoing development of the

leadership capabilities of the

wider senior management team

• • Supporting the ongoing

development of our

Boardmembers.

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.

For more details, see page 109.

Exceeding diversity expectations

Establishing a diverse leadership team

ultimately benefits our stakeholders

byenabling us to perform better. We

continue to make progress against or

exceed diversity recommendations,

aligned with our Board and senior

management diversity policy. This

includes the board elements of the

FTSEWomen Leaders Review.

Women represent 57% of our Board at

thedate of this report, which means we

continue to be 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 benefit from the diversity of thought

and mindset that we value so highly at

BTG. Our priority is to always have the

right person in the right role, however,

andthis will continue to inform our

futureappointments.

We also continue to grow representation

within and develop succession plans for

the company’s senior management. BTG

was recognised in the top 10 by the 2025

FTSE Women Leaders Review for our

representation of women on the Board.

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.

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Our Board and executive diversity data

The following table provides 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 40%

Women 4 57% 2 3 60%

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

Ethnicity

White British or other White

(including minority-white groups) 5 71% 4 4 80%

Mixed/multiple ethnic groups – – – – –

Asian/Asian British

2 29% – 1 20%

Black/African/Caribbean/

BlackBritish – – – – –

Other ethnic group, including Arab – – – – –

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

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 2025/26, we continued to evaluate

BTG’s succession planning for senior

leadership 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 gaps remain for natural

long-term successors.

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 out performance

reviews

This year, our external Board effectiveness

review was again performed by Lintstock,

in line with our three-year evaluation cycle.

Lintstock has no other connection with the

company or individual Board members.

Aswell as evaluating the Board, Lintstock

reviewed the performance of our Chair

and the Nomination, the Remuneration,

the Audit and the ESG Committees.

As part of the evaluation, directors were

required to complete a survey, providing

their views on a range of governance

matters. Lintstock then conducted

one-to-one interviews with each Board

member, and with the Group Company

Secretary. Lintstock provided its feedback

through a written report, followed by

briefings on the report’s key findings for

the Chair and senior independent director.

The senior independent director was also

separately briefed on the outcomes of the

Chair’s evaluation. In March 2026,

Lintstock presented its findings and

recommendations to the Board, setting

out the work for the year ahead to help us

achieve the actions identified.

Key areas of focus

The evaluation considered a broad range

of governance matters, including:

• • Engagement with strategy

• • Stakeholder engagement

• • Culture and talent management

• • Leadership development and

succession planning

• • Monitoring the external environment

• • Risk management and internal

controls

• • Board composition and diversity

• • Relationships between non-executive

directors and executives

• • Meeting management.

Outcomes from the evaluation

The evaluation concluded that the Board

and its committees operate effectively and

highlighted strong relationships between

the Chair, non-executive directors and the

executive team. It noted the strength of the

Board during a period of relative pressure.

Despite market volatility and operational

challenges, the Board remains cohesive,

engaged and supportive. The Board

engages constructively with BTG’s

strategic progress and growth plans, and

continues to illustrate clear confidence in

management and in the underlying quality

of the business.

Progress on implementing the findings

and recommendations of these reviews

ismade during 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 84 to 87.

Annual Report and Accounts 2025

26 105

GOVERNANCE REPORT

ESG Committee report

Introduction from our Chair

In its first full year, the ESG Committee supported the

business, and held it to account, in progressing and

meeting its ESG goals.

Overseeing key milestones

During the year, the committee oversaw

several ESG milestones. Within the

environmental pillar, these included the

establishment of targets and policies to

reduce BTG’s water use and waste, and

the completion of the first phase of the

Group’s plan to reach net zero by 2040,

which our committee formally approved

inMarch 2026.

Within the social pillar, Kally’s appointment

as CPO has brought dedicated HR

expertise to the Group andour committee.

In our first meeting after she joined for

example, the committee focused on

people and culture, with Kally feeding

back on her early impressions and

meetings with employees.

Embedding a winning culture

Appointing a CPO also gives renewed

momentum to the Group’s commitment to

embedding a positive and winning culture

across BTG. In 2025/26 our committee’s

contribution to culture included our

programme of employee forums, through

which BTG people share their honest

feedback of working for the Group.

Shruthi Chindalur, our designated

non-executive director for employee

engagement, and who reports to our

committee, oversees these forums.

This year, to increase directors’

engagement with the workforce, all

non-executive directors – rather than the

designated director alone – led individual

employee forums. While the non-

executive directors’ main role at the

forums is to listen and observe, when

meeting BTG people we also aim to

promote positive and constructive

discussion around cultural themes, such

as diversity of thought, ethnicity and

gender, as well as equity and inclusion.

The ESG Committee was established in

June 2024. Our main role is to add rigour

to BTG’s ESG processes: setting clear

targets, overseeing and monitoring

progress, and driving improvements in

data accuracy and reporting integrity.

Our remit covers three areas, central to

the Group’s ESG strategy:

• • Environmental – overseeing

performance and initiatives to meet

BTG’s GHG emissions reduction and

resource-use targets, including its net

zero transition plan

• • Social – overseeing BTG’s people,

culture and workforce matters, with a

strong emphasis on diversity, equity

and inclusion

• • Governance – overseeing BTG’s

business conduct, and identifying and

preparing for emerging sustainability

regulation and reporting

requirements.

Our non-executive directors serve as

committee members, with our meetings

routinely attended by CEO, Sam Mudd,

and CFO, Andrew Holden. BTG’s Group

Sustainability Manager, Lisa Prickett and,

since her appointment in July 2025, the

CPO, Kally Kang-Kersey, also attend

ourmeetings.

Trust is a cornerstone of a winning culture.

Those who participate in employee

forums must believe that their voices are

being heard. In 2025/26 our committee

approved a structured communications

programme – devised by our designated

director and our CPO, for launch next year

– that will ensure that employee forum

participants know what actions have

resulted from their feedback.

Having the CPO and the Group

Sustainability Manager at our meetings

has mutual benefits. It enables them to

draw on the experience and insights of,

and receive support and challenge from,

the committee members, each of whom

has a strong track record with a wide range

of companies. It also allows the non-

executive directors to stay informed about

the external ESG picture, by receiving

updates on regulatory change and its

impacts on company risk from functional

experts, and to develop a deeper

understanding of BTG’s own ESG activity.

Holding the business to account

This year, our committee’s oversight

activities included:

• • Monitoring BTG’s progress against

managing the risks identified in the

most recent internal ESG and talent

retention audits

• • Receiving updates on the rollout

andimpact of the employee carbon

literacy awareness programme,

whichaims to deepen understanding

of the causes and effects of climate

change and how individuals can limit

their impact

• • Overseeing the Speak-up programme

to ensure that it continues to operate

effectively.

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Continued external recognition

This year BTG again received external

recognition for its progress in ESG. This

included gaining silver medals across the

Group from sustainability management

system rating provider EcoVadis, with

both Bytes and Phoenix in the top 15%

ofits rated companies. In July 2025, BTG

became a constituent of the FTSE4Good

Index Series, which measures the

performance of companies demonstrating

strong and verifiable ESG practices.

BTG gained third-party assurance for the

first time on its GHG emissions, providing

a layer of integrity that was welcomed by

the committee.

In 2026/27, the company will take more

steps to communicate our ESG initiatives

and the significant achievements around

them, both within and outside the business.

Prioritising ESG

I am pleased how, in the committee’s

firstfull year, we have formalised and

advanced the Group’s approach to ESG.

Having a standalone committee gives

usdedicated time and a platform to

address ESG issues in more depth

thanwas possible at the main Board.

ESG Committee’s terms of reference

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 the Group

remains 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.

TheESG Committee complements the

work of other committees – for example,

the AuditCommittee oversees financial

KPIs and our committee has oversight of

non-financial indicators.

Geopolitical shifts have changed the

sentiment to ESG in some quarters.

However, integrating good ESG practice

into the business remains a priority for the

committee, our Board, our employees

and, I believe, our investors.

Priorities for the coming year

The coming year is likely to see regulatory

changes in ESG, both in the UK and

globally. The ESG Committee will

maintain close oversight of the regulatory

environment and ensure BTG is well

prepared to meet any new requirements.

As well as regulatory compliance, in

2026/27 our committee will focus on:

• • Advancing BTG’s net zero

transitionplan

• • Continuing to develop the environment

for employees to perform and prosper,

in particular recruiting and retaining

the right people, strong succession

planning and embedding a positive

and winning culture

• • Overseeing the ongoing assessment

of our supplier base to ensure it meets

the Group’s ethical and regulatory

standards, both to manage risk and

reinforce Group values.

I look forward to reporting to shareholders

in 2026/27 on what the ESG Committee

has delivered in the year.

Anna Vikström Persson

ESG Committee Chair

11 May 2026

Committee attendance

Committee member

For the financial year to

28 February 2026

Anna Vikström Persson 2/2

Patrick De Smedt 2/2

Erika Schraner 2/2

Shruthi Chindalur 2/2

Ross Paterson 2/2

Annual Report and Accounts 2025

26 107

GOVERNANCE REPORT

Compliance with the UK

CorporateGovernance Code

For the year ended 28 February 2026,

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. We continue to prepare for compliance

with provision 29, which is applicable for financial years

beginning on or after 1 January 2026.

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 84 to 87.

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 aware of 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.

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

making on pages 88 to 91.

E Workforce

engagement

Shruthi Chindalur is the designated non-executive director for employee engagement (see page 85).

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

either to one of our whistleblowing officers, 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 during this financial year.

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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 80 to 81. The

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

are set out on page 133 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 2026, our

Chair’s performance was appraised externally through our independent advisor, Lintstock, with

input from our senior independent director. This process was concluded in March 2026 and formed

part of our external Board effectiveness review during the year (see page 87).

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.

Annual Report and Accounts 2025

26 109

GOVERNANCE REPORT

Compliance with the UK CorporateGovernance Code continued

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 80 to 82.

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

renewed our 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 on its external Board and Chair evaluation

process, which consisted of tailored surveys and one-to-one discussions with Board members

andthe Group Company Secretary. Lintstock provided feedback to the Chair and the senior

independent director, and then presented its report for 2025/26 to the Board in March 2026.

TheBoard agreed actions for 2026/27 to continue to strengthen how it operates. The Chair and

Group Company Secretary are managing these actions, which we set out on page 87.

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.

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 35 to 43. We also set out

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 75 to 76).

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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. During 2025/26 and up to the

date of this report, our Remuneration Committee was constituted in line with the code.

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 with

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 applies 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 128 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 112 to 128.

Annual Report and Accounts 2025

26 111

GOVERNANCE REPORT

Directors’ remuneration report

Introduction from our Chair

Executive remuneration

should reflect overall

company performance

and shareholder

experience, in both

stronger and more

demanding years.

Dr Erika Schraner

2025/26 was a year in which BTG continued to evolve, while

navigating a number of external and operational factors.

Inthat context, the Remuneration Committee exercised

itsjudgement in determining outcomes for the year.

BTG entered 2025/26 in a position of

strength, with a clear strategy, strong

customer relationships and a track

recordof consistent growth since IPO.

The year that followed brought real

external and operational challenges,

including changes to Microsoft’s vendor

incentive programmes, more demanding

market conditions and a transition in the

private sector sales structure that took

time tobed in.

Operating profit did not reach the targets

set at thestart of the year, and the

Group’s expectations for operating profit

were revised down over the course of the

year. In this context, the committee

applied itsestablished remuneration

framework with discipline, ensuring that

outcomes appropriately reflected the

Group’s financial performance and the

experience of our shareholders.

During the year, the committee focused

particularly on four areas:

• • Determining the appropriate annual

bonus outcome for the executive

directors in a year where delivery

proved more demanding, reflecting

both external factors and the bedding

in of internal changes

• • Reviewing the metrics of the 2026/27

annual bonus, including the role of

gross profit alongside operating profit

• • Pausing the previously announced

phased adjustment to executive

basesalaries in light of the year’s

performance

• • Continuing to monitor workforce

remuneration and broader

stakeholder considerations.

Remuneration outcomes

for2025/26

Executive director bonuses

For 2025/26, the CEO and CFO were

eligible for a maximum annual bonus

opportunity of 125% of base salary. The

structure of the annual bonus comprised:

• • 72% based on operating profit

performance against target

• • 28% based on key strategic

objectives.

As outlined in the financial review on

pages 26 to 31, operating profit declined

in 2025/26 and did not reach the entry

threshold which we set at just over

£64 million. Accordingly no bonus was

payable in respect of that element.

The strategic component of our annual

bonus included services gross profit,

employee and customer satisfaction,

cash conversion and other measures

linked to the Group’s strategic priorities.

In assessing performance against these

objectives, the committee noted that

several individual measures were

achieved, reflecting the continued

focusby the Group on its long-term

strategic priorities.

However, in determining the annual bonus

outcome, the committee considered

overall Group performance, including

financial performance and the experience

of shareholders. Following engagement

with the executive directors, the

committee exercised its judgement and

determined that no annual bonus would

be payable to the executive directors

inrespect of 2025/26. The executive

directors have confirmed their support

forthis outcome.

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The outcome reflects the committee’s

view that executive remuneration

shouldremain closely aligned with

overallcompany performance and

shareholder experience.

Performance Share Plan award

Our 2025/26 year end marked the

conclusion of the three-year performance

period for BTG’s Performance Share Plan

(PSP) share awards granted on 1 June

2023. Vesting was determined based on

performance to the end of February 2026

against two measures, with 75% based on

adjusted earnings per share (EPS) and

25% on relative total shareholder return

(TSR) versus the FTSE 250 Index

(excluding investment trusts and real

estate investment trusts). EPS targets

were partially met, while the TSR

measuremissed its threshold, resulting

inan overall vesting of 16.2% of the

shareawards originally granted, with

those awards vesting on 1 June 2026,

butsubject to another two-year holding

period for the executive directors.

