Bytes Software Services results flattered by NHS true-ups


Bytes Software Services results flattered by NHS true-ups

Microscope contributor

Bytes Software Services (BSS) profits and revenues climbed by double digits in fiscal 2011 ended 28 February but the numbers were flattered by one-time true-ups in the NHS that will not be replicated this year.

The Surrey-based reseller bolstered the top line by 13.7% to £149m and grew the bottom line 16.6% to £4.2m.

Neil Murphy, managing director at BSS, told MicroScope: "We had a good year but part of that was the underlying NHS business which is not repeatable."

There were two true-ups in the 12 months, one in June and one in December that represented around £37m and £18m respectively, and around £2.1m in gross profit, following the closure by the NHS of its Microsoft Enterprise Agreement.

Murphy added the numbers were also shaped by its continued "focus on software licensing and Software Asset Management as opposed to having a broader range of products and services."

BSS does not provide its own services but prefers to back them off to "best of breed" partners, it confirmed.

Headcount in the year grew by 41 employees as Bytes opened a Manchester-based telesales operation and invested in building its mid-market and corporate presence with one eye on Microsoft's sweeping cuts to LAR fees in the autumn.

The mid-market and corporate sectors were continuing to revive but Murphy expected that aside from an end-of-year budget flush, the public sector would drop off in fiscal 2012.

He said the firm was not overly concerned about the loss of NHS business, noting "revenue is vanity", but conceded it will look to the expanded commercial team to try and fill the profits from those non-recurring true-ups.

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