Hello, and welcome to Bytes Technology Group's half-year results presentation for the period ending 31st of August, 2024. Andrew and I will talk through slides summarizing our performance, and then we will open the conference call line for Q&A, and we will also receive questions through the webcast chat function. Moving to slide three, I am pleased to report another positive set of results for the group. We have increased our share of wallet among our existing customers as they've continued to invest in their IT needs, and we have also expanded our client base in both the public and corporate sectors. I want to take this opportunity to reflect on the trading environment we've experienced since we last reported results in May, which has continued to be challenging, and with slightly elevated levels of uncertainty related to the snap general election in the U.K. That said, the public sector has remained resilient despite the change of government, while we saw more caution from corporate customers over the summer months. For me, the performance in the period demonstrates the resilience of our two operations. We have established ourselves into many verticals across U.K. corporate mid-market sectors and extensive public sector frameworks to access the right to bid. This provides us with a solid platform from which to grow. Our account management teams maintain strong and enduring relationships, and the low attrition rates we experience across the group means that our key relationship holders stay pivotal and continue to be the engine of our business growth. Importantly, though, we must keep moving forwards, improving and evolving our proposition for customers. We've been building the business to adapt and transform to our customer needs for the future. We've continued to provide excellent advisory services for software and related solutions. Investments have been made in new enterprise-grade systems and office environments to support future growth. Our most recent office opened in Port Solent in September, which will attract more talent and allow us to operate close to clients in that region. The feedback I have received directly from customers underpins the confidence I have in our customer propositions, and I'm excited about this point in time. We're in the very early stages of the take-up of AI-powered software products that have the potential to transform how businesses operate, while structural drivers, such as the requirements for even more sophisticated cybersecurity and cloud-based products, remain as prevalent as ever. I'm looking forward to evolving the business and have an absolute focus on meeting our customers' progressive needs. Moving on to the financial highlights for the period. We delivered over GBP 82 million in gross profit for the first six months, with a 16.3% increase in operating profit, driven by contributions from all areas of the business. Despite the challenges in the U.K. economy and political upheaval over the past six months, our customers have continued to invest in their IT needs as we have expanded our client base in both the public and corporate sectors and increased our share of wallet among existing customers. Gross income for the period was GBP 1.2 billion, up 13.7%, and reflects the busy public sector contracts period and Microsoft year-end in June. It is because of our passionate, talented, and experienced staff that we are well-positioned to continue providing high-quality licensing advice, technical enablement, and support to meet our customer needs. This will remain our defining unique selling proposition, and we believe the momentum is there for us to make continued progress in FY 2025 to execute on our plan. As part of our growth strategy, we continue to hire more sales heads and strengthen the ranks of our sales teams in both operations in readiness for our plans in FY 2026. Headcount increase of 7% to- date aligns well with our growth plans, and this also includes the addition of technical heads, which we see as the important growth driver and enabler for our strategy. Technical heads allow us to devote more advice and guidance into our client discussions and scale our capability in preparedness for future growth with vendors. We also continue to invest in our physical footprint, a move that brings twin benefits. It brings us closer to both the talent in the regions that we operate in and the customers that have offices and operations nearby. During the first half, we opened offices in Sunderland and Portsmouth, and we expanded the floor space of our office in London. We will inevitably consider more locations in the future to continue this strategy. To support the growth in people, we're investing in our internal systems to improve user experiences, drive new efficiencies, while more closely supporting our customers. As part of this, we have recently started two software development projects. One, to build a customer-facing marketplace portal, connecting our customers to our vendor platforms more seamlessly to purchase a wide range of products and link to a new internal platform for order processing. We aim to launch these in the second half of FY 2026. All of this work serves to position us as trusted partners to our customers and ensure that we are able to support their decision-making on their software and IT requirements as market environments evolve. I wanted to take a moment to focus in on one really important part of our business, cybersecurity. Security represents 25% of our GP, and as part of the growth drivers, we will continue to invest in our offerings and more heads to expand our security go-to-market strategies. Product resale and services in this space are part of our core DNA, and the celebration of 25 years heritage in Bytes Security Partnerships that has traded for that period is an example of how embedded into our business the cybersecurity phenomena is. Given that channel accounts for 93% of cybersecurity spend, this is great news for strong security partners like BTG, who have backed the top five main security vendors, such as Check Point, Microsoft, Mimecast, Sophos, Palo Alto, and many others. At Bytes Technology Group, we're incredibly proud of our partnerships with organizations such as Shelter, where we delivered a robust cybersecurity solution to safeguard their operations. By implementing advanced security measures and more resilient framework, we helped Shelter protect sensitive data and ensure the continuity of their vital services. This collaboration reinforced our commitment to providing top-tier cybersecurity solutions while supporting Shelter's critical mission. The success of this project highlights our ability to secure organizations' digital environments and safeguard their futures. We also hold strong customer relationships on the corporate side, as illustrated by the work we did with Howard Kennedy. Here, we partnered with them to align their security controls to industry-recognized frameworks by applying our security methodologies based on several robust controls. We assisted them to validate the approach that they've taken, worked with them to identify areas for improvements for existing technologies or the introduction of new technologies where needed, and thereby helped to strengthen their cybersecurity landscape and protect the security of their client data. The successful approach and execution of this project, again, demonstrated the journey we go on with our clients to support them on their future programs of work, such as around security in this instance, as well as in the security investment decisions based on both commercial and technical requirements. I