Following the 2025/26 year end,

ourcommittee considered the

appropriateness of the PSP outcomes

and whether any adjustments or use

ofdiscretion might be appropriate. We

concluded that the overall outcome

reflects the underlying performance

ofthe business and is in line with the

experience of shareholders and other

stakeholders over the performance

period, and therefore no adjustments

were necessary.

The committee remains satisfied that

thePSP awards continue to provide

appropriate long-term alignment

betweenexecutive reward and

shareholder interests.

Pay arrangements for 2026/27

Base salaries

As set out in last year’s directors’

remuneration report, a review conducted

in 2024/25 concluded that both the

CEO’sand CFO’s base salaries were

below market levels. The committee

hadtherefore intended to move salaries

gradually towards more competitive

levelsover time. However, consistent

withour principle that reward should

follow performance, and in light of the

Group’s overall performance this year,

the committee decided to pause that

phased adjustment. For 2026/27,

executive directors’ base salaries

willincrease by3.5%, in line with the

average for the wider workforce.

Pensions and benefits

Pension contributions for BTG’s executive

directors will remain unchanged at up

to4% of salary. These continue to be

inline with the level provided to the

majority of the Group’s employees.

Otherbenefits for the executive directors

also remain unchanged.

Annual bonus

For 2026/27, the maximum annual bonus

opportunity for executive directors will

remain unchanged at 125% of base salary.

The committee has reviewed the metrics

within our annual bonus to ensure that

these continue to reflect the evolving

priorities of the business, reinforcing both

financial discipline and the key drivers of

long-term value creation. In doing so, we

took account of feedback from a number

of shareholders on the pace at which BTG

returns to stronger gross profit growth,

alongside the Company’s own focus

onthis area as a key driver of financial

performance. The financial component

ofthe bonus will accordingly increase to

80% of the total opportunity and will

bemeasured with reference to the

achievement of stretching targets for both

operating profit and gross profit growth

(both excluding acquisitions). Operating

profit will remain the primary measure,

weighted at 70% of the financial

component, with gross profit growth

weighted at 30%. The entry point for

operating profit will also act as an

underpin to the gross profit metric,

ensuring that incentives support growth

inthe business while maintaining

discipline on overall profitability.

The remaining 20% of the bonus

opportunity is based on a focused set of

strategic metrics aligned to the Group’s

key value drivers. These comprise

services gross profit growth, as a

strategically important component

ofoverall gross profit, alongside cash

conversion, employee engagement and

customer satisfaction, strengthening

thelink between these measures and

theGroup’s financial performance.

The committee considers that this

structure strengthens the alignment

between executive incentives, financial

discipline and the strategic priorities of

the Group.

Performance Share Plan award

In 2026/27, the PSP award level will

remain unchanged from the previous year

at 150% of salary. This level is within the

headroom allowed in the remuneration

policy, which allows for up to 200% of

salary as an annual award. Vesting will

again be subject to performance

conditions related to basic EPS

(unadjusted and undiluted), with 75%

weighting, and relative TSR at 25%

weighting, aligned with long-term

shareholder value creation.

Considering shareholder experience in

the last 12 months, we are aware that our

current share price is lower than it was a

year ago. However, the committee has

recognised this and has committed to

review PSP outcomes at vesting and, in

the event of there being windfall gains,

would exercise its discretion to reduce

thelevel of vesting.

Annual Report and Accounts 2025

26 113

GOVERNANCE REPORT

Directors’ remuneration report continued

Our remuneration policy

BTG’s current remuneration policy

received strong shareholder endorsement

at the 2024 Annual General Meeting, with

98.71% of votes in favour. In2025/26, 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

and consistent with regulatory guidance.

During the year, we remained attentive to

evolving governance guidance, including

the increasing emphasis on clarity around

discretion, workforce alignment and ESG

metric robustness. We remain satisfied

that our malus and clawback provisions,

disclosure practices and use of discretion

are appropriate. On the latter, the

committee carefully considered the

exercise of discretion in relation to this

year’s annual bonus. Our conclusion was

that it was not appropriate to pay a bonus

to the executive directors, reflecting

ourestablished principle that formulaic

outcomes may be adjusted where they

donot reflect overall performance.

Committee evaluation and

non-executive directorfees

The committee’s performance in 2025/26

was assessed as part of an external

Board evaluation by Lintstock, BTG’s

advisors on board effectiveness. I am

pleased to report that we were found

tobe operating effectively. Lintstock

indicated that our committee

demonstrated strong alignment between

remuneration policy and strategy, and

appropriate responsiveness to

shareholder expectations.

During 2025/26, the Board Chair’s and

our non-executive directors’ fees were

reviewed. No general increase was

awarded last year. An increase of 3.5%,

inline with the average for the wider

workforce, was agreed for 2026/27.

External remuneration

consultants

During the year, our committee reviewed

the performance of FIT, the external

remuneration consultants we have

worked with for more than five years.

Given their knowledge of BTG, their solid

reputation and their familiarity with the

organisational changes under way at

thecompany, we have decided to

retainthem. The committee remains

satisfied that FIT’s advice is objective

andindependent.

Engaging with shareholders

Engagement with shareholders is a key

part of the committee’s role. In 2025/26,

shareholder engagement on remuneration

matters took place primarily alongside

broader business discussions in meetings

with the Board Chair.

Following the year end, I wrote directly

toour major shareholders to explain the

committee’s key decisions for the year: the

determination that no annual bonus would

be payable to the executive directors,

thepause to the previously announced

phased adjustment to executive base

salaries, and the changes to the annual

bonus metrics for 2026/27. Our

correspondence was acknowledged by a

number of shareholders, and the feedback

received informed the final balance

between operating profit and gross profit

for 2026/27.

As 2026/27 will be a policy renewal year,

Iexpect to continue to engage directly

with our major shareholders and proxy

advisors on remuneration matters. I look

forward to continuing that dialogue.

Our employee stakeholders

BTG is a people business and the Group’s

employees are one of our primary

stakeholder groups.

Shruthi Chindalur, a committee member

and the designated non-executive

director for employee engagement,

actsas a conduit for workforce views.

Sheprovides our committee with insights

into employee sentiment, engagement

metrics and broader people-related

developments. Her input also informs

thecommittee’s thinking on executive

paydecisions.

The committee supports BTG

management in decisions about

employee remuneration, applying the

same principles of fairness and

consistency as we do to executive pay.

This year, given the more demanding

trading environment, we were particularly

focused on how to reward employees

appropriately across the Group.

We oversaw the launch of BTG’s fifth

ShareSave plan in 2025, and the vesting

of the second ShareSave plan, which was

implemented in 2022.

114 Bytes Technology Group plc

GOVERNANCE REPORT

Looking ahead to 2026/27

The past year has required careful

judgement from the committee. In a year

that tested the business’s adaptability,

wehave sought to balance fairness and

the retention of key talent with clear

alignment to overall performance and

theshareholder experience.

Our priorities for the coming year include:

• • Embedding the refined annual bonus

structure, including the introduction of

gross profit alongside operating profit

as a financial metric

• • Reviewing the remuneration policy,

ensuring our framework remains fit

forpurpose, competitive and aligned

with evolving good practice in the

FTSE 250

• • Continuing our oversight of executive

pay positioning, with particular

attention to retention and succession,

as the business evolves

• • Ensuring long-term incentives remain

aligned with the creation of

shareholder value

• • Maintaining transparency of

disclosure and continuing to engage

constructively with our shareholders

• • Overseeing the continued

development of the wider Group

payframework

• • Considering any remuneration

implications arising from the

committee’s 2026/27 focus on

employee reward and benefits,

asinformed by the designated

non-executive director for

employeeengagement.

Further to the Chair’s statement on

page5 regarding the split of the roles

ofChief Financial Officer and Chief

Operating Officer, the committee will

determine any resulting remuneration

arrangements in line with BTG’s

shareholder-approved remuneration

policy, with full disclosure in the 2026/27

directors’ remuneration report.

In conclusion

At BTG’s 2026 Annual General Meeting,

we will be asking shareholders to approve

this directors’ remuneration report, which

is the normal annual advisory vote on the

report. We hope you will join the Board in

supporting this resolution at the Annual

General Meeting on 9 July 2026. Our

decisions this year reflect a consistent

approach: that executive remuneration

should align withcompany performance

and the experience of our shareholders.

That principle will continue to guide us in

the year ahead.

Our 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, WK Groenewald,

atwk.groenewald@bytesplc.com.

I would like to thank our shareholders,

theBoard, the wider BTG team and our

advisors for their support throughout

theyear.

Dr Erika Schraner

Remuneration Committee Chair

11 May 2026

Annual Report and Accounts 2025

26 115

GOVERNANCE REPORT

Directors’ remuneration report continued

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 2026/27

The following table shows how we intend to apply the policy for 2026/27 for our two executive directors.

Fixed pay Salary փ CEO: £475,065 (3.5% increase effective 1 March 2026)

փ CFO: £394,335 (3.5% increase effective 1 March 2026)

փ Workforce average increase 3.5%

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 Increased weighting on financial performance to 80%, with

operating profit as the underpin and gross profit as an

additional measure

փ Streamlined structure, with 20% based on strategic financial

and ESG objectives

փ Reduced strategic KPIs to three per executive director to

enhance focus and clarity

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 Basic earnings per share (EPS)

(unadjusted and undiluted) (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: 146% of salary

փ C FO: 111% s alar y

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

Remuneration at a glance

116 Bytes Technology Group plc

GOVERNANCE REPORT

Implementing our policy in 2025/26

The following charts show the actual levels of remuneration earned by the executive directors for 2025/26 relative to the

maximum potential remuneration that was available.

2025/26 remuneration outcomes versus policy maximum

£’000 0 300 600 900 1,200 1,500

Andrew Holden, CFO

2025/26

Maximum

Actual

Sam Mudd, CEO

2025/26

Maximum

Actual

Fixed pay Annual bonus

LTI

1 Maximum annual bonus was 125% of salary maximum (with one third deferred), and measured against operating profit (72%) and strategic/ESG objectives (28%). In 2025/26

both executive directors received a nil bonus, see page 120 for more details.

2 The PSP was awarded in June 2023 and measured against adjusted EPS (75%) and relative TSR (25%) over a three-year performance period to 28 February 2026.

Annual Report and Accounts 2025

26 117

GOVERNANCE REPORT

Directors’ remuneration report continued

Annual report on remuneration

Committee attendance

Committee member

For the financial year to

28 February 2026

Erika Schraner

2/3

Patrick De Smedt 3/3

Shruthi Chindalur 3/3

Ross Paterson 3/3

Anna Vikström Persson 3/3

1 Erika Schraner was absent from the April 2025 meeting

because of hospitalisation, and delegated the chairing to

Patrick De Smedt.

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111).

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. All the members

of the committee were members

throughout the year ended 28 February

2026. The committee met three times

during the year, with attendance at these

meetings set out in the table above. The

committee also held a working session in

January 2026.

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. FIT was appointed by the Board

in September 2020 and provided advice

during the year on general remuneration

matters, and on the implementation of the

policy. Fees paid to FIT for advising the

committee during the year to 28 February

2026 were £51,056 (excluding VAT),

charged on a time-cost basis. FIT did not

provide any other services to BTG during

the year to 28 February 2026. 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 2025/26

financial year:

• • Concluded a comprehensive review

ofexecutive director remuneration,

including a peer group benchmarking

exercise, analysis of current

compensation relative to

predecessors, and an assessment

offairness in the context of Group

performance and increased

organisational complexity

• • Engaged with major shareholders

onaphased adjustment to executive

director salaries to bring them

closerto market, while maintaining

abalanced approach to leadership

continuity and performance

• • Reviewed and approved remuneration

packages for the current executive

directors

• • Reviewed and approved the annual

bonus outcomes for the 2024/25

financial period

• • Reviewed and approved the terms

ofthe 2024/25 PSP awards

• • Oversaw the PSP, the Deferred Share

Bonus Plan (DBP), the Company

Share Option Plan (CSOP) and the

ShareSave plan

• • Monitored corporate governance

developments, and ensured that BTG

continues to be appropriately

positioned to comply with the code

• • Monitored external market practice,

and developments in the governance

expectations of institutional

shareholders and shareholder

representative bodies.

Since the end of the 2025/26 financial

year, the committee has:

• • Determined the outcomes under the

annual bonus plan for the year ended

28 February 2026

• • Determined the outcomes under the

PSP for the year ended 28 February

2026 – that is, relating to the awards

granted on 1 June 2023

• • Ensured executive pay remains aligned

with company performance, strategic

priorities and the 2026/27 budget

• • Reviewed and agreed the award levels

and performance targets for the PSP

grants to be made to eligible

participants in 2026/27.

The current directors’ remuneration

policy was approved by shareholders at

our 2024 Annual General Meeting and

took formal effect from then. 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 9 July 2026.

118 Bytes Technology Group plc

GOVERNANCE REPORT

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 2026.

Directors’ total remuneration

Base salary/

fees

Benefits

Annual

bonus

Long-term

incentives

2, 3

Pension

Total Total fixed Total variable

Executive directors

Sam Mudd 2025/26 459,000 1,678 – 32,575 18,360 511,613 479,038 32,575

2024/25 416,997 5,803 3 47,9 84 227,42 9 16,680 1,014,893 439,480 575,413

Andrew Holden 2025/26 381,000 1,350 – 55,320 15,240 452,910 397,5 9 0 55,320

2024/25 348,926 5,480 2 91,179 446,671 13,957 1,10 6,213 368,363 737,8 5 0

Non-executive directors

Patrick De Smedt 2025/26 205,000 – – – – 205,000 205,000 –

2024/25 205,000 – – – – 205,000 205,000 –

Shruthi Chindalur

2025/26 65,000 – – – – 65,000 65,000 –

2024/25 115,2 21 – – – – 115,221 115,221 –

Ross Paterson 2025/26 68,000 – – – – 68,000 68,000 –

2024/25 51,000 – – – – 51,000 51,000 –

Erika Schraner

2025/26 79,000 – – – – 79,000 79,000 –

2024/25 80,583 – – – – 80,583 80,583 –

Anna Vikström

Persson

2025/26 68,000 – – – – 68,000 68,000 –

2024/25 51,000 – – – – 51,000 51,000 –

Total 2025/26 1,325,000 3,028 – 8 7, 8 95 33,600 1,449,523 1,361,628 8 7,89 5

2024/25 1,268,727 11,2 8 3 639,163 674,10 0 30,637 2,623,910 1,310,647 1,313,263

1 Non-salary benefits include life insurance and, in the prior year, the discount on options granted under the 2024 SAYE (2025/26: nil).

