Bytes Technology Group has acquired CyberOne, a leading UK cybersecurity services provider, for £19.4m. The acquisition, funded from existing cash resources, aims to strengthen Bytes' capabilities across the cybersecurity lifecycle. CyberOne provides AI-enabled managed security services, security operations, and cyber resilience consulting to enterprise and mid-market customers. The acquisition is subject to regulatory clearance, expected shortly.
The acquisition of CyberOne complements Bytes' existing strengths, particularly in the Microsoft security ecosystem. CyberOne has established a strong position within this ecosystem, offering proprietary services and specialist expertise. Bytes expects the acquisition to support deeper customer relationships and increased service-led revenue opportunities across the combined customer base. CyberOne was established in 2005 and delivered high double-digit revenue growth in the 12 months ended July.
Bytes reported a 6% rise in earnings for the first half, ahead of its expectations. The company's gross invoiced income rose 19.6% to £1.6bn, with revenue growing 18.7% to £128.3m. Operating profit increased 6.6%, and gross profit rose 17.8% to £97.1m. The positive effects from changes made to the group's sales structure contributed to the growth. HEPS rose 6.1% to 12.76p, and the company declared an interim dividend of 3.3p per share.
Bytes CEO Sam Mudd said CyberOne is a strong strategic fit for the company, enhancing its capabilities in a rapidly growing technology segment. The acquisition combines a proven managed security platform and a growing base of high-margin recurring revenue with Bytes' existing scale and customer reach. Mudd expects the acquisition to support growing customer demand for cybersecurity services.
The demand drivers in Bytes' markets are strengthening, with software spend forecast to grow ahead of IT budgets. AI, cybersecurity, and infrastructure are attracting most incremental investment. Bytes is continuing to invest in its services capability to take a larger share of that spend. The company upgraded its full-year guidance in September following a strong first half.
Bytes expects its post-acquisition operating profit in the 2027 financial year to be offset by amortisation costs of the intangible assets acquired. However, the company forecasts a positive contribution to earnings per share for the 2028 financial year. Microsoft's next set of partner incentive changes takes effect in October, which are expected to be positive for the group.
The acquisition of CyberOne is expected to complete by the end of October. Bytes continues to expect gross profit growth for the full year in the low to mid-teens in percentage terms, with low to mid-single-digit percentage growth in operating profit. The company will continue to invest in its services capability to take advantage of growing demand for cybersecurity services.
Key points
- Bytes Technology Group acquires CyberOne for £19.4m to strengthen its cybersecurity capabilities.
- Bytes reports a 6% rise in first-half earnings, ahead of its expectations.
- The acquisition is expected to support deeper customer relationships and increased service-led revenue opportunities.