appreciate this is a very busy slide with a lot of content on it, but we think it's important in demonstrating the strength and breadth of our vendor portfolio. There are a number of key points that I want to land here. As we continue to grow our most strategic vendors and some of the security brands I have just referred to, they are working closely with our operations as one of their most trusted and highly accredited partners in the UK b ecause it is evident we can grow with them and scale and respond with agility when required to do so. We are determined to ensure this remains the case, and that we keep expanding our services offerings with them and other vendors to suit our client needs. Having the right specializations, designations, and accreditations will remain a focus area for us going forwards. We are delighted with our portfolio of partners, and this slide is not exhaustive of all the great partnerships we continue to work strategically with and invest with. Transforming workloads and embracing cloud transformation are critical for organizations aiming to stay competitive and innovative. Bytes have trusted relationships with our customers, vendor partners, and expertise to navigate the paradox of choice involved in leveraging new and emerging technologies that help organizations future-proof themselves. Our accreditations with the major players and our ambitions for growth are focused on following core areas that are significant for our customers. Firstly, enhancing agility and scalability through continued migrations to the cloud resources. The unrealized potential of moving legacy on-premise workloads to multi-cloud is significant. Maintaining cost efficiency amid the increasing demands and complexity involved in economics of cloud consumption, but also the broader strategy of software asset management, which is evolving in line with customer IT changes, more cloud-based technology. Improved security and compliance will continue to be a priority for customers, and the huge footprint within our Microsoft 365 customer base, which leads into wider managed services. We can help to unlock innovation and competitive advantage. As a scale solution partner, we have relationship and access to the key vendor technologies, and we can give customers the inside track on future roadmap. Finally, there is business continuity and disaster recovery. This resilience is crucial for maintaining operations, minimizing downtime, and links closely with security managed service capabilities we are building on. I would like to now hand over to Andrew for our financial performance. Thanks, Sam. Good morning, everyone, and thank you for joining the presentation this morning. I'm really pleased with our performance we've delivered in the first half of the year. All the strategic progress that Sam has talked you through is underpinned by a strong financial position that our business is in. I'll now take you through the key elements before spending some time on our sustainability efforts. Starting with headline figures, Gross Invoiced Income, or GII, again grew by double digits at 13.7% to just over GBP 1.2 billion. Gross profit grew by 9% to GBP 82.1 million. Despite concerns that the early election could impact our growth, I'm pleased to say we experienced very little disruption to our trading patterns and have continued to see positive momentum with several new contract wins. We've also invoiced the second year of our big NHS Microsoft contract, this time for the full 12 months, rather than the 10 months invoiced in the first half of last year. GP over GII this half was 6.7%, a reduction of 0.3% from the comparative period. This reduction reflects a slightly heavier weighting towards the public sector, where contracts are won at a lower margin. I'll touch on this in a bit more detail on the next slide. Within administrative costs, we saw employee costs rising only 4.2%, despite granting pay increases at the beginning of the year and growing our headcount by 73 employees. Of the 73 employees, 51 are accounted for within administrative costs, and 22 that are technical staff, their expenses are accounted in cost of sales. Having last year replaced our HR and payroll systems, we've embarked on a project to modernize all our IT systems. We are replacing our back-end accounting systems, and we have started a project to develop a new billing and sales platform. This will assist in simplifying our processes and future-proofing our business. This development project will create an IP asset, so in line with our accounting policy, we have capitalized the cost, which in turn has reduced the existing employee costs by GBP 700,000. For the last time, we are showing adjusted operating profit, which excludes amortization of acquired intangibles and share-based payments. This is up by 13.6% to GBP 38.5 million. In the future, we will focus on operating profit, which in this period is up 16.3% to GBP 35.6 million. The efficiency ratio of operating profit divided by gross profit is at 43.4%, up from last year's ratio of 40.6%. This expansion is due to the slight decrease in share-based payments, as well as the capitalization of the aforementioned development projects. Our finance costs largely comprise fees associated with our revolving credit facility, which we renewed during the course of last year, and also includes finance lease interest on our right-of-use assets, including the popular staff electric vehicle scheme. The finance team has done incredibly well in managing our cash position, which has resulted in significant increase in interest earned from the money market, totaling GBP 6 million for this half. Our effective rate of tax is 26.7%, which is higher than the standard rate, and this is entirely due to changes in our deferred tax asset linked to our employee share schemes and driven by the lower share price over the per iod. As mentioned on the previous slide, the slightly heavier weighting towards the public sector now means that we have 70% of our GII coming from this sector and 30% from the corporate sector. When we look at contributions from the public and corporate sector by gross profit, we find a similar expansion in the public sector, moving from 34% - 37% contribution. When we segment our performance into the three broad categories, that of software, hardware, and services, we see sales of software product increased by 15.6%, and gross profit derived from these sales increased 11.3%. Publicly available data shows this segment is growing around 8% per annum. Therefore, we are growing ahead of market and continue to take market share. Hardware sales are down over 40%, whether measured by GII or GP, showing that we are not immune to the current market conditions. While hardware remains a focus area for us, the contribution to GII and gross profit remains relatively small. The sales of services have shown little growth over the comparative period, but this half, we are focused on building capacity and utilizing our existing internal capabilities to add value to our customers, whilst giving us access to a higher margin. Gross profits from these services has grown 8.6% to now contribute GBP 5.8 million. On this slide, I'm gonna spend a bit of time outlining why we're moving our focus to operating profit from adjusted operating profit. The graphic to the left of the slide shows the accounting adjustments made to the operating profit by each half since we've listed. As we can see from the graph, adjustments peaked at the end of FY 2024, and now we expect a normal rate of growth from this expense line. Of interest might be a little bit more detail around the number of