2 The value of the 2025/26 long term incentives relates to the PSP award granted in June 2023. The value of PSP awards has been calculated using the three-month average

share price measured to 28 February 2026 of 335 pence per share less the 1-pence-per-share exercise price. See more on pages 120 to 121. No element of this value relates to

share price growth. The Bytes share price on the date of award (1 June 2023) was 516 pence.

3 The value of the 2024/25 long term incentives has been restated based on a share price of 525 pence per share to reflect the value of the award on 31 May 2025 when the award

vested. In 2024/25 the value was based on the three-month average share price measured to 28 February 2025 of 440 pence per share.

4 The amount of employer contribution based on a percentage of base salary.

5 As outlined in last year’s directors’ remuneration report, the fees for 2024/25 include additional fees for work on special Board subcommittees.

Annual Report and Accounts 2025

26 119

GOVERNANCE REPORT

Directors’ remuneration report continued

Annual bonus for the year ended 28 February 2026 (audited)

For the 2025/26 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. The maximum annual bonus for

2025/26 for the CEO and CFO was 125% of salary. The targets and the related performance formulaic outcomes for the executive

directors were as follows, metrics applying equally to both CEO and CFO unless stated otherwise.

Financial Performance:

Performance metric

Weighting

(% of base salary)

Threshold performance

(25% of max payable)

Target performance

(50% of max payable)

Stretch performance

(100% of max payable)

Actual

performance

Formulaic

outcome

(% of max for

this element)

Formulaic

outcome

(% of base

salary)

Operating profit

(£’000)

90% 64,017 71,130 74,687 62,732 0% 0%

As outlined in the financial review on pages 26 to 31, operating profit declined in 2025/26. As set out in the Remuneration

Committee Chair’s statement, expectations for operating profit were revised down over the course of the year and the final

outcome did not meet the targets set at the start of the year.

The annual bonus framework places significant weighting on financial performance, with operating profit accounting for 72% of the

maximum annual bonus opportunity (equivalent to 90% of base salary at maximum). As shown in the table above, operating profit

for the year did not reach the threshold level and, accordingly, this element resulted in a zero outcome.

Strategic Objectives:

The remaining 28% of the maximum annual bonus opportunity (equivalent to 35% of base salary) was based on strategic

objectives. These were tailored to the CEO and CFO to reflect their respective responsibilities. The CEO was set targets for

services GP, eNPS (employee net promoter score), NPS (customer net promoter score) and ESG score (as per the ISS Quality

Score methodology). The CFO was set targets for services GP and ESG in line with the CEO, but eNPS and NPS were replaced by

cash conversion % and operating profit/gross profit ratio (OP/GP). Except for the ESG measure all other strategic objectives were

measured on a straight-line basis starting at a threshold target up to 100% for stretch target. The ESG objective was measured on

a hit or miss basis against target.

In assessing performance against these objectives, the committee noted that the majority of strategic measures were achieved,

with eNPS and OP/GP partially achieved between threshold and stretch. The formulaic outcomes for the strategic component of

the bonus resulted in an overall achievement against the maximum possible of 89% for the CEO and 79% for the CFO, equating to

31% and 28% of their respective base salaries.

The strategic measures represent a smaller proportion of the overall bonus opportunity. Combined with the zero outcome on the

operating profit element, the total formulaic overall outcome was 25% of maximum (31% of salary) for the CEO and 22% of

maximum (28% of salary) for the CFO. Reflecting the Group’s financial performance and the experience of shareholders over the

year, the committee determined that it would not be appropriate for any bonus to be paid, a position the executive directors have

confirmed they support.

The outcome reflects the view of the committee, supported by the Board, that executive remuneration remains closely aligned with

overall company performance and shareholder experience.

120 Bytes Technology Group plc

GOVERNANCE REPORT

PSP awards vesting for the year ended 28 February 2026 (audited)

Awards were granted on 1 June 2023 under the PSP to the CEO and the CFO, and these were based on performance targets

measured over the three financial years to 28 February 2026. A total of 75% of the award was subject to an adjusted earnings per

share (EPS) growth condition and 25% 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% 22.43 pence 26.45 pence 29.39 pence 22.64 pence 21.6% 16.2%

Relative TSR

25% Median n/a Upper quartile Below Median nil nil

Total vesting 16.2%

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).

The committee considered that the underlying performance of the company and the performance of the executive directors 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 2023)

Shares after performance

conditions applied

Share price at end of performance

period (three-month average to

28 February 2026)

Value at end of

performance period

Sam Mudd 60,300 9,753 334 pence £32,575

Andrew Holden 102,400 16,563 334 pence £55,320

1 Values shown in the Single total figure of remuneration for each director table are based on the three-month average share price to 28 February 2026 of 335 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 23 June 2025.

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 23 June 2025 Nil cost option 150% 135,000 683 20% 22 June 2028

Andrew Holden 23 June 2025 Nil cost option 150% 112,000 567 20% 22 June 2028

1 The number of awards was calculated using a share price of £5.10, which was based on the company’s average closing share price on 18, 19 and 20 June 2025.

The PSP awards granted on 23 June 2025 are subject to a combination of performance conditions, being 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

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.

Annual Report and Accounts 2025

26 121

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 shares/

options at

28 February

2025

Shares/

options

granted

in year

Shares/

options

lapsed/

forfeited

in year

Shares/

options

exercised

in year

No. of shares/

options at

28 February

2026

Date of

grant

Share price

at date of

grant

Exercise

price

Date from

which

exercisable

Expiry

date

Sam Mudd

PSP 137,855 – – 13 7, 8 55 – 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

PSP 52,230 – 8,828 43,402 – 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

DBP

– 22,744 22,74 4 23 June

2025

£5.06 £0.01 23 June

2027

23 December

2027

PSP

– 135,000 135,000 23 June

2025

£5.06 £0.01 23 June

2028

22 June

2035

Andrew Holden

CSOP 45,000 – – – 45,000 1 June

2021

£5.00 £5.00 1 June

2024

31 May

2031

PSP 102,580 – 17,337 85,243 – 22 June

2022

£4.53 £0.01 1 June

2025

31 May

2032

DBP

20,376 1,396 – 21,772 – 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

DBP

– 19,031 – – 19,031 23 June

2025

£5.06 £0.01 23 June

2027

23 December

2027

PSP

– 112,000 – – 112,000 23 June

2025

£5.06 £0.01 23 June

2028

22 June

2035

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 23 June 2025 to Sam Mudd and Andrew Holden on the date of the grants was £115,085 and £96,297, respectively. These grants

are not subject to any other performance conditions.

2 The face value of the PSP awards granted on 23 June 2025 to Sam Mudd and Andrew Holden on the date of the grants was £683,100 and £566,720, respectively. These grants

are subject to performance conditions set out on page 121.

3 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 2026 was 303 pence, and the closing price range during

the year ended 28 February 2026 was 285.8 pence to 551.0 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 2026.

Current directors

No. of shares

owned outright

28 February

2025

No. of shares

owned outright

28 February

2026

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

2026

Shareholding

guideline as

% of salary

Company

shareholding

guideline met

Sam Mudd

99,948 220,818 50,000 32,705 295,000 146% 200% No

Andrew Holden 83,237 139,588 45,000 33,863 306,000 111% 200% No

Patrick De Smedt 102,592 115,392 – – – n/a n/a n/a

Shruthi Chindalur – 6,213 – – – n/a n/a n/a

Ross Paterson 15,831 25,953 – – – n/a n/a n/a

Erika Schraner 10,037 10,037 – – – n/a n/a n/a

Anna Vikström

Persson

9,141 2 2,141 – – – 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 2026 of 303 pence per share, so variations in the percentage of salary may arise because of share price changes, even though the

underlying quantity of shares may be increasing.

Any share sales by the executive directors in 2025/26 were

solely to meet tax liabilities on vesting awards, with all net-of-tax

shares retained. Both executive directors have continued

tobuild their shareholdings during the year. In August 2025,

Sam Mudd acquired shares from her own funds demonstrating

personal commitment to alignment with shareholders. The

committee notes that both directors are making progress

towards the 200% guideline and expects this progress to

bevisible in next year’s Annual Report as LTI awards vest.

The shareholding percentages in the table above reflect the

value of whole shares held outright by the executive directors at

28 February 2026, consistent with prior years. On a fuller basis

– including shares subject to continuing deferral and holding

requirements, valued in line with UK Investment Association

guidance and net of estimated taxes on exercise – Sam Mudd’s

shareholding at 28 February 2026 would be 156% of salary and

Andrew Holden’s 124%, based on a share price of 303 pence.

The interests of those directors holding a position on the Board

at the year end did not change between 28 February 2026 and

the date of signing the Annual Report and Accounts 2025/26.

Payments for loss of office and to past directors

(audited)

There were no payments for loss of office or to past directors

during the year.

Recovery and withholding provisions

Robust recovery and withholding provisions – that is, malus and

clawback – operate for our annual bonus, DBP and PSP.

The following provisions apply:

• • Before payment of an annual bonus or vesting of a DBP 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 committee considers these periods to be appropriate for

the Group. The malus window ensures that awards can be

cancelled if triggering circumstances become apparent

before they are paid or vest. The two-year clawback period is

considered sufficient to identify any misstatement,

misconduct, material error or reputational event connected

to the relevant performance period, reflecting the company’s

annual audit cycle and the nature of its business model, while

remaining proportionate and reasonable in duration.

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)

Annual Report and Accounts 2025

26 123

GOVERNANCE REPORT

Directors’ remuneration report continued

Total shareholder return performance

The graph below shows the value at 28 February 2026 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 28 February 2026

Bytes Technology Group

FTSE 250 Index (excluding Investment Trusts)

Source: Datastream

(an LSEG product)

100

150

200

250

155

108

100

171

111

118

153

108

220

171

131

144

107

CEO remuneration

The total remuneration figure for the CEO in 2025/26 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 is building to show a rolling 10 years’ worth of data over time.

Year CEO

CEO single

total figure of

remuneration

Annual bonus

payout %

of maximum

PSP

vesting %

of maximum

2025/26 Sam Mudd £511,613 0% 16%

2024/25 Sam Mudd

£1,014,893 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).

• • 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.

No clawback provisions were invoked during the 2025/26

financial year.

124 Bytes Technology Group plc

GOVERNANCE REPORT

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 2026. 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 is building up over time to cover a rolling five-year period.

Current directors

Salary and fees

(% change)

Taxable benefits

(% change)

Annual bonus

(% change)

Sam Mudd

2025/26 10.1% (71.1%) (100%)

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

2025/26 9.2% (75.4%) (100%)

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 2025/26 0% n/a n/a

2024/25 9.5% n/a n/a

2023/24 0% n/a n/a

2022/23 4% n/a n/a

Shruthi Chindalur

2025/26 (43.6%) n/a n/a

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

2025/26 33.3% n/a n/a

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

2025/26 (2.0%) n/a n/a

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

2025/26 33.3% n/a n/a

2024/25 n/a n/a n/a

2023/24 n/a n/a n/a

2022/23 n/a n/a n/a

All employees

2025/26 3.7% 44.3% (66.6%)

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 reflects a comparison with pro rata fees earned in 2023/24 since Shruthi’s appointment to the Board on 1 February 2024, together with additional fees

received in respect of Board subcommittee work in 2024/25.

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.

6 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.

Annual Report and Accounts 2025

26 125

GOVERNANCE REPORT

Directors’ remuneration report continued

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

2025/26 £103.8m £48.6m

2024/25 £ 97.2m £42.8m

2023/24 £88.4m £36.6m

% increase 7% 14%

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 is building to

show a rolling 10 years’ worth of data over time.

Year Method 25th percentile 50th percentile 75th percentile

2025/26 A 13:1 9:1 6:1

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 2026.

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

2025/26

salary

£459,000 £30,526 £41,6 67 £65,000

2025/26

total pay

£511,613 £38,083 £55,822 £92,325

The significant reduction in the CEO pay ratios for 2025/26

reflects the remuneration outcomes for the year. With no annual

bonus payable and a PSP vesting of 16.2% of the award

originally granted, the CEO’s total remuneration of £508,492

was considerably lower than in 2024/25. This outcome is

consistent with the experience of the wider workforce, which

also saw reduced bonus payments and lower share plan returns

in 2025/26. The committee notes that the reduction in the CEO

pay ratio this year is a direct consequence of the remuneration

framework operating as intended, with executive, shareholder

and employee outcomes moving in the same direction.

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

2 July

2025

1 month

Erika

Schraner

1 September

2021

1 September

2021

2 July

2025

1 month

Shruthi

Chindalur

1 February

2024

30 January

2024

2 July

2025

1 month

Ross

Paterson

1 June

2024

9 May

2024

2 July

2025

1 month

Anna

Vikström

Persson

1 June

2024

9 May

2024

2 July

2025

1 month

126 Bytes Technology Group plc

GOVERNANCE REPORT

Implementation of policy for the year ending

28 February 2027

Base salary

The committee reviews the executive directors’ base salaries

annually, with any increases taking effect from 1 March each

year. As explained in the Remuneration Committee Chair’s

introduction, the increases to base salaries for 2026/27 will be

in line with the 3.5% average for the wider workforce for

2026/27 and accordingly, salaries for the executive directors in

2026/27 will be: Sam Mudd £475,065 (2025/26: £459,000), and

Andrew Holden £394,335 (2025/26: £381,000).

Pension and benefits

No changes are proposed to pension and benefits for 2026/27.

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 primarily on financial performance

(80%), measured against operating profit and gross profit

growth (both excluding the impact of acquisitions), with

operating profit acting as an underpin to the gross profit

measure. The remaining 20% will be based on a focused set of

strategic financial and ESG objectives, including services gross

profit growth, cash conversion, employee engagement and

customer satisfaction. This change reflects a greater emphasis

on financial discipline and alignment with the Group’s key value

drivers, including gross profit growth. 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 2025

26 127

GOVERNANCE REPORT

Directors’ remuneration report continued

Performance Share Plan

The executive directors will participate in the PSP in 2026/27. 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

Basic EPS

(unadjusted and undiluted)

75% Three financial years to

28 February 2029

Basic EPS (unadjusted and undiluted)

of 22.9 pence (20% vests) rising on a

straight-line basis to 50% vesting for

25.4 pence, and on a straight-line

basis again to full vesting for

achievement of 27.9 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 2029

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. As noted in the Remuneration Committee Chair

introduction, at vesting the committee will consider whether there have been windfall gains.

Non-executive directors’ fees

For 2026/27, the non-executive directors’ fees are set out below.

Fee 2025/26 Fee 2026/27 % increase

Chair £205,000 £212,175 3.5%

Base fee £57,000 £58,995 3.5%

Senior independent director £11,000 £11,38 5 3.5%

Audit Committee Chair £11,000 £11,38 5 3.5%

Remuneration Committee Chair £11,000 £11,38 5 3.5%

ESG Committee Chair £11,000 £11,38 5 3.5%

Designated non-executive director for employee engagement £8,000 £8,280 3.5%

Remuneration voting outcomes

At our 2025 Annual General Meeting on 2 July 2025, our directors’ remuneration report was approved with 98.83% of votes cast in

favour, 1.17% of votes against and 4,006 votes withheld. At the 2024 Annual General Meeting on 11 July 2024, 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.

Dr Erika Schraner

Remuneration Committee Chair

11 May 2026

128 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 2026.

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 4 to 9

• • An indication of likely future developments in the business of

BTG and its subsidiaries, Bytes Software Services and

Phoenix Software, on pages 6 to 9

• • Financial performance, on pages 26 to 31

• • Business environment, on pages 16 to 17

• • 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 6 to 9 and 21 to25

• • Internal controls, principal risks and risk management

framework, on pages 32 to 43

• • Stakeholder engagement, including employee engagement,

on pages 88 to 91

• • Directors’ biographies, on pages 80 to 82

• • Section 172 statement, on page 76.

Requirements of UK Listing Rule 6.6.1R

Information to be included in the Annual Report and Accounts

under UK Listing Rule (UKLR) 6.6.1R may be found as follows:

Relevant Listing Rule Pages

A statement of the amount of interest

capitalised during the period under review

anddetails of any related tax relief

n/a

Information required in relation to the

publication of unaudited financial information

n/a

Details of any long-term incentive schemes

and directors’ interests

112 to 128

Details of any arrangements under which a

director has waived emoluments, or agreed to

waive any future emoluments, from the Group

112 to 128

Where a director has agreed to waive future

emoluments, details of such waiver, together

with those relating to emoluments that were

waived during the period under review

112 to 128

Details of any non-pre-emptive issues of equity

for cash

n/a

Details of any non-pre-emptive issues of equity for

cash by any unlisted major subsidiary undertaking

n/a

Details of parent participation in a placing by a

listed subsidiary

n/a

Details of any contract of significance in which

a director is or was materially interested

n/a

Details of any contract of significance between

the company (or one of its subsidiaries) and a

controlling shareholder

n/a

Details of, or arrangements relating to, waiving

dividends by a shareholder

n/a

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 171 and is incorporated by reference. For information

onour approach to sustainability 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 22 and 23 to the financial statements.

Annual Report and Accounts 2025

26 129

GOVERNANCE REPORT

Directors’ report continued

Research and development

During 2025/26, and in 2024/25, the company undertook work

to develop new internal and customer-facing software systems,

but did not carry out any research activities during either year.

Directors

Information on the directors who held office at 28 February 2026,

and up to the date of this report, is set out on pages 80 to 82.

There were no changes to the composition of the Board or

committees during the year ended 28 February 2026, and up

tothe date of approval of the financial statements.

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 election/re-election

atthe Annual General Meeting on 9 July 2026. Details of the

directors’ service contracts and remuneration, including their

respective shareholdings in the company, is set out in the

directors’ remuneration report on pages 112 to 128.

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 2026 and up to the date of

approval of the financial statements.

Share capital

The issued share capital of the company at 28 February 2026

was 236,370,093 ordinary shares of £0.01 nominal value, with

no shares held in treasury. No additional shares have been

issued post year end. Note 19 to the consolidated financial

statements on page 173 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.

Purchase of own shares

At the Annual General Meeting of the company held on 2 July

2025, shareholders passed a special resolution in accordance

with the Companies Act 2006 to authorise the company to make

market purchases up to a maximum of 24,114,217 shares,

representing approximately 10% of the company’s issued

ordinary share capital as at 12 May 2025. From 18 August 2025

until 24 November 2025 inclusive, the company used this

authority to undertake a share buyback programme. During that

period, the company purchased 6,473,731 shares at an average

price of 386 pence for a total consideration of £25 million.

An analysis of shareholdings is shown on page 131. The closing

mid-market price of a share of the company on 28 February

2026, together with the range since admission to the London

Stock Exchange, is also shown on page 124.

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 7.0 pence per ordinary share,

taking the total full-year dividend to 10.2 pence per ordinary

share. Shareholders will be asked to approve the final dividend

at the Annual General Meeting on 9 July2026.

130 Bytes Technology Group plc

GOVERNANCE REPORT

Substantial shareholdings

At 30 April 2026, 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 67,15 9, 310 28.41

Camissa Asset Management 36,845,706 15.59

Biltron (Pty) Ltd 18,262,478 7.73

BlackRock 13,732,017 5.81

Public Investment Corporation (PIC) 11,510,74 4 4.87

Vanguard Group 9,909,131 4.19

M&G Investments 7,16 6 ,647 3.03

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 2025/26, see their

respective reports in the corporate governance report.

Remuneration voting outcomes

At our 2025 Annual General Meeting, the remuneration report

was approved, with 98.83% of votes cast in favour, 1.17% of

votes against and 4,006 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 19, 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 Share Bonus Plan (DBP) has been

implemented from 1 June 2022. The number of shares

awarded under the company’s DBP for the year ended

28 February 2026 is set out in note 26 and shown on pages

177 to 179

• • 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 are a number of agreements in the Group that may be

affected by a change of control of the company, such as

commercial contracts, banking and insurance agreements

and employee share plans

• • 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 2026

and up to the date of this report (2024/25: £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 2026 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.

Greenhouse gas emissions and energy

consumption

Information relating to greenhouse gas emissions and to energy

consumption and energy efficiency is detailed in Additional

environmental disclosures on pages 68 to 73 of the

strategicreport.

Annual Report and Accounts 2025

26 131

GOVERNANCE REPORT

Directors’ report continued

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. 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 76.

Details of its objectives and policies on financial risk management

are set out in note 22 to the financial statements on page 174.

The directors have made appropriate enquiries and consider

that BTG has adequate resources to continue to operate for the

foreseeable future, which covers the period to 31 August 2027.

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

As disclosed in note 22(c), in May 2026 the Group extended the

RCF by three years to 17 May 2029. Afteryear-end, the Board

agreed to implement a new share repurchase programme to

purchase the company’s shares for an aggregate value of up to

£25.0 million. There are no other events after 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 2026 Annual General Meeting will be held at 14:00 (BST) on

Thursday, 9 July 2026, 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

11 May 2026 and is signed on its behalf.

WK Groenewald FCG

Group Company Secretary

11 May 2026

132 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 the 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 IAS 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 11 May 2026 and is signed on its behalf.

Sam Mudd

CEO

11 May 2026

Andrew Holden

CFO

11 May 2026

Annual Report and Accounts 2025

26 133

GOVERNANCE REPORT

Financial statements

135 Independent auditor’s report

145 Consolidated financial statements

149 Notes to the consolidated financialstatements

182 Parent company financial statements

184 Notes to the financial statements

Supporting decision making with

high-quality financial data and analysis.

Bytes Technology Group plc134

Independent auditor’s report to the members

ofBytesTechnology Group plc

Opinion

In our opinion:

• • Bytes Technology Group plc’s Group financial statements and Parent company financial statements (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 2026 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

• • 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 2026 which comprise:

Group Parent company

Consolidated statement of profit or loss as for the

year ended 28 February2026

Parent company balance sheet

as at 28 February 2026

Consolidated statement of financial position as at

28 February 2026

Parent company 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 29 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 Financial Reporting Council’s (FRC) 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 Parent company in conducting the audit.

Annual Report and Accounts 2025

26 135

FINANCIAL STATEMENTS

Independent auditor’s report to the members ofBytesTechnology Group plc continued

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 evaluating whether 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 2027. 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 by the Group in the goodwill

impairmentassessment

• • 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 evaluated

management’s cash flow forecast by assessing the reasonableness of the base case and downside scenarios, with specific

consideration of key assumptions and sensitivities. This included challenging the appropriateness of forecast revenue growth

rates against historical performance, current trading results and external market data. We evaluated the impact of downside

factors such as cost-of-sales inflation, increased competition and resultant margin pressure, wage inflation, supply chain cost

pressures and rising interest rates on customer demand and payment behaviour. We also compared forecast cash balances at

period end to historical cash trends and recent performance to assess whether forecast liquidity outcomes were supportable

• • we noted that the key assumptions 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 benchmarked management’s assumptions to external data points such

as economic forecasts and reviewed for any contradictory evidence

• • we 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 its cash forecasts in order to quantify then assess the likelihood of the downside

scenarios required to exhaust the Group’s forecast liquidity, 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 2026, the Group had cash and cash equivalents of £98.6 million. The Group has no borrowings but has an

undrawn RCF facility of £30 million which runs, until 17 May 2026. This is not forecast to be drawn in management’s base case or

severe but plausible downside going concern scenarios. The Group has extended its RCF for another three years until May 2029.

Bytes Technology Group plc possesses cash headroom for the going concern period to 31 August 2027. Management’s analysis

of a severe but plausible scenario indicated that even if all key assumptions deteriorate relative to the base case, liquidity issues

would not arise. This conclusion is reached prior to considering any additional mitigations that management may implement (such

as dividends). We have not identified any material climate-related risks that should be incorporated into Bytes Technology Group

plc’s forecasts to 31 August 2027.

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 2027, 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.

136 Bytes Technology Group plc

FINANCIAL STATEMENTS

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 another two components.

Key audit matters

փ Risk of misstatement of revenue recognised at or near year end and risk of incorrect

IFRS15 presentation and disclosure in respect of principal versus agent.

Materiality

փ Overall Group materiality of £3.5m, which represents 5% of Group’s reported profit

beforetax for 2026.

An overview of the scope of the Parent company and Group audits

Tailoring the scope

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. When identifying components at which audit

work needed to be performed to respond to the identified risks of material misstatement of the Group financial statements, we

considered our understanding of the Group and its business environment, the potential impact of climate change, the applicable

financial framework, the Group’s system of internal control at the entity level, the existence of centralised processes, applications

and any relevant internal audit results.

Bytes Technology Group plc, trades predominantly in the UK through two trading entities: Bytes Software Services Limited (BSS)

and Phoenix Software Limited (PSL). We identified three components – BSS, PSL and Bytes Technology Group – 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, 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. Following this consideration, we selected two

head office components and designated them as specific scope.

Having identified the components for which work will be performed, we determined the scope to assign to each component.

Of the five components selected, we designed and performed audit procedures on the entire financial information of the three

components (full scope components). For two components, we designed and performed audit procedures on specific financial

statement account balances of the financial information of the component (specific scope components).

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, Anup Sodhi, determined the type of work that

needed to be undertaken at each of the components.

As Bytes Technology 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,

thisintegrated team performed all audit procedures at all three full scope components ,as well as procedures at other in-scope

components. Procedures over all components were overseen by the Senior Statutory Auditor, including the design, execution

andconclusion on all work performed.

Annual Report and Accounts 2025

26 137

FINANCIAL STATEMENTS

Independent auditor’s report to the members ofBytesTechnology Group plc continued

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 35 in the principal risks and

uncertainties. They have also explained their climate objectives on page 52. 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.

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; 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 2026. 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

Risk of misstatement of revenue recognised

ator near year end

Refer to Audit Committee report (pages 92 to 101);

Accounting policies (pages 153 to 154); and note 3

of the Consolidated financial statements (pages 161

to 162).

The Group has reported revenue of £220.6 million

(2025: £217.1 million).

Revenue reported in accordance with IFRS 15

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 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).

Therefore, there is a risk that revenue is recognised

prematurely or fictitiously around period end or

revenue is held back to distort earnings

betweenperiods.

We have performed the following key audit procedures on revenue

transactions (including gross invoiced income and rebate income):

• • reconfirmed our understanding of management’s revenue recognition

point by revenue stream and understand the process of entering into a

contract and agreeing terms with customers, and how contracts are then

assessed to evaluate if appropriate revenue recognition terms are

applied

• • 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 stream

• • tested a sample of credit notes issued subsequent to the year end

• • tested a sample of sales transactions, such as revenue transactions

deferred at year end, and recalculated the deferred elements to obtain

assurance over the calculation of deferred revenue

• • to address the risk of management override, we tested a sample of

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

• • 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 assess 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 reviewed the daily transactions for significant peaks and found the

largest peaks on the final day of the period, followed by two smaller

peaks within the first week of the subsequent period. Accordingly, the

majority of our testing was concentrated around these peak activity days.