participants in each of these share schemes. Currently, we have over 200, or 20%, of our employees participating in the LTIP scheme, as well as 530, or 47%, of our employees participating in the Sharesave scheme. These numbers show how vested our employees are on the continuing success of our company. The graphs to the right of the slide compare the performance of both operating profit and adjusted operating profit since listing. The change in focus to operating profit also changes the calculations of efficiency ratio and cash conversion. So for completeness, I've shown both graphs as well. Our cash conversion continues to follow the same cycle that we've discussed in the past. As a reminder, we tend to see lower cash conversion in the first half, followed by a very strong cash conversion in the second. This half, using operating profit as our denominator, we've had a cash conversion of 56%, and this equates to a rolling cash conversion for the last 12 months of 112%. After tax and returning GBP 35.4 million to our shareholders, we are left with a cash balance of GBP 71.5 million at the end of August. Moving on to how we think about using cash and deploying our capital. As our framework shows, our priorities are to fund future growth, invest in capital projects, integrate growth through M&A, and shareholder returns. On the latter, our dividend policy is to return 40%-50% of our post-tax adjusted operating profits to shareholders via ordinary dividends. I am pleased to announce that the board has approved an interim dividend of GBP 0.031 per share. This represents a 14.8% increase on the FY 2024 interim dividend. Sustainability remains integral to our mission as a responsible business. The first six months of the year have seen us make good progress on a number of initiatives, but I'll focus on just a few here. We have now had our near-term and net zero carbon reduction targets validated by SBTi. This gives us the confidence that we have the right strategy in place as we move towards our net zero target by 2040. Our people are the lifeblood of our business, and so we will continuously listen and act on feedback to improve the employees' working lives. For example, we've carried out a diversity reporting project in order to understand the demographics of our business. This will enable us to identify areas where more support is needed to create an environment that caters for our workforce. In addition, we've expanded our apprenticeship programs into more business areas and into a degree-level apprenticeship. I'm particularly proud of the formation of the ESG committee at board level. This is a great example of the importance we place on this topic, with the board now playing a crucial role in overseeing all ESG issues. With that, back to Sam. Thank you, Andrew. This strategy is focused on ensuring we can continue better serving our customers and people into the future. We have not deviated from our purpose and how we serve our customers, but we have evolved and remain agile to new demands and new emerging models. What is consistent is the four key pillars of our strategy remain: grow wallet share, grow customer base, expand solution capabilities, and broaden and deepen vendor partnerships. The diversification of our client base enables us to ride out changes in the economic environment that impact certain sectors. The last six months in public sector has performed well. Our customers trust us to deliver new and enabling services and look to Bytes Technology Group for support when required, as we have proximity to vendors. Our expansion into new regions and office openings brings us closer to our customers, while at the same time allowing us to recruit locally for the needs of business growth. This expansion will continue in both operations as part of our grow wallet share KPI. Our vendor relations and accreditations are based on our customer needs and our core capabilities, and we aspire to be the best of the best in our top strategic vendors. This also acts as a magnet for us, attracting both sales and technical heads, as quality talent will always want to work for the best-in-class. As we broaden and deepen our capability with technology vendors, we are determined to be at the forefront of AI experience, enabling our customers to maximize the value from technologies such as Microsoft Copilot. To- date, we have sold more than a hundred and thirty thousand Copilot seats, and our continued engagement with customers is a wonderful services relationship example. On this slide, I'd like to emphasize how we are positioned to adapt and benefit from the ongoing trends in the IT industry. Our sustained growth is supported by Microsoft's expanding market share as we build upon a partnership we've maintained for over 30 years. Our strong relationship with them and other major vendor relationships encourages us to adapt incrementally as the market evolves. As the big players in the industry continue to grow, we transform with them in parallel. This means we must be ready to move with vendors when they're prioritizing certain products or technologies, while also ensuring we are delivering to the needs and demands of our customers. Taking Microsoft as an example, the business has been clear about its efforts to focus on CSP and Azure products, and there is progress building around Copilot as organizations of all sizes embrace AI. Inevitably, evolving product sets and delivery models in the software industry drive a shift in how vendors incentivize channel partners to align their sales teams to meet these trends. We're experiencing this at the moment with industry-wide changes from a key vendor, and Bytes has a long track record of successfully adapting to changes in partner incentivization. The up-and-coming changes are consistent with the structural trend towards annually recurring licenses that are billed monthly. This has already been an area of focus for a number of years, and so we feel we are very well placed to adapt to the changes. It is important to say the overall incentive pool continues to grow, and taking into account our actions to react to the up-and-coming changes, we do not expect there to be a material impact in the current or next financial year. As the industry continues to evolve at pace, we continue to hire additional technical heads within the company to enhance the levels of service we can offer customers and ensuring we are best placed to provide the expertise that both customers and vendors require of us. Responding to the changing needs of partners and customers is deeply entrenched in how we do business, and it is a process we have been through constantly down the years, and one that we're always preparing for in the future. So in summary, we have delivered a positive set of results for the first six months of the year against a backdrop of macroeconomic and political uncertainty. Our clearly defined and well-understood strategy enables us to continue to invest in the right areas to deliver against our plan in FY 2025. Our strong partnerships with vendors, the quality of our people, and our customer focus are the USPs we will continue to protect and preserve. We remain well-positioned to benefit from structural demand drivers we see in our markets, including cloud computing, cybersecurity, and AI, and are confident in our prospects for the remainder of FY 2025 and beyond. Thank you for your time. I would now like to open up the presentation for any Q&A. Ladies and gentlemen, if you wish to ask a question, please signal by pressing star one on your telephone keypad right now. Our first question comes from Rahul Chopra from HSBC. Please go ahead. Good