138 Bytes Technology Group plc

FINANCIAL STATEMENTS

Risk Our response to the risk

Risk of incorrect IFRS 15 presentation and

disclosure in respect of principal versus agent

Refer to Audit Committee report (pages 92 to 101);

Accounting policies (pages 153 to 154); and note 3

of the Consolidated financial Statements (pages 161

to 162).

The Group has recognised an agency adjustment of

£2,120.5 million (2025: £1,882.7 million) in respect

of income to be recognised net as agent under

IFRS15.

As above, the Group has reported revenue of

£220.6 million (2025: £217.1 million).

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.

The Group has assessed that it is acting as an agent

for all software sales. Although this 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

process becomes mechanical and hence reducing

the risk, the size of adjustment remains high.

We performed the following key audit procedures in respect of revenue:

• • 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 assess whether this has been

performed correctly – that is, that the revenue, cost of sales and margin

agency adjustment is appropriate. We also assessed whether

management’s methodologies and categorisations appropriately

considered 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 APM gross invoiced

income is consistent with prior year, assessing management’s rationale

for including the APM and that the amount reported is reconciled to

reported revenue.

How we scoped our audit to respond to the risk

We performed full scope audit procedures over this risk in two components – Bytes Software Services (BSS) and Phoenix

Software Limited (PSL) – which covered 99% of the revenue risk amount. Further, performed central procedures over IFRS 15

presentation and disclosure in respect of principal versus agent. All audit work performed to address this risk was undertaken by

the integrated team.

Key observations communicated to the Audit Committee

We concluded that the revenue recognised at or near year end was properly accounted for and that revenue has been

appropriately recognised and presentation is in accordance with IFRS 15.

In the prior year, we reported a key audit matter (KAM) in relation to ‘Misstatement of rebate and other vendor incentives receivable

at period end’. In the current year, this KAM has been downgraded, as the likelihood of occurrence and magnitude of misstatement

collectively do not pose a significant risk in the current year. In addition, the extent of incremental audit effort required in this area

has reduced, and therefore the matter no longer meets the definition of a key audit matter in the current year.

Annual Report and Accounts 2025

26 139

FINANCIAL STATEMENTS

Independent auditor’s report to the members ofBytesTechnology Group plc continued

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 £3.5 million (2025: £3.7 million), which is 5% (2025: 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 decrease in the current year is in line with the decrease in profitability in the year.

We determined materiality for the Parent company to be £6.7 million (2025: £7.0 million), which is 1% (2025: 1%) of total equity.

Total equity is set as the basis as this is a holding company.

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% (2025: 75%) of our planning materiality, namely £2.6 million (2025: £2.8 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 £0.5 million to £2.1 million

(2025: £0.6 million to £2.3 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 it all uncorrected audit differences in excess of £0.2 million (2025:

£0.2 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.

140 Bytes Technology Group plc

FINANCIAL STATEMENTS

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 76 and the Governance report set out on pages 78 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.

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

• • 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 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.

Annual Report and Accounts 2025

26 141

FINANCIAL STATEMENTS

Independent auditor’s report to the members ofBytesTechnology Group plc continued

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 132

• • 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 75 to 76

• • 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 132

• • directors’ statement on fair, balanced and understandable set out on page 133

• • Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks set out on page 32 to 43

• • the section of the Annual Report that describes the review of effectiveness of risk management and internal control systems

set out on page 92

• • the section describing the work of the Audit Committee set out on page 92 to 101.

Responsibilities of directors

As explained more fully in the directors’ responsibilities statement set out on page 133, 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.

142 Bytes Technology Group plc

FINANCIAL STATEMENTS

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 (United Kingdom adopted international accounting

standards, United Kingdom GAAP, the Companies Act 2006, UK Listing Rules of the Financial Conduct Authority and the UK

Corporate Governance Code) and the relevant tax laws and regulations in the UK. In addition, we concluded that there are

certain significant laws and regulations which may have an effect on the determination of the amounts and disclosures in the

financial statements being the Listing Rules of the UK Listing Authority, and those laws and regulations relating to health and

safety, employees, environmental, and bribery and corruption practices. We understood how Bytes Technology Group plc is

complying with those frameworks by making enquiries of management, internal audit, those responsible for legal and

compliance procedures, and the company secretary. We corroborated our enquiries through our review of Board minutes,

papers provided to the Audit Committee, correspondence received from regulatory bodies and information relating to the

Group’s anti-money laundering procedures as part of our walkthrough procedures.

• • 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.

• • 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 potential 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 affecting 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 journals; and were designed to

provide reasonable assurance that the financial statements were free from fraud and error. We performed journal entry

testingincluding 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, 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 FRC’s website at

frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Annual Report and Accounts 2025

26 143

FINANCIAL STATEMENTS

Independent auditor’s report to the members ofBytesTechnology Group plc 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.

Anup Sodhi (Senior Statutory Auditor)

for and on behalf of Ernst & Young LLP, Statutory Auditor

Luton

11 May 2026

144 Bytes Technology Group plc

FINANCIAL STATEMENTS

Consolidated statement of profit or loss

For the year ended 28 February 2026

Note

		Year ended	Year ended
		28 February	28 February
		2026	2025
		£’000	£’000
Revenue	3	220, 562	2 1 7,1 3 4
Cost of sales		(5 3 , 2 51)	(5 3, 8 80)
Gross profit		1 6 7, 3 11	16 3 ,2 5 4
Administrative expenses	4	(10 4 , 2 7 8)	(96, 936)
(Increase)/decrease in loss allowance on trade receivables	16	(3 0 1)	10 8
Operating profit		6 2 ,7 3 2	66,42 6
Finance income	7	7, 5 7 7	8,48 6
Finance costs	7	(319)	(2 9 1)
Share of loss of associate	12	(15 8)	(8)
Profit before taxation		6 9,8 32	74 , 6 1 3
Income tax expense	8	(18 , 5 5 0)	(1 9 ,7 7 2)
Profit after taxation		51, 2 8 2	5 4 , 8 41
Profit for the period attributable to owners of the parent company		51, 2 8 2	5 4 , 8 41
		Pence	Pence
Basic earnings per ordinary share	27	2 1. 4 0	2 2 .7 8
Diluted earnings per ordinary share	27	2 0 .74	2 1. 9 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 2025

26 145

FINANCIAL STATEMENTS

Consolidated statement of financial position

As at 28 February 2026

Note

		As at	As at
		28 February	28 February
		2026	2025
		£’000	£’000
Assets
Non-current assets
Property, plant and equipment	9	14 , 0 8 2	13 , 5 81
Right-of-use assets	10	1,7 5 4	1, 6 41
Intangible assets	11	4 6,48 2	4 3,47 5
Investment in associate	12	3,0 27	3 ,1 8 5
Contract assets	13	6 97	1, 7 7 3
Deferred tax asset	8	–	59
Total non-current assets		6 6,04 2	6 3 ,71 4
Current assets
Inventories		–	14
Contract assets	13	8 ,02 7	9,97 3
Trade and other receivables	16	2 99, 88 7	268 ,454
Current tax asset		1, 5 2 7	–
Cash and cash equivalents	17	9 8,6 4 6	11 3 , 0 7 6
Total current assets		408, 087	3 9 1, 517
Total assets		4 7 4 ,1 2 9	4 5 5 , 231
Liabilities
Non-current liabilities
Lease liabilities	10	( 1,1 3 8)	(1, 2 6 9)
Contract liabilities	14	(2 ,0 67)	(2, 0 3 4)
Deferred tax liabilities	8	(2, 587)	–
Total non-current liabilities		(5,7 9 2)	(3,303)
Current liabilities
Trade and other payables	18	(3 5 9 ,1 9 7)	(327,533)
Contract liabilities	14	(2 7,1 7 8)	(2 5, 2 4 5)
Current tax liabilities		–	(4 3 9)
Lease liabilities	10	(8 42)	(6 6 8)
Total current liabilities		( 3 8 7, 2 1 7)	(353,885)
Total liabilities		(3 93,0 0 9)	( 3 5 7,1 8 8)
Net assets		8 1 ,1 2 0	9 8,04 3
Equity
Share capital	19	2,36 4	2 , 411
Share premium	19	6 41, 514	6 36,4 32
Share-based payment reserve		10, 8 3 3	14 , 87 9
Merger reserve	20	(64 4,375)	(6 4 4 ,3 75)
Retained earnings		7 0,7 8 4	8 8,69 6
Total equity		8 1 ,1 2 0	9 8,04 3

The consolidated financial statements on pages 145 to 181 were authorised for issue by the Board of directors on 11 May 2026 and

were signed on its behalf by:

Sam Mudd Andrew Holden

Chief Executive Officer Chief Financial Officer

146 Bytes Technology Group plc

FINANCIAL STATEMENTS

Consolidated statement of changes in equity

For the year ended 28 February 2026

Note

					Attributable to owners of the company
		Share	Share	Other	Merger	Retained	Total
		capital	premium	reserves	reserve	earnings	equity
		£’000	£’000	£’000	£’000	£’000	£’000
Balance at 1 March 2024		2 ,404	6 33,6 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	23(b)	–	–	–	–	(4 2 ,8 4 3)	(4 2, 8 4 3)
Shares issued during the year	19	7	2 ,78 2	–	–	–	2 ,7 8 9
Transfer to retained earnings	26	–	–	(1, 0 9 1)	–	1, 0 91	–
Share-based payment transactions	26	–	–	5 ,04 9	–	–	5,0 49
Tax adjustments	8	–	–	(12 9)	–	–	(1 2 9)
Balance at 28 February 2025		2 , 4 11	63 6,432	14, 8 79	(6 4 4, 375)	8 8,69 6	98 ,04 3
Total comprehensive income for the year		–	–	–	–	51 ,282	5 1 ,282
Dividends paid	23(b)	–	–	–	–	(4 8 , 618)	(4 8 , 618)
Shares issued during the year	19	18	5,0 82	–	–	–	5 ,1 0 0
Transfer to retained earnings	26	–	–	(4 , 6 11)	–	4 , 6 11	–
Share-based payment transactions	26	–	–	7 51	–	–	7 51
Tax adjustments	8	–	–	(2 51)	–	–	(2 5 1)
Purchase and cancellation of own shares	19	(6 5)	–	65	–	(25 ,000)	(25, 000)
Costs of share purchases	19	–	–	–	–	(18 7)	(1 8 7)
Balance at 28 February 2026		2,36 4	6 41 , 514	1 0 ,833	(6 4 4 ,3 75)	7 0,7 8 4	8 1 ,1 2 0

Annual Report and Accounts 2025

26 147

FINANCIAL STATEMENTS

Consolidated statement of cash flows

For the year ended 28 February 2026

Note

		Year ended	Year ended
		28 February	28 February
		2026	2025
		£’000	£’000
Cash flows from operating activities
Cash generated from operations	21	7 1, 8 2 7	85,635
Interest received	7	7, 5 7 7	8,48 6
Interest paid	7	(2 39)	(2 24)
Income taxes paid		(1 8 ,1 2 1)	(1 8,930)
Net cash inflow from operating activities		61, 0 4 4	74,967
Cash flows from investing activities
Payments for property, plant and equipment	9	(1, 8 16)	(6, 3 5 8)
Payments for intangible asset	11	(4 ,0 9 7)	(3 ,7 0 9)
Net cash outflow from investing activities		(5 , 913)	(1 0, 0 6 7)
Cash flows from financing activities
Proceeds from issues of shares	19	5 ,1 0 0	2 ,7 8 9
Purchase of own shares for cancellation	19	(25, 000)	–
Cost incurred on purchase of own shares	19	(18 7)	–
Principal elements of lease payments	10	(8 56)	(60 6)
Dividends paid to shareholders	23(b)	(4 8 ,618)	(4 2 ,8 4 3)
Net cash outflow from financing activities		(6 9 , 5 6 1)	(4 0 ,6 6 0)
Net (decrease)/increase in cash and cash equivalents		(14 , 4 3 0)	24 ,240
Cash and cash equivalents at the beginning of the financial year		11 3 , 0 7 6	88,836
Cash and cash equivalents at end of year	17	9 8,6 4 6	11 3 , 0 7 6

148 Bytes Technology Group plc

FINANCIAL STATEMENTS

Notes to the consolidated financial statements

For the year ended 28 February 2026

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 note 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 Group’s ability to continue as a going concern is

dependent on it 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 risks

such as the Group’s exposure to credit risk, liquidity risk,

currency risk and foreign exchange risk, as described in

note 22.

When assessing the Group’s ability to continue as a going

concern, 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

2027, being over 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) this

year, but only a small increase in gross profit (GP) and

a small reduction in operating profit. Nevertheless, it

finished the year with cash conversion over 100% and

£98.6 million of cash which was after returning £74 million

to shareholders by way of dividends and share buy back

payments (28 February 25: cash of £113.1 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.

We are also seeing growing requirements for artificial

intelligence (AI) functionality within IT applications and

a demand for guidance and support from our customers.

These activities are illustrated by the very strong growth in

the Group’s internal services GP by 45% in the year which

captures the wide range of solution technology areas

offered and the Groups’ proven ability to deliver them.

Annual Report and Accounts 2025

26 149

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

1.3 Going concern continued

Resilience also continues to be built into the Group’s

operating model from:

• • Wide ranging customer base across public and

private sectors and with no customer contributing

more than 1% of GP in the period.

• • High levels of repeat business due to the nature of

licensing schemes and service contracts, meaning

subscriptions need to be renewed for the customer to

continue to enjoy the benefit of the product or service.

• • Microsoft relationship strength, with 68% of the

Group’s GII and 50% of GP generated from sales of

Microsoft products and associated service solutions,

this continues to be a very important partnership for

both sides. The Group has achieved a high level of

Microsoft specialisations (22) and solution partner

designations (10) in numerous technology areas.

These are key in underpinning the Group’s strategic

focus around driving growth in cloud computing,

cyber security and AI.