morning. Hello. Yes, I have two questions. I think in your comments, you mentioned that the underlying growth, GII growth, you had ten-month contribution last year from NHS contract versus 12-month contribution this year. I just want to understand, what is it like to, like, GII growth, excluding those NHS contracts, and maybe what's the exit rate? Basically, I just want to understand what the demand environment is looking like and have you seen any changes in the demand pattern in terms of, you know, decision times, the U.K. commercial sector specifically? That's my first question. The second is in terms of the vendor rebate changes. So you did highlight into some changes during the closing remarks. Just want to understand what exactly those changes are. What is the mix of CSP versus Enterprise Agreement for Bytes? Maybe perhaps if you could give us more basic sense of what is the rebate contribution to gross profit, and we just want to understand what are the key mitigation factors you're looking at in terms of those changes. Thank you. Hi, Rahul. It's Sam here. Thank you for those questions. If I've understood your first one correctly, it's the year-on-year growth within public sector that you're wanting to understand a little bit about, and the NHS contract that we announced last year, if you were to extrapolate that out, you know, what's the overall growth pattern looking like? I think our results probably speak for themselves in that we're very comfortable that the normal public sector spending was not interrupted by the snap election over the summer months. We've been delighted at the amount of business that we've been able to prosecute and to win, and that hasn't changed, you know, given the change of government, which has been consistent for us. So we haven't seen any degradation, and the year-on-year growth for public sector has, if you take out some of the big enterprise deals, looked rather positive for us. In terms of the second question, the vendor rebate changes that you mentioned, and you've specifically drawn out Microsoft on the CSP front. We're, you know, a strategic partner to Microsoft, and these changes are reviewed and discussed quite a, you know, a long time in the planning. We have twice-a-year cadence strategic meetings with Microsoft in Seattle. I've just come back from a trip myself last week. S o any rebate changes are aired with the channel with a fair amount of notice. There's nothing there that has surprised us. We've been planning, and we've been adapting and accommodating those changes within both organizations over the last year and planning accordingly. The magnitude of those we don't detail, we don't talk about the specific pots. It's quite a complicated incentive program that would take far longer than this call to try and explain. The overall sentiment of the incentive pot has grown from Microsoft is absolutely the case, and we're pleased that, as a business, we can adapt, and we can move and extract the relevant rebates through the performance of the business in the various areas that Microsoft want us to perform in. Thank you very much. Just double-checking in terms of the exit rate, then, is the exit rate for the group, is it consistent with 13%-14% growth at a GII level, on the underlying basis? Sorry, Rahul, just repeat that, please. Just wanted to understand what is the exit rate for Bytes in terms of, you know, the exit rate for the month of maybe last. Just want to understand what the exit rates are. Sorry, Rahul, it's Sam. What rate is it you're wanting clarity on? The exit monthly rate, exit monthly GII growth rate for Bytes in terms of... That is what I'm trying to understand. Yes, sir. Given, uh- Yeah, so Rahul, that's very different, because a lot of the EA contracts are annually invoiced, so we don't really have a run rate that you can measure on a month-to-month basis that we would see as consistent. So what we can say is that your GII growth that we've recorded at the first half is what we would be expecting into the second, as well as the... Yeah, sort of the all the key metrics is that, so as we kick off the H2, I think they're all ongoing, and we don't see any real change. Okay, good. Thanks so much. Thank you, Rahul. Thank you. Our next question comes from Andrew Ripper from Panmure Liberum. Please go ahead. Yeah, morning, everyone. It's Andrew Ripper from Panmure Liberum. I've got two as well, if that's okay. First one, just staying with current trading, just wondering what your expectation is, qualitatively for GP growth in the second half. Do you expect it to remain high single digit, and how much visibility do you have? W ithin that, maybe you could talk a little bit about corporate, which was obviously affected by the U.K. electoral cycle. Do you have any visibility of the prospect of improvement in corporate GP growth in the second half? Thanks. Hi, Andrew. That's the first question. I've got another one. Okay. Thanks, Andrew. Hi, it's Sam. So in terms of current trading, I don't mind sharing with you that we're pleased with, let's say, the first month and a half of the second half of this year. So I'm talking about September and October in terms of the pace of business, both in public sector and corporate. In terms of qualitative GP growth, yeah. You know, obviously, the 9% is slightly down on the double digit, but we still have ambitions, and we still feel optimistic about being able to deliver on that double digit by the end of the FY a nd the reason why we have that degree of confidence is that we do have the quality of visibility of pipeline. It's been a little bit slower to convert around the corporate private sector in recent months. We do feel that once the current government has settled down the budget and everybody knows where they stand, that will give a degree of confidence for people to get back to their normal procurement patterns. So I think that the pipeline we're currently presiding over, we're feeling very positive about. It's about then the conversion of that business in the remaining months of this FY. Thanks, Sam. Appreciate that. T hen second question I wanted to ask was just on price inflation in software. Maybe you could give us a sense, please, of how much benefit you've had from that to date this year. I think it's quite a bit less than what you had in FY 2023 and 2024. T hen, looking forward, do you expect any more inflation to come next calendar year, please? Thanks. Andrew, thanks for those questions. So if we recall, in April 2022, some of the vendors put up their pricing quite significantly, and this is on the back of investments made during the COVID environment and then recouping those investments. So those increases in April 2022 have very much played through in the first couple of years. So very little effect on those price increases in this H 1, and certainly nothing in H 2. T hen there were some smaller increases based on the fluctuation of the pound versus the dollar in April last year, and those very much played through as well. So, the sort of, call it the tailwind of inflationary increases, very much through our numbers already, and we—I would say confidently, we've had no sort of assistance in growing the top line from inflation. A s of right now, we've had no significant increases announced from any of our vendors on their prices. Now, that's not to say that it won't happen, but I would expect that the investments made into areas like AI, machine learning, large language models will be priced separately, so I don't think those would be priced. Those could be contemplated as inflationary increases. But certainly, maybe those be contemplated really on expansion or breadth, you know, of offering. Thanks very much, Andrew. Thank you, Andrew. Thank you. Our next question comes from Alex Nguyen from Jefferies. Please go ahead. Hi, Sam. Hi, Andrew. Thanks for taking my questions. I have two questions. So the first one is: Can I just come back on your commentary about the Microsoft change in commission? I appreciate all the commentary that you have provided so far, that the impact will not be material, but I think some of us on this call today would appreciate if you can help us quantify, because, like, what does it mean to be immaterial? So if you can help us with some numbers to quantify the potential negative impact, how much of your gross profit from Microsoft is from the Enterprise Agreement fees? That would be my first, and then I will have a follow-up. Hi, Alex, it's Sam here, and I'm happy for Andrew to jump in and sort of add to my response. Those are details that we don't actually talk about in the public domain. So we are, you know, accepting that there have been changes and that enterprise fees are something from a transactional world. I'm happy to talk about, if you like, the travel of direction that we, as a business, have been prepared for over the recent years, which is much more around driving consumption around the Azure platform and associated key, you know, the Microsoft key strategic areas. But what we don't do is then delve down into specific programmatic areas and apportion the incentive fees and declare that publicly. It's commercially, I suppose, sensitive information that we would not want to share. Yeah. Okay, understood. T hen my second question would be around the corporate segment trajectory. I think the 3% growth for gross profit this period is quite some deceleration from, I believe, more than 10%, last period. T hen you also mentioned that you expect the delivery of double-digit growth for the full year is based on the assumption of increased conversion. So can you just confirm to us if you have been seeing increased conversion of that pipeline you talked about in September and October? Yes. Hi, Alex. Yeah, without getting too segmental about this, the performance of the business in both operations in both public sector and corporate would indicate that the conversion is at a level that we're happy with. It's about continuing that. It's about having the long-range visibility of our pipeline to have you know done very thorough forensic assessment of that pipeline and you know both operations are very laser-focused on that detail as we track down the remaining months in this FY. So it's from that perspective, through that lens, that we feel comfortable that double digit is something we could aspire to deliver on. Okay, and then just a very small final last one. Like, I think you usually provide us with the number of the customer figure. I was wondering if you can give us an update on that for this period. We don't do that. Yeah. So, Alex, I know we have, in the past, attempted to give numbers on the H1. However, what we found in the H1 period, it's fraught with difficulties because it's not a like-for-like comparison. So in the Enterprise Agreement, we typically trade with some customers only once a year, and therefore, the fact that we haven't traded with them in the first six months doesn't mean that it's a lost customer or a customer doesn't exist. So, what we can point to here is in the RNS, we show 98% of our GP coming from existing, and therefore, 2% of our GP coming from new. So that would equate to sort of 75% of our growth on the GP numbers coming from existing customers, and 2% of our growth, 25% of our growth coming from new. Now, if you compare that to what we said at the full year, around about 2/3 came from existing and 1/3 from new. So you can imply that we are still gaining new customers and that the conversion rate and the renewal rate of our existing customers is pretty healthy. So we do put in the RNS that renewal rate is 107%, so you can infer from both those two figures that are public in the RNS that both those metrics continue to be healthy and to grow. Thank you. That's helpful. Thank you, Alex. Thank you. Our next question. Our next question comes from Julian Yates from Investec. Please go ahead. Thanks very much, and thanks both for the presentation. I've got a couple of questions. Looking at the rebate change, I just want to look at it from a different angle. Could it be a positive in some sense? You say the incentive pot has grown. Are your competitors, how will they be able to react to those sorts of changes? I understand, don't want to get into the granular details, but just from a big picture, could it be an opportunity to take share, as opposed to automatically sort of a negative? Just trying to see it from a different angle. T he sort of second question is, within commercial, clearly a bit tricky out there, are you seeing sort of pent-up demand there, sort of corporates, customers, putting things on hold in anticipation of what may be ahead o r is it just general sort of sogginess, and it's too much to read into that? L astly, just a bit in relation to that, I sense you can remove the double-digit growth outlook statement from your last paragraph outlook piece. I might have missed this, it might be in there, but is there a reason that sort of came out? Is it just to give you a bit more flexibility just to reflect the backdrop? Thank you. Hi, Julian. Thank you for those questions. So in terms of your first point, you know, is there an opportunity if we flip this into an advantage? Could we take market share? I don't want to speculate on our competitors and how they're built and how prepared they are. What I do know is that the trajectory and the strategy that we are on a journey with Microsoft is something that we've been building out in our business plans for many years. So we're, you know, building out two, three years in advance, and some of these changes have been very well understood and expected. So from that point of view, if we've adapted, if we've built strong and our competitors haven't, well, then, yes, there is potential upside for us to take market share, but I don't want to speculate on, you know, how that's actually going to land. We know what our strengths are. We know what we want to deliver in terms of solutions and how we want to respond to our customer demands. So I think all I know is our world. So, you know, w e're feeling, you know, pretty strong and resilient in that respect. In terms of the commercial pent-up demand, I would like to say, and this is again, through a Bytes Technology perspective, that yes, we've had the pipeline. We've just seen slower conversion of that. So we haven't seen it dropping off. As I mentioned earlier, you know, we're interrogating it. We have sales management crawling all over this on a regular basis a nd we are comfortable that the business opportunity is there. We just need to work more closely with our customers to understand any blockers or slowness in procurement, wanting to release the budgets or the POs. S o we don't see... You know, it is a pent-up demand. I guess answer from our pipeline response. In terms of t he double-digit outlook and removing it, I don't know if we have a specific answer on that, actually. I think that's more sort of cautionary. You know, if we look at the 9% delivered in the first half, I think you did right to just allowing us a little bit of wiggle room, and we'd hate to disappoint. Okay. It didn't seem that material in the sense that it's not there. So I just wanted to check. It wasn't a material thing. It was just a- No, you know, so- Just a