• • Back-to-back sales model meaning that the Group is

not exposed to inventory risk.

As a result of these factors described above, the directors

believe that the Group operates in a resilient industry,

which will enable it to return to its profitable growth

trajectory, following the reversal in growth for the first time

this past year.

Macroeconomic and Geopolitical risks

The Group 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, including the ongoing conflicts in Ukraine,

Iran and the wider Middle East creating potential supply

problems, product shortages and general price rises.

The Board monitors these macroeconomic and

geopolitical risks on an ongoing basis including:

• • Cost of sales inflation and competition leading to

margin pressure – our commercial model is based on

passing on supplier price increases to our customers.

• • Wage inflation – while we have already aligned staff

salaries to market rates, further expected rises have

been factored into the financial forecasts.

• • Interest rates – The Group has no debt exposure, nor

has it ever needed to call on its revolving credit

facility. We place cash on the money markets to

generate significant interest income.

• • Economic conditions impacting on customer

spending – we have seen increased spending by our

customers, because IT may be a means to

efficiencies and savings elsewhere.

• • Economic conditions impacting on customer

payments – We have seen our average debtor days of

39 remaining very close to that in previous years and

with only £0.7 million of bad debt in the year.

• • Tariffs impacting the Group directly or indirectly – 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.

• • Physical supply chain obstacles – We are not

dependent on the movement of goods, as software

sales are the dominant element of our income, and

we have a wide supply chain across multiple

technology areas.

• • Increased fuel & commodity prices – We are not a

heavy consumer of gas, electricity or fuel, and hence

these costs only represent a very small proportion of

our overheads.

• • 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.

Liquidity and financing position

At 28 February 2026, the Group held instantly accessible

cash and cash equivalents of £98.6 million.

The consolidated balance sheet shows net current assets

of £20.9 million at year end; this amount is after the Group

paid final and special dividends for the prior year totalling

£41.0 million, an interim dividend for the current year of

£7.6 million and a share buyback costing £25.2 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, in place since IPO in December

2020, has recently been extended for three years, until

17 May 2029. The facility includes a non-committed

£45 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 current

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 2027 and detailed

financial forecasts for the period up to 31 August 2027,

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 2027.

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FINANCIAL STATEMENTS

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 2027 and

extended across the first six months of the following

year to 31 August 2027.

• • 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 2026.

• • 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 2026.

• • 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

2026, freezing future pay from March 2027 (as current

year rises are already committed) and freezing rises in

general overheads from March 2027.

• • Full mitigation measures modelled additional

headcount reductions from March 2027, 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 bank 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.

Reverse stress test

The scenario analysis undertaken included reverse stress

testing that involved constructing scenarios that would

threaten the Group’s viability, because of either (a) the

Group exhausting all its available cash and its committed

bank facilities and/or (b) a breach of the covenant tests

underpinning the Group’s banking facilities. The Group

then assessed the likelihood of those scenarios occurring.

Having reviewed the reverse stress test, the directors have

concluded that the set of assumptions required to cause

exhaustion of cash and bank facilities, and/or a breach of

bank covenants, is unlikely to occur.

Going concern conclusion

Based on the analysis described above, the Group

has sufficient forecast 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 2027, 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.

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26 151

FINANCIAL STATEMENTS

1.4 Critical accounting estimates and judgements

continued

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 consistent with prior year and is

not considered to be significant.

• • 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, plant 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.

• • Share-based payments (see note 26).

Expenses are recorded throughout the vesting

period, with key judgements involving the estimation

of forfeiture rates and assessment of non-market

performance conditions. These key judgements are

updated at each reporting date when assessing the

likely number of options that will vest on completion of

the relevant performance period.

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 2025:

• • Lack of exchangeability – Amendments to IAS 21

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 2026 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.

• • Classification and measurement of financial

instruments – Amendments to IFRS 7 and IFRS 9

• • Nature-dependent electricity contracts –

Amendments to IFRS 9 and IFRS 7

The Group is assessing the impact of IFRS 18 Presentation

and disclosure in financial statements as adopted by the

UK Endorsement Board, which will be effective for

reporting periods beginning on or after 1 January 2027.

Notes to the consolidated financial statements continued

152 Bytes Technology Group plc

FINANCIAL STATEMENTS

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.

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 determined that, consistent with the prior year,

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.

Notes to the consolidated financial statements continued

154 Bytes Technology Group plc

FINANCIAL STATEMENTS

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.

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 Rebates and 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

When the Group sells on behalf of a vendor who invoices

the customer, the Group earns a fee from the vendor for

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.

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.

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26 155

FINANCIAL STATEMENTS

1.13 Income tax continued

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.

1.14 L ea s es

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.

Notes to the consolidated financial statements continued

156 Bytes Technology Group plc

FINANCIAL STATEMENTS

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.

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 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 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 2025

26 157

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 2026, 28 February 2025, and 1 March 2024

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. 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

f low 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.

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. Amortisation is recognised in profit

or loss on a straight-line basis over their expected

useful lives.

The useful lives for the brands and customer relationships

are as follows:

• • Customer relationships, 10 years

• • Brands, 5 years.

158 Bytes Technology Group plc

FINANCIAL STATEMENTS

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.

Amortisation is recognised in profit or loss on a straight-

line basis over their expected useful lives. 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.

Annual Report and Accounts 2025

26 159

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

1.25 Employee benefits continued

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 26.

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.

When share capital recognised as equity is repurchased,

the amount of the consideration paid, including directly

attributable costs, is recognised as a deduction

from equity.

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.

160 Bytes Technology Group plc

FINANCIAL STATEMENTS

2 Segmental information

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.

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	28 February
	2026	2025
Revenue by product	£’000	£’000
Software	145,208	146,002
Hardware	31,266	33,216
Services internal	39,312	34,032
Services external	4,776	3,884
Total revenue from contracts with customers	220,562	217,13 4

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	28 February
	2026	2025
Revenue by geographical regions	£’000	£’000
United Kingdom	211,904	209,854
Europe	4,988	4,112
Rest of world	3,670	3,16 8
	220,562	217,13 4

Annual Report and Accounts 2025

26 161

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	28 February
	2026	2025
	£’000	£’000
Software	2,233,393	2,005,289
Hardware	31,266	33,216
Services internal	39,312	34,032
Services external	37,077	27,267
	2,341,048	2,099,804
Gross invoiced income	2,341,048	2,099,804
Adjustment to gross invoiced income for income recognised as agent	(2 ,12 0,4 86)	(1,882,670)
Revenue	220,562	217,13 4

Gross invoiced income reflects gross income billed to customers adjusted for movements in deferred and accrued revenue

items amounting to a £5.9 million reduction (2025: £7.7 million reduction). 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:

Note

		Year ended	Year ended
		28 February	28 February
		2026	2025
		£’000	£’000
Depreciation of property, plant and equipment	9	1,314	1,255
Depreciation of right-of-use assets	10	706	509
Amortisation of acquired intangible assets	11	880	880
System support and maintenance 1		6,171	4,670
Share-based payment expenses	26	751	5,049
Expenses relating to short-term leases	10	433	348
Foreign exchange losses		198	55
Rental income		(625)	(105)

1 Year-on-year movement driven by business growth, increased headcount and implementation of new systems .

5 Employees

		Year ended	Year ended
		28 February	28 February
		2026	2025
Employee benefit expense:	Note	£’000	£’000
Employee remuneration (including directors’ remuneration 1 )		63,775	55,497
Commissions and bonuses		24,884	24,837
Social security costs		12,008	9,762
Pension costs		2,340	2,009
Share-based payments expense	26	751	5,049
		103,758	9 7,15 4
Classified as follows:
Cost of sales		21,723	19,098
Administrative expenses		82,035	78,056
		103,758	9 7,15 4

1 Directors’ remuneration is included in the directors’ remuneration report on pages 112 to 128.

162 Bytes Technology Group plc

FINANCIAL STATEMENTS

	Year ended	Year ended
	28 February	28 February
	2026	2025
The average monthly number of employees during the year was:	£’000	£’000
Sales – account management	331	378
Sales – support and specialists	367	251
Service delivery	325	290
Administration	265	231
	1, 2 8 8	1,150

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	28 February
	2026	2025
	£’000	£’000
Fees payable to the company’s auditors and its associates for the audit of the parent company and consolidated financial statements	304	316
Fees payable to the company’s auditors and its associates for other services:
Audit of the financial statements of the company’s subsidiaries	442	450
Non-audit services 1	110	105
	856	871

1 Non-audit services in the current and prior year relate to the auditor’s review of our interim report issued in October of each year.

7 Finance income and costs

	Year ended	Year ended
	28 February	28 February
	2026	2025
	£’000	£’000
Finance income
Bank interest received 1	7,57 7	8,486
Finance income	7,57 7	8,486
Finance costs
Interest expense on financial liabilities measured at amortised cost	(239)	(224)
Interest expense on lease liability	(80)	(67)
Finance costs	(319)	(2 91)

1 Interest received on cash deposited on money market.

Annual Report and Accounts 2025

26 163

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	28 February
	2026	2025
	£’000	£’000
Current income tax charge in the year	16,392	19,175
Adjustment in respect of current income tax of previous years	(57)	(18)
Total current income tax charge	16,335	19,157
Deferred tax charge/(credit) in the year	2,233	604
Adjustments in respect of prior year	(18)	11
Deferred tax charge	2,215	615
Total tax charge	18,550	19,772

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	28 February
	2026	2025
	£’000	£’000
Profit before income tax	69,832	74,613
Income tax charge at the standard rate of corporation tax in the UK of 25% (2024: 25%)	17, 4 5 8	18,653
Effects of:
Non-deductible expenses	1,12 7	1,124
Adjustment to previous periods	(75)	(7)
Effect of share of profit of associate	40	2
Income tax charge reported in profit or loss	18,550	19,772

Amounts recognised directly in equity

	Year ended	Year ended
	28 February	28 February
	2026	2025
	£’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	(4 31)	(160)
Current tax: share-based payments	180	31
	(251)	(129)

The Base Erosion and Profit Shifting Pillar Two model rules apply to multinational enterprises with revenues exceeding

€750 million. Group revenues do not exceed €750 million and therefore the rules do not apply to the Group.

164 Bytes Technology Group plc

FINANCIAL STATEMENTS

	As at	As at
	28 February	28 February
	2026	2025
Deferred tax (liability)/asset – net	£’000	£’000
The balance comprises temporary differences attributable to:
Intangible assets	(348)	(568)
Property, plant and equipment	(3 ,18 8)	(2,088)
Employee benefits	6	6
Provisions	297	74
Share-based payments	646	2,635
	(2,587)	59

	As at	As at
	28 February	28 February
	2026	2025
Net deferred tax asset reconciliation	£’000	£’000
At 1 March	59	834
Intangible assets	220	220
Property, plant and equipment	(1,100)	(1,029)
Employee benefits	–	5
Provisions	223	1
Share-based payments	(1,558)	188
Charge to profit or loss	(2,215)	(615)
Share-based payments	(431)	(160)
Charge to equity	(4 31)	(160)
Carrying amount at end of year	(2,587)	59

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 2025

26 165

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 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
Additions	1,122	563	122	–	9	1,816
Disposals	(799)	(1,688)	(732)	(637)	(30)	(3,886)
At 28 February 2026	15,861	4,429	760	629	44	21,723
Depreciation
At 1 March 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
On disposals	(798)	(1,688)	(732)	(637)	(30)	(3,885)
Charge for the year	513	594	60	138	9	1,314
At 28 February 2026	3,036	3,533	469	573	30	7,6 41
Net book value
At 28 February 2025	12,217	927	229	194	14	13,581
At 28 February 2026	12,825	896	291	56	14	14,082

In the prior 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 2024	1,377	891	2,268
Additions	–	739	739
At 28 February 2025	1,377	1,630	3,007
Additions	–	856	856
Disposal	–	(47)	(47)
At 28 February 2026	1,377	2,439	3,816
Depreciation
At 1 March 2024	738	119	857
Charge for the period	145	364	509
At 28 February 2025	883	483	1,366
On disposals	–	(10)	(10)
Charge for the period	145	561	706
At 28 February 2026	1,028	1,034	2,062
Net book value
At 1 March 2024	639	772	1,411
At 28 February 2025	494	1,147	1,6 41
At 28 February 2026	349	1,405	1,754

Notes to the consolidated financial statements continued

166 Bytes Technology Group plc

FINANCIAL STATEMENTS

	As at	As at	As at
	28 February	28 February	1 March
	2026	2025	2024
Lease liabilities	£’000	£’000	£’000
Current	842	668	423
Non-current	1,138	1,269	1,314
	1,980	1,937	1,737

There were additions of £0.9 million to the right-of-use assets in the financial year ended 28 February 2026

(2025: £0.7 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	28 February
	2026	2025
	£’000	£’000
Depreciation charge of right-of-use assets	706	509
Interest expense (included in finance cost)	80	67
Expense relating to short-term leases (included in administrative expenses)	433	348

Changes in liabilities arising from financing activities

	As at					As at
	1 March					28 February
	2025	Additions	Disposal	Cash flows	Interest	2026
	£’000	£’000	£’000	£’000	£’000	£’000
Lease liabilities	1,937	856	(37)	(856)	80	1,980
Total liabilities from financing activities	1,937	856	(37)	(856)	80	1,980

	As at					As at
	1 March					28 February
	2024	Additions	Disposal	Cash flows	Interest	2025
	£’000	£’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

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.