reflection. Yeah, it's just a reflection on... It's not a nervousness. Yeah. It's just a reflection on w e delivered 9%, you know, so yeah. Okay. It's probably, as I say, a little bit more cautionary than anything else. That's clear, and that's helpful. Thank you. Thanks. Thanks, Julian. Thanks. Thank you. Our next question comes from Harry Read, from Redburn Atlantic. Please go ahead. Hi, good morning. Thanks for taking the questions. Just have two. I'm just interested to see what the implications for you would be if Microsoft kind of rebases the strategy on 365 to go from more seat-based growth to ARPU-based growth. Do the take rates of what you're receiving from them change? How do the economics work there? T hen the second question is that when you're talking to customers, obviously, being a Microsoft-focused VAR, the largest Microsoft vendor, sorry, VAR in the U.K., are customers increasingly wanting kind of a more encompassing offering with, you know, a mix of hardware, software, as an IT stack gets more complex? or do you continue to be, you know, the go-to shop for the Microsoft procurement? Thank you. Thanks, Harry, so I guess you're asking, you know, for a little bit more detail and you know, getting down into seats and the economics. It's such a complicated matrix that, you know, again, I'm gonna give a generic response. We just wouldn't detail that in a call in this way, but you know, if I come back up to our overall sentiment, it's that we are pursuing the strategy. We are following where the money is. We're built as a business to track the incentive pots. We've been specialized, accredited, designations, and, you know, our sellers have been well-trained on how to behave and how to actually draw down these incentive fees. So I'm comfortable that, you know, as an overall sales motion, we are aligned hugely to Microsoft and how they would like partners such as Bytes Technology Group to perform. In terms of your second question. question. T hank you for calling us Microsoft's largest U.K. partner. If you combine both, you know, our two operations revenues, that's actually correct. I don't think, you know, we assume that customers just want a single vendor badge, and that's the really joyful part of how we can go to market and work with our customers and understand the solution stack they want. If they have consolidated, if they all want, you know, to put everything under one roof, of course, Microsoft has a huge abundance of technology options that we can discuss with them. But we're equally equipped to introduce other vendors that complement Microsoft. They have a very supportive strategy working alongside other ISVs. Again, our business is built in a way that we understand how different technologies complement one another and certainly, you know, what fits well in the Microsoft ecosystem. So our sellers, our overlay staff, our specialists, are well-versed in how we can deal with customers. But back to your point, if they want a go-to shop, and they want a singular brand or a badge, if you like, from one vendor, then we have the ability to advise customers accordingly, look at the right commercial pricing for that, and sometimes the answer might be Microsoft, but, you know, quite often the answer will be a combination of different vendors. That's where I think our broad portfolio that I talked about in my presentation is hugely important to us, that we do represent the best-in-class around all of the vendor technology areas. O f course, there are, you know, technology areas that Microsoft do not cover. And, you know, that's further opportunity for us as a group to represent those vendors. Brilliant. Thank you very much. Thank you. We're gonna move to our next question from Christopher Tong from UBS. Please go ahead. Morning, everyone. Maybe just two questions from me. I mean, I guess back to sort of the incentives. Could you give us a sense of how much incentive is as a portion of sort of gross profits? I have a second one. Yeah, it's a strange question as to how we formulate the answer to that, because it depends on how we bill. So, if we're billing directly from an EA point of view, you could count that as margin and not incentive. If Microsoft is billing the Enterprise Agreement, then you could classify the margin that we get back as a rebate. So all in all, we don't actually publish the total all-up rebate number from any of our vendors, so we can't, as a percentage, really call that out. Again, it would be sensitive information that we, you know, we just don't want to share, Christopher. I'm sorry. Yeah. No, it makes sense, and I guess my second question is more on sort of the headcount growth, so you mentioned that you're opening sort of a new office in Portsmouth, and then also sort of expanding the London office. Could you give us a sense of how much you expect sort of headcount to grow in sort of the second half and maybe next year? Yeah, sure. So you know, these are intentional regional offices that we've opened. There's been, if you like, a building amount of presence in the south. So Port Solent, we already had people that were located there, either traveling into Leatherhead, our head office, but were serving customers out in that region. So you know, it doesn't take long before it becomes obvious that if you've got a nucleus of people that would all like to work together, that you could open up an office and make the commute a little bit easier, and you know, just replicate that Bytes culture into the region. So that's what we've done at Portsmouth. It's headed up by one of our very experienced sales managers, and again, that's part of the strategy. You know, you have the right leader that wants to develop an office environment, and that's what happened in London. You know, one of the top performers decided to move out of his sales career, wanted to undertake management as his next stage of growth, and has been building out a team in London successfully. A s that team's grown, we expand the office footprint. S o the current headcount increase that we've declared for the first half of this year is in line with the budget growth expectations, and we would continue to do that into H2 as well. You could expect more of the same, Christopher. Right. Thank you. Thank you. We'll now move to our next question from Vinay Bhardwaj from Cantor Fitzgerald. Please go ahead. Morning, guys. I just want to come back to the Microsoft commission changes. So, my understanding is that Microsoft are going to prioritize incentives for areas that are more of a strategic priority for them, like Azure, security, and Copilots, et cetera. So I just want to get a sense of how aligned the GII within your Microsoft product portfolio is with these areas. T hen secondly, can you just walk me through your rationale to develop your own marketplace, and is that in response to some of the changes that you're seeing from your vendor partners? Sure. Thanks. Hi there. Yeah, so you're right. You know, Microsoft, their strategy has always been to align the incentive programs around their strategic growth areas. So no surprise, it's the areas you've called out: security, Azure, AI, and so on, a nd those are areas that we've been building strong and prosecuting for a number of years. So we're very aligned, you know, and that's part of our mission, and it's you know, part of the response to our customers' interest as well. Marketplace is something that we have been involved in for quite a while now, so it isn't an immediate response to the most recent changes around incentives. It's a platform strategy that we've been embarking on for a number of years. We have team capability, operational capability, very good understanding of the multi-vendor opportunity that we can serve across Marketplace. What we are doing is taking an opportunity to invest further into that because we believe that it will have certainly strategic importance to our customers in the future, so it's about expanding that platform and creating more sophisticated user interfaces for our customers to give them the best experience possible. Okay. Thanks very much for that. Thank you. Thank you. If there are no further questions in the phone queue, then please, I'd like to hand the call over to Jack Sawyer with customer questions. Over to you, Jack. So the first set of questions are from Tintin Stormont at Deutsche Numis. She asks: "Are you able to give more color on the prospects for public sector going forward? Do you feel there was any pull-forward impact from the election? Is activity in the public sector still healthy post-election? Yeah. Hi, Tintin. Good questions. No, the answer is we do not feel there was pull forward, so we haven't emptied the basket, shall we say? T hat would speak to the pipeline that I've mentioned already, that you know, we're still seeing a very healthy pipeline in public sector. We don't see that changing as we go forward. Yeah, I think... Sorry, does that answer the question? Tintin also asks: "How much do you think services will grow over time, given the hires you are making? So this is a growth area, as we obviously have shared in our RNS and in the presentation, and it's organically part of our strategy to keep developing that to building out our capability. That plays to the high levels of accreditations we want to retain or achieve with our vendors. When we are bidding in public sector or when we're dealing with customers in the private sector, having that highest level of capability specialism is important to us to serve the customers. It's beyond just having the transaction conversation. It's about the pre-sales advice, it's about the post implementation support, and future upgrades or wider technology cross-sell opportunities that we want to take a customer on that journey. The answer is that investing in technical heads will continue proportionally in line with our strategy, and we see it as an evolving opportunity for the group. The next few questions are from Patrick O'Donnell of Goodbody. His first question is on the economic impact of Microsoft incentives, but I think we've covered that now. So I'll move on to his second question, which is also on demand. He asks: "Where do you see the highest potential for growth over the next 12 months? Are there any larger public contracts in the pipeline, or is it a mix of smaller ones? Could you describe the corporate pipeline and the public pipeline? Which one is stronger in your view, and which one is currently harder to execute against? Yeah. Thank you, Patrick. I think the pipeline that we currently have visibility of is equal in terms of the potential for both public sector and corporate. Of course, with public sector, there's a degree of that that goes through formal procurement routes, in some cases, aggregations under Crown Commercial, and our operations are well versed in dealing with that, and we have visibility of what's coming down the frameworks because we have berths on them. So I think we're appointed onto all the right frameworks to see what's out there. T hen equally on the larger contract opportunity, we don't see that changing. If I just pick up on one of the points that Andrew made earlier, you know, these are cycles of contracts, especially when you're talking about large enterprise organizations. These come up 3-4 years. We have very good visibility of when they're likely to renew. So it's not really negotiable whether they do or don't. They, at some point, the anniversary has to come to an end, and they do need to renew. So you will see cycles of those large public sector contracts still prevailing. There is, under the public sector side, the DTA, the technology agreement between Microsoft and public sector being renegotiated. We anticipate that being announced in the November-December timeframe. So that will set new parameters and commercial terms of public sector and what they can buy through the Microsoft negotiation. That is not something we participate in. Once that's defined, that's then the pricing structures that are available for partners like Bytes Technology Group to potentially bid on in the future. So that's the public sector side. We do see, as I've mentioned earlier, in equal measure, the corporate pipeline being just as interesting a nd if you want to talk about SMB up to mid-market up to enterprise, you know, our primary focus is around mid-market, and that's where we're seeing the bulk of our pipeline being executed. So I hope that helps, Patrick. Great, and the final question from Patrick is on gross margins. He asks: Now that you're into year two of some of the larger public sector wins, have you already got evidence of some upselling into these contracts, which were won in a very competitive process, like the HMRC one? Okay. Patrick, I'm pleased to say that, yes, we have in this financial year, with some of our very significant larger contracts, seen exactly that. We wouldn't detail the specific gross margin, but, if I were to say that we have certainly pleased ourself with being slightly ahead of the curve in terms of where we thought we would be with some of those contracts. That speaks to the fact that, you know, once you've landed one of these contracts, if you're working strategically with the customer and you have the capability in certain areas that reflect where they want more support, it could be very directly related to that technology area, or it could be that you have unearthed opportunities with other adjacent technology areas. But either way, you know, with those larger enterprise contracts, we're pleased with the results, and our teams are very much aligned to delivering the GP from them. Not forgetting that our sales teams are only remunerated on GP. So it's in their interest to ensure that over the longevity of a contract, whether it's three, four, or five years, that they extract the right level of value from that in, you know, that invested relationship. The next question comes from Oliver Tipping at Peel Hunt. He has a question about the software project being developed internally. He asks: Post-completion, what is the amortization schedule likely to look like? So, Oliver, thanks for that. So, as we've announced, we capitalized around about GBP 1.6 million, of which GBP 700,000 was from existing resources. So our project is due to run for three halves, so we expect the total capitalized, you know, sort of approaching the GBP 5 million. T hen our current view on the lifespan of the developed environment would be five years, so you would expect depreciation to start running in H2 of FY 2026, and that would be, sort of, GBP 1 million a year. So the impact for next year, next financial year, would be GBP 500,000 for the half. We now have a few questions from Damindu Jayaweera at Peel Hunt. I'll ask them one by one. The first one is: In your IPO filing, you disclosed that Microsoft was 78% of GII, and GII to GP conversion for Microsoft was 9%, with 50% of that coming from rebates. In FY 2024, the implied conversion seems to be more like 6% instead of 9% four years prior. Is this related to less rebates or growth from your public sector Microsoft business? Yeah. So, Damindu, you're exactly right. The last time we published rebate numbers was in the pre-IPO numbers, a nd I've looked through all the RNSs since