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
Operating lease receivables	£’000	£’000	£’000	£’000	£’000	£’000
28 February 2026	464	464	244	87	87	72
28 February 2025	464	464	464	244	87	159

Annual Report and Accounts 2025

26 167

FINANCIAL STATEMENTS

11 Intangible assets

		Customer
	Goodwill	relationships	Brand	Software	Total
	£’000	£’000	£’000	£’000	£’000
Cost
At 1 March 2024	37,49 3	8,798	3,653	–	49,944
Additions	–	–	–	3,709	3,709
At 28 February 2025	37,4 9 3	8,798	3,653	3,709	53,653
Additions	–	–	–	4,097	4,097
At 28 February 2026	37,493	8,798	3,653	7,80 6	57,750
Amortisation
At 1 March 2024	–	5,645	3,653	–	9,298
Charge for the year	–	880	–	–	880
At 28 February 2025	–	6,525	3,653	–	10,178
Charge for the year	–	880	–	210	1,090
At 28 February 2026	–	7,4 0 5	3,653	210	11, 2 6 8
Net book value
At 28 February 2025	37,4 9 3	2,273	–	3,709	43,475
At 28 February 2026	37,493	1,393	–	7,5 9 6	46,482

During the year the Group capitalised internal software development costs of £4.1 million (2025: £3.7 million).

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. 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 2026	%	%	£’000
Bytes Software Services	2	9.30	14,775
Phoenix Software	2	9.30	22,718
			37,493

	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

Notes to the consolidated financial statements continued

168 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

and forecast 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 2026	£’000	£’000
Headroom	492,895	228,114
1% increase in the post-tax discount rate applied to the forecast future cash flows	(68,853)	(32,385)
1% decrease in the post-tax discount rate applied to the forecast future cash flows	90,968	42,792
0.5% increase in the terminal growth rate	32,314	15,209
0.5% decrease in the terminal growth rate	(2 8 ,171)	(13,259)

	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)

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

The Group has a 25.1% interest in Cloud Bridge Technologies Limited, a company with a principal place of business in the

United Kingdom. The Group’s interest in Cloud Bridge Technologies Limited is accounted for using the equity method.

	As at	As at
	28 February	28 February
	2026	2025
	£’000	£’000
Current assets	11,047	7, 9 8 0
Non-current assets	405	108
Current liabilities	(9,340)	(5,016)
Non-current liabilities	(439)	(771)
Equity	1,673	2,301
Group’s share in equity – 25%	420	578
Goodwill	2,607	2,607
Group’s carrying amount of the investment	3,027	3,18 5

Annual Report and Accounts 2025

26 169

FINANCIAL STATEMENTS

12 Investment in an associate continued

	Year ended	Year ended
	28 February	28 February
	2026	2025
	£’000	£’000
Revenue	34,881	28,920
Cost of sales	(29,625)	(26,755)
Administrative expenses	(5,874)	(2,340)
Finance costs	(50)	(56)
Profit before tax	(668)	(231)
Income tax expense	43	198
Profit for the period	(625)	(33)
Group’s share of profit for the period	(158)	(8)

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 2026.

In preparing the financial statements, the Group has considered whether there are impairment indicators present which

would require an adjustment to be made to the £3.0 million carrying amount of the investment as at 28 February 2026.

Management have also 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.

Combined with current performance metrics and the forecasts produced, the Group concludes there to be no impairment of

the carrying amount of the investment at the reporting date.

13 Contract assets

	As at	As at
	28 February	28 February
	2026	2025
	£’000	£’000
Contract assets	8,724	11,74 6

Contract assets is further broken down as:

	As at	As at
	28 February	28 February
	2026	2025
	£’000	£’000
Short-term contract assets	8,027	9,973
Long-term contract assets	697	1,773
	8,724	11,74 6

Contract assets include £2.6 million (2025: £1.7 million) of deferred costs relating to internal services contracts, and the

recognition of accrued revenue of £6.1 million (2025: £10.0 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

170 Bytes Technology Group plc

FINANCIAL STATEMENTS

14 Contract liabilities

	As at	As at
	28 February	28 February
	2026	2025
	£’000	£’000
Contract liabilities	29,245	27,279

Contract liabilities is further broken down as:

	As at	As at
	28 February	28 February
	2026	2025
	£’000	£’000
Short-term contract liabilities	27,17 8	25,245
Long-term contract liabilities	2,067	2,034
	29,245	27,279

During the year, the Group recognised £25.2 million (2025: £19.3 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 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:

Financial assets Note

		As at	As at
		28 February	28 February
		2026	2025
		£’000	£’000
Financial assets at amortised cost:
Trade receivables	16	290,193	259,224
Other receivables	16	6,750	6,917
		296,943	26 6 ,141

Financial liabilities Note

		As at	As at
		28 February	28 February
		2026	2025
		£’000	£’000
Financial liabilities at amortised cost:
Trade and other payables – current, excluding payroll tax and other statutory tax liabilities		322,865	301,669
Lease liabilities	10	1,980	1,937
		324,845	303,606

The Group’s exposure to various risks associated with the financial instruments is discussed in note 22. 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 2025

26 171

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

16 Trade and other receivables

	As at	As at
	28 February	28 February
	2026	2025
	£’000	£’000
Financial assets
Gross trade receivables	291,479	260,883
Less: impairment allowance	(1,286)	(1,659)
Net trade receivables	290,193	259,224
Other receivables	6,750	6,917
	296,943	26 6 ,141
Non-financial assets
Prepayments	2,944	2,313
	2,944	2,313
Trade and other receivables	299,887	268,454

(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 2026	£’000	£’000	£’000	£’000	£’000	£’000
Expected loss rate	0.06%	0.22%	2.34%	4.23%	36.69%
Gross carrying amount
– trade receivables	248,956	28,200	8,168	4,209	1,946	291,479
Loss allowance	141	62	191	178	714	1,286

		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	2 3 2,118	17,4 95	5,201	4,18 9	1,880	260,883
Loss allowance	162	45	151	458	843	1,659

The closing loss allowances for trade receivables reconcile to the opening loss allowances as follows:

Trade receivables

	As at	As at
	28 February	28 February
	2026	2025
	£’000	£’000
Opening loss allowance at 1 March	1,659	2,490
Increase/(decrease) in loss allowance recognised in profit or loss during the period	301	(108)
Receivables written off during the year as uncollectable	(674)	(723)
Closing loss allowance	1,286	1,659

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 £5.3 million (2025: £5.6 million).

172 Bytes Technology Group plc

FINANCIAL STATEMENTS

17 Cash and cash equivalents

	As at	As at
	28 February	28 February
	2026	2025
	£’000	£’000
Cash at bank and in hand	5,246	6,276
Short-term deposits	93,400	106,800
	98,646	113,076

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.

18 Trade and other payables

	As at	As at
	28 February	28 February
	2026	2025
	£’000	£’000
Trade and other payables	218,542	179,003
Accrued expenses	115, 2 9 0	122,666
Payroll tax and other statutory liabilities	25,365	25,864
	359,197	327,533

Trade payables are unsecured and are usually paid within 45 days of recognition. Accrued expenses include 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.

19 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 2024	240,356,898	2,404	633,650	636,054
Shares issued during the year	711,3 6 7	7	2,782	2,789
At 28 February 2025	241,068,265	2,411	636,432	638,843
Shares issued during the year	1,775,559	18	5,082	5,10 0
Cancellation of own shares	(6,473,731)	(65)	–	(65)
At 28 February 2026	236,370,093	2,364	641,514	643,878

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 26.

In August 2025, the company commenced a share repurchase programme to purchase its own ordinary shares. The total

number of shares bought back was 6,473,731 representing 2.69% of the ordinary shares in issue. All the shares bought back

were cancelled. The shares were acquired on the open market for a consideration (excluding costs) of £25.0 million. The

average price paid was £3.86. Costs amounting to £0.2 million were incurred on the purchase of own shares in relation to

stamp duty charges and broker expenses.

Annual Report and Accounts 2025

26 173

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

20 Merger reserve

	As at	As at
	28 February	28 February
	2026	2025
	£’000	£’000
Balance at 1 March 2024, 28 February 2025 and 28 February 2026	(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.

21 Cash generated from operations

Note

		Year ended	Year ended
		28 February	28 February
		2026	2025
		£’000	£’000
Profit before taxation		69,832	74,613
Adjustments for:
Depreciation and amortisation	4	3 ,110	2,644
Loss on disposal of property, plant and equipment		1	–
Non-cash employee benefits expense – share-based payments	4	751	5,049
Share of loss of associate		158	8
Finance income	7	(7,577)	(8,486)
Finance costs	7	319	291
Decrease in contract assets		3,022	2,699
Increase in trade and other receivables		(31,433)	(46,639)
Decrease in inventories		14	46
Increase in trade and other payables		31,665	49,616
Increase in contract liabilities		1,965	5,794
Cash generated from operations		71,827	85,635

22 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 16.

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.

22(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.

174 Bytes Technology Group plc

FINANCIAL STATEMENTS

22(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 2026			As at 28 February 2025
	USD	EUR	NOK	USD	EUR	NOK
	£’000	£’000	£’000	£’000	£’000	£’000
Trade receivables	14,522	6,777	–	11,348	3,945	–
Cash and cash
equivalents	3,469	773	–	3,627	155	–
Trade payables	(21,401)	(5,791)	(55)	(18,663)	(3,529)	(53)
	(3,410)	1,759	(55)	(3,688)	571	(53)

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 2026			As at 28 February 2025
	GBP:USD	GBP:EUR	GBP:NOK	GBP:USD	GBP:EUR	GBP:NOK
	£’000	£’000	£’000	£’000	£’000	£’000
5% strengthening in GBP	162	(84)	3	176	(27)	3
5% weakening in GBP	(179)	93	(3)	(194)	30	(3)

The aggregate net foreign exchange gains/losses recognised in profit or loss were:

	Year ended	Year ended
	28 February	28 February
	2026	2025
	£’000	£’000
Total net foreign exchange losses in profit or loss	198	55

22(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 2026, the Group had cash and cash equivalents of £98.6 million, see note 17. 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. This 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 2026 and 28 February

2025, 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 2026 and 28 February 2025 and has therefore complied with the Net debt to EBITDA

covenant.In May 2026 the Group extended the RCF by three years to 17 May 2029. This extension has increased the

non-committed accordion to £45 million and is subject to the same financial covenants noted above.

Annual Report and Accounts 2025

26 175

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

22 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 2026	Note	£’000	£’000	£’000	£’000	£’000	£’000
Trade and other payables	18	322,865	–	–	–	322,865	322,865
Lease liabilities	10	873	742	419	–	2,034	1,980
		323,738	742	419	–	324,899	324,845

						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	18	301,669	–	–	–	301,669	301,669
Lease liabilities	10	726	689	627	–	2,042	1,937
		302,395	689	627	–	303,711	303,606

23 Capital management

23(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.

23(b) Dividends

Ordinary shares

	2026		2025
	Pence per share	£’000	Pence per share	£’000
Interim dividend paid	3.2	7,6 04	3.1	7,4 69
Special dividend paid	10.0	24,269	8.7	20,936
Final dividend paid	6.9	16,745	6.0	14,438
Total dividends attributable to ordinary shareholders	20.1	48,618	17.8	42,843

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. For this purpose all retained earnings of the company are available

distributable reserves.

The Board has proposed a final ordinary dividend of 7 .0 pence per share for the year ended 28 February 2026 to be paid to

shareholders on the register as at 17 July 2026. The aggregate of the proposed dividends expected to be paid on 31 July

2026 is £16.5 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.

176 Bytes Technology Group plc

FINANCIAL STATEMENTS

24 Capital commitments

At 28 February 2026, the Group had £Nil capital commitments (28 February 2025: £Nil).

25 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:

25(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	28 February
	2026	2025
	£’000	£’000
Short-term employee benefits	3,515	4,591
Post-employment pension benefits	119	121
Total compensation paid to key management	3,634	4,712

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 522,725 share option awards (2025: 376,082) at a weighted average exercise

price of £0.17 (2025: £0.21).

Share-based payment charges include £1,708,222 (2025: £1,570,816) in respect of key management personnel, refer to

note 26 for details on the Group’s share-based payment incentive schemes.

25(b) Subsidiaries and associates

Interests in subsidiaries are set out in note 28 and the investment in associate is set out in note 12.

25(c) Outstanding balances arising from sales/purchases of services

Group companies made purchases from the associate of £6.7 million (2025: £4.9 million) and sales to the associate of

£0.2 million (2025: £0.1 million) during the year with a trade payable balance of £0.9 million (2025: £0.1 million) at the

year end.

26 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 2026 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 1,048,300 (2025:

961,569) options. For the year ended 28 February 2026, 195,974 (2025: 47,463) options were forfeited, 666,059 options were

exercised (2025: 57,583) and 44,818 (2025: nil) options expired. This was the first year that performance-related options

vested and a number of the performance criteria were not achieved, resulting in a higher number of forfeitures during the year.

Annual Report and Accounts 2025

26 177

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

26 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 (2025: nil) options. For the year ended 28 February 2026, 81,100 (2025: 174,897) options were

forfeited, 1,009,207 (2025: 217,000) options were exercised and 116,977 (2025: nil) 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 489,323 (2025: 449,394)

options. For the year ended 28 February 2026, 439,656 (2025: 214,641) options were forfeited, 78,071 (2025: 425,868)

options were exercised and 326,207 (2025: 32,865) options expired. The higher level of forfeitures reflects the reduction in

share price during the year, resulting in a higher number of staff withdrawing from the scheme.

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 43,171 (2025: 16,675) options. For the year ended 28 February 2026, 21,772 (2025:

10,916) options were exercised. No options were forfeited or expired in the current or prior period.

There were no cancellations or modifications to the awards in 2026 or 2025.

Share-based payment employee expenses

	Year ended	Year ended
	28 February	28 February
	2026	2025
	£’000	£’000
Equity settled share-based payment expenses	751	5,049

The share-based payment charges are expensed over the vesting period to reflect the expected number of options that will

vest for each plan at each vesting date. Key judgements are made involving the estimation of future forfeiture rates and

achievement of performance conditions. These judgements are updated at each reporting date when assessing the likely

number of options that will vest on completion of the relevant performance periods.

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	28 February	28 February
	2026	2026	2025	2025
	Number	WAEP	Number	WAEP
Outstanding at 1 March	9,060,276	£3 .14	8,813,260	£3.52
Granted during the year	1,580,794	£1.30	1,428,249	£1.4 4
Forfeited during the year	(716,730)	£3.08	(4 37,0 01)	£3.96
Exercised during the year	(1,7 75,10 9) 1	£2.87	(711,367) 1	£3.92
Expired during the year	(503,965)	£3.66	(32,865)	£4.00
Outstanding at 28 February	7,6 45,26 6	£2.79	9,060,276	£ 3 .14
Exercisable at 28 February	4,0 07,132	£4.55	2,802,279	£4.02

1 The weighted average share price at date of exercise was £5.03 (2025: £5.09).

178 Bytes Technology Group plc

FINANCIAL STATEMENTS

The weighted average expected remaining contractual life for the share options outstanding at 28 February 2026 was 1.02

years (2025: 1.53 years).

The weighted average fair value of options granted during the year was £3.19 (2025: £3.93).

The range of exercise prices for options outstanding at the end of the year was £0.01 to £5.00 (2025: £0.01 to £5.00).

The tables below list the inputs to the models used for the awards granted under the below plans for the years ended

28 February 2026 and 28 February 2025:

	28 February	28 February	28 February
	2026	2026	2026
Assumptions	PISP	SAYE	DBP
Weighted average fair value at measurement date	£3.55 - £4.34	£0.62	£5.05
Expected dividend yield	3.96% - 4.86%	5.53%	0.00%
Expected volatility	35% - 40%	40%	35%
Risk-free interest rate	3.76% - 3.85%	3.69%	3.73%
Expected life of options	3 years	3 years	2 years
Weighted average share price	£5.06 - £4.12	£3.61	£5.06
Model used	Black-Scholes	Black-Scholes	Black-Scholes
	and Monte Carlo

	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

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.

27 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	28 February
	2026	2025
	pence	pence
Basic earnings per share	21.40	22.78
Diluted earnings per share	20.74	21.95
Headline earnings per share	21.40	22.78
Diluted headline earnings per share	20.74	21.95
Adjusted earnings per share	22.64	25.07
Diluted adjusted earnings per share	21.94	24.16

Annual Report and Accounts 2025

26 179

FINANCIAL STATEMENTS

Notes to the consolidated financial statements continued

27 Earnings per share continued

27(a) Weighted average number of shares used as the denominator

		Year ended	Year ended
		28 February	28 February
		2026	2025
		Number	Number
Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share and headline earnings per share		239,627,247	240,750,619
Adjustments for calculation of diluted earnings per share and diluted
headline earnings per share:
փ	share options 1	7,599, 4 0 7	9,060,276
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		247,22 6,654	249,810,895

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 26.

27(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:

Note

		Year ended	Year ended
		28 February	28 February
		2026	2025
		£’000	£’000
Profit for the period attributable to owners of the company		51,282	54,841
Adjusted for:
Loss on disposal of property, plant and equipment	21	1	–
Tax effect thereon		–	–
Headline profits attributable to owners of the company		51,283	54,841

27(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:

Note

			Year ended	Year ended
			28 February	28 February
			2026	2025
			£’000	£’000
Profits attributable to owners of the company			51,282	54,841
Adjusted for:
փ	Amortisation of acquired intangible assets	4	880	880
փ	Deferred tax effect on above		(220)	(220)
փ	Share-based payment charges	26	751	5,049
փ	Deferred tax effect on above		1,558	(188)
Adjusted profits attributable to owners of the company			54,251	60,362

180 Bytes Technology Group plc

FINANCIAL STATEMENTS

28 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 private and public sectors
Phoenix Software Limited	UK	100%	Providing cloud-based licensing and infrastructure and security
			sales within both the private 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.

29 Events after the reporting period

As disclosed in note 22(c)(2) the Group entered into a three-year extension of the RCF.

After year end, the Board agreed to implement a new share repurchase programme to purchase the company’s shares for

an aggregate value of up to £25.0 million.

There are no other events after the reporting period that require disclosure.

Annual Report and Accounts 2025

26 181

FINANCIAL STATEMENTS

Note

As at

28 February

2026

£’000

As at

28 February

2025

£’000

Assets

Non-current assets

Investments 5 641,998 641,998

Property, plant and equipment 6 – 55

Deferred tax assets 4 152 320

Total non-current assets 642,150 642,373

Current assets

Trade and other receivables 7 15,059 255

Cash and cash equivalents 26,466 62,394

Total current assets 41,525 62,649

Total assets 683,675 705,022

Current liabilities

Trade and other payables 8 (1,656) (2,106)

Current tax liability (242) (296)

Total current liabilities (1,898) (2,402)

Total liabilities (1,898) (2,402)

Net assets 681,777 702,620

Equity

Share capital 10 2,364 2,411

Share premium 10 641,514 636,432

Share-based payment reserves 10,132 13,927

Retained earnings

27,767 49,850

Total equity 681,777 702,620

1 The profit for the company for the period was £47,111,0 0 0 (2025: £50,077,000).

The financial statements on pages 182 to 191 were approved by the Board on 11 May 2026 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 2026

182 Bytes Technology Group plc

PARENT COMPANY FINANCIAL STATEMENTS

Note

Attributable to owners of the company

capital

£’000

premium

£’000

Other

reserves

£’000

Retained

earnings

£’000

Total

£’000

At 1 March 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

Total comprehensive income for the year – – – 47,111 47,111

Dividends paid – – – (48,618) (48,618)

Shares issued during the year 10 18 5,082 – – 5,10 0

Transfer to retained earnings – – (4,611) 4 ,611 –

Share-based payment transactions – – 751 – 751

Purchase and cancellation of own shares (65) – 65 (25,000) (25,000)

Costs of share purchases – – – (187) (187)

Balance at 28 February 2026 2,364 641,514 10,13 2 27,767 681,777

Company statement of change in equity

For the year ended 28 February 2026

Annual Report and Accounts 2025

26 183

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 2026 were approved

and signed by the Chief Executive Officer on 11 May 2026

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 193. 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 2026.

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.

The other area involving accounting estimates is:

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.

184 Bytes Technology Group plc

PARENT COMPANY FINANCIAL STATEMENTS

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 2025:

• • Lack of exchangeability – Amendments to IAS 21

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 2026 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.

• • Classification and measurement of financial

instruments – Amendments to IFRS 7 and IFRS 9

• • Nature-dependent electricity contracts –

Amendments to IFRS 9 and IFRS 7

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 2025

26 185

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 2026 includes short-term deposits of

£26.4 million (2025: £62.3 million).

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.

186 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.

When share capital recognised as equity is repurchased,

the amount of the consideration paid, including directly

attributable costs, is recognised as a deduction from

equity.

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 2025

26 187

FINANCIAL STATEMENTS

2 Directors’ remuneration

Remuneration of directors:

Year ended

28 February

2026

£’000

Year ended

28 February

2025

£’000

Directors’ remuneration

1,328 1,967

Social security costs 176 263

Pension costs 34 31

1,538 2,261

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 128.

3 Employee costs and numbers

Employee benefit expense:

Year ended

28 February

2026

£’000

Year ended

28 February

2025

£’000

Employee remuneration 1,094 912

Social security costs 148 109

Pension costs 38 28

1,280 1,049

The average monthly number of employees during the period was:

Year ended

28 February

2026

Number

Year ended

28 February

2025

Number

Administration 9 8

9 8

4 Income tax expense

The major components of the company’s income tax expense are:

Year ended

28 February

2026

£’000

Year ended

28 February

2025

£’000

Current income tax charge in the year 622 606

Adjustment in respect of current income tax of previous years 1 (7)

Total current income tax charge 623 599

Deferred tax charge/(credit) in the year 168 (186)

Adjustments in respect of prior year – 7

Deferred tax charge/(credit) 168 (179)

Total tax charge 791 420

Notes to the financial statements continued

188 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

2026

£’000

Year ended

28 February

2025

£’000

Profit before income tax 47,90 2 50,497

Income tax charge at the standard rate of corporation tax in the UK of 25% (2025: 25%) 11,976 12,624

Effects of:

Non-deductible expenses 114 46

Non-taxable income (11,3 0 0) (12,250)

Adjustments to previous periods 1 –

Income tax charge reported in profit or loss 791 420

Deferred tax assets

As at

28 February

2026

£’000

As at

28 February

2025

£’000

The balance comprises temporary differences attributable to:

Property, plant and equipment – (14)

Share-based payments 152 334

152 320

Deferred tax assets

As at

28 February

2026

£’000

As at

28 February

2025

£’000

At 1 March 320 141

(Charged)/credited to profit or loss (168) 179

Carrying amount at end of year 152 320

5 Investment in subsidiaries

As at

28 February

2026

£’000

As at

28 February

2025

£’000

Balance at 1 March 2024, 28 February 2025 and 28 February 2026 641,998 641,998

Subsidiary undertakings

A detailed listing of the company’s direct and indirect subsidiaries is set out in note 28 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 sum of 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 2025

26 189

FINANCIAL STATEMENTS

6 Property, plant and equipment

Computer

software

£’000

Total

£’000

Cost

At 1 March 2024, 28 February 2025 and 28 February 2026 198 198

Depreciation

At 1 March 2024 77 77

Charge for the year 66 66

At 28 February 2025 143 143

Charge for the year 55 55

At 28 February 2026 198 198

Net book value

At 28 February 2025 55 55

At 28 February 2026 – –

7 Trade and other receivables

As at

28 February

2026

£’000

As at

28 February

2025

£’000

Amounts due from other Group companies

14,881 –

Prepayments 178 255

15,059 255

1 Amounts due from other Group companies are unsecured, interest free, and have been repaid after year end.

8 Trade and other payables

As at

28 February

2026

£’000

As at

28 February

2025

£’000

Trade and other payables 1,656 1,933

Amounts due to other Group companies

– 173

1,656 2,106

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. The Group has entered into a three-year

extension of the RCF. For further details on the RCF, see note 22(c) in the notes to the consolidated financial statements of

the Group.

Notes to the financial statements continued

190 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 2024 240,356,898 2,404 633,650 636,054

Shares issued during the period 711,3 6 7 7 2,782 2,789

At 28 February 2025 241,068,265 2,411 636,432 638,843

Shares issued during the period 1,775,559 18 5,082 5,10 0

Cancellation of own shares (6,473,731) (65) – (65)

At 28 February 2026 236,370,093 2,364 641,514 643,878

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.

In August 2025, the company commenced a share buyback programme to purchase its own ordinary shares. The total

number of shares bought back was 6,473,731 representing 2.69% of the ordinary shares in issue. All the shares bought back

were cancelled. The shares were acquired on the open market for a consideration (excluding costs) of £25.0 million. The

average price paid was £3.86. Costs amounting to £0.2 million were incurred on the purchase of own shares in relation to

stamp duty charges and broker expenses.

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 23(b) – Dividends

Note 25(a) – Transactions with key management personnel

Note 26 – Share-based payments

Note 29 – Events after the reporting period

Annual Report and Accounts 2025

26 191

FINANCIAL STATEMENTS

Other information

193 Glossary

195 Company information

195 Financial calendar

Bytes Technology Group plc192

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

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

CISO: Chief Information Security Officer

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

CPO: Chief People Officer

CSOP: Company Share Option Plan

CSP: the Microsoft Cloud Solutions Provider programme

CTO: Chief Technology Officer

DBP: Deferred Share Bonus Plan

disintermediation: direct vendor sales to end customers

EA: Microsoft enterprise agreement

ECCTA: Economic Crime and Corporate Transparency Act 2023

eNPS: employee net promoter score

EPS: earnings per share

ESG: environmental, social and governance

EV: electric vehicle

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

GDSA: Government Digital Sustainability Alliance

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

IEA: International Energy Agency

IPCC: International Panel on Climate Change

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

LSE: London Stock Exchange plc

LTI: Long Term Incentives

Main Market: the London Stock Exchange’s main market

forlisted securities

MD: Managing Director

NCSC: National Cyber Security Centre

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

Annual Report and Accounts 2025

26 193

Glossary continued

Phoenix: Phoenix Software Limited, a private limited company

incorporated under English and Welsh law, with registration

number 02548628

PSP: Performance Share Plan

QBR: quarterly business review

RCF: revolving credit facility

REGO: Renewable Energy Guarantees of Origin

RGGO: Renewable Gas Guarantees of Origin

SAYE: Save As You Earn (ShareSave – employee share scheme)

SBP: share-based payment

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

SRS: Sustainability Reporting Standards

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

194 Bytes Technology Group plc

OTHER INFORMATION

Financial calendar Endnotes

Company information

Bytes Technology Group plc

A public limited company

incorporatedin England and 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

12 May 2026

Release of results for the financial

year ended 28 February 2026

9 July 2026 14:00 (BST)

Annual General Meeting

October 2026

Interim results

1 gartner.com/en/newsroom/press-releases/2026-02-03-gartner-forecasts-

worldwide-it-spending-to-grow-10-point-8-percent-in-2026-totaling-6-point-15-

trillion-dollars

2 gartner.com/en/newsroom/press-releases/gartner-forecasts-information-

information-spending-in-europe-to-grow-11-percent-in-2026

3 kpmg.com/uk/en/media/press-releases/2026/01/cybersecurity-emerges-as-a-top-

spending-priority.html

4 ncsc.gov.uk/news/uk-experiencing-four-nationally-significant-cyber-attacks-weekly

5 checkpoint.com/press-releases/check-point-softwares-2026-cyber-security-

report-shows-global-attacks-reach-record-levels-as-ai-accelerates-the-threat-

landscape/

6 redhat.com/en/about/press-releases/red-hat-survey-uk-organizations-ready-

widespread-ai-adoption-skills-gaps-high-costs-and-shadow-ai-threaten-ambition

Public relations

Sodali & Co

Elly Williamson

Tilly Abraham

+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

21 Moorfields

London

EC2Y 9DB

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

3 Stonecutter Street

London

EC4A 4AW

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 2025

26 195

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

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