then. We haven't disclosed it. So very much, we will reiterate. The total incentive pot from Microsoft grows year- on- year, and they change the incentives to change behavior of their partners. So we're pretty good at following the, you know, sort of the guidelines put down by Microsoft and following the money, as it were. I think the complexity in our numbers is taking the GII from the public sector, and if you look back over the past four years, particularly with the big contracts like NHS and HMRC announced last year, it is a you know sort of a growth rate on the public sector, which would dilute or seem to dilute that ratio that you're talking about. So I would put most of the environment down to the public sector change, and then you know, a nd maybe you know the older products or let's say the on-prem products and the older Microsoft E1s E3s do not get the same sort of rebates they used to, but that's also part of the journey. You know Microsoft's incentivizing behaviour. So I think that's as much as we can disclose. Damindu's second question is about the public sector strategy. He says: I was always of the view that winning public sector deals, like the large NHS deal, with very little GP contribution, was part of a long game to sell more to those very institutions. For example, cybersecurity. Does this view change on the back of any recent changes to Microsoft reseller programs? No, it's absolutely our intent to win business and, you know, consult with the customer over their requirements, and if that's an opportunity to sell more of the same vendor or additional vendors, then we will be led by the customer. His third question is also about incentives. He asks: There is a lot of chatter about these Microsoft changes. Are these as big as the 2022 NCE changes, which ended up not diluting the growth rates for the largest of the Microsoft resellers? I don't think we would compare to that. That's a different programmatic change, and this is the current and latest one. I think, again, just to reiterate, we, as a business, take a full advantage of our strategic relationship with our top-tier vendors. We internalize any advanced warnings we have. You know, we get prepared, we build, and we're agile as a business to accommodate that. So, as was the case with the NCE changes, and there have been many other vendors that have changed programmatically over the years, we're now just dealing with the current Microsoft ones. This penultimate question is: I noted Azure Expert MSP status is given to Phoenix and not to Bytes Software. Is the latter suffering from not having that when it goes against, for example, Softcat, which has it, or can Phoenix be fronted where Azure Expert MSP is needed? No, the two operations run very separately, and that's, that's correct, but Bytes are in the process of accrediting as an Azure expert. It hasn't, to- date, meant that they have been uncompetitive, but for sure, it's part of our longer-term commitment and evolving services strategy that we're organically building out within both operations. A slightly simpler one to finish on from Damindu. He asks: What did Sam learn on her recent visit to Microsoft HQ? We saw her LinkedIn post. What did I learn? Look, we've got a 30-year relationship here with Microsoft, and I think what it did, it just underscored, you know, how tremendously close we are as businesses. I wasn't the only partner from the U.K. in attendance. Some of their other scale partners were there. But it was great to connect with other globals, to compare notes around what's happening in the world and some of the IT market shifts and changes. So actually, the networking aspect, just to answer the question, was hugely valuable for me to be alongside other CEOs and strategy people, but at the same time, to you know, informally chat to the Microsoft people that, you know, we've known for many years. So I took, you know, a huge amount of enjoyment from speaking face-to-face with people that, more often than not, you're having to deal with over Teams or on email a nd you know, Microsoft are very good at that. They facilitate, post-COVID, now the opportunities to meet up with their execs. So, you know, we were talking to some pretty senior people. It's not the only opportunity we have, but more often than not, they're flying into the U.K., and, you know, we get invited to a lot of these sessions. But to go to the Microsoft campus, to be alongside them, and to actually have the social opportunity, and as I say, to meet up with my peers, was very beneficial. The next question comes from Martin O'Sullivan at Shore Capital. He says: You mentioned cybersecurity as a key area of growth for Bytes. What specific product offerings or partnerships have been most effective in driving this growth to- date, and how do you see your cyber offering evolving in the next fiscal year? Okay. No, great, great questions, Martin. Thank you. So cybersecurity, as I've referred to, is, you know, really embedded into the business. Both operations have got capability. We've built out a SOC. We have managed services. But if we sort of go back in time, the Bytes Security Partnerships, which was an acquisition, one of the first BSS M&A acquisitions, really brought that security into the business and was hugely built around Check Point. So at the moment, you know, that's still a very significant vendor for us. Microsoft have clearly risen up through the ranks and are recognized by customers, small, medium, and large. Gartner acknowledge, you know, the top-class security vendors in the different spaces. Security is such a broad topic now. We really do enjoy working with a whole portfolio of vendors, and up-and-coming ones, you know, in the last year or two, we've brought onto the books and have very niche offerings. So, you know, I'll call out a few names: CyberArk, Saviynt, and Verkada are new names into portfolio. T hen, of course, you've got the established brands that I've referred to in the presentation, Sophos and Trend, and so on. So yeah, I think I don't want to call out any one particular partner here. They're all super interesting for us. They all have their place in the eyes of our customers, depending on their particular price points, the complexity of what they offer, or the grade of security. You know, some customers can afford the top grade, and some customers, you know, are budget-challenged, and then you want to front up a vendor that they have the capacity to afford. So I hope that answers your question, Martin. Great. T he final question on the web chat comes from Vuyani Kapiso at Prescient in South Africa. He asks: Could you give us some color on Copilot and demand for licenses from customers? How many customers who trial Copilot go on to subscribe for licenses? How many licenses do they sign up for on average, and how different is customer interest in Copilot from public and corporate customers? Okay. Quite a few questions there, but if I just talk you through what we've seen in the last year. There isn't any one particular industry or public sector, private sector that is showing more or less interest. I think it's universal. All of our customer base has pretty much had curiosity. We've had great engagement from customers on the webinars that we've put out over the last year. We've engaged in huge numbers of workshops, technically, to equip customers to understand the technology more, and so on. So we're really pleased with the levels of interest. In terms of the uptake, there's been across all our customer segments, for sure, the trials, conversions into licenses, not always, you know, wall-to-wall coverage, but that's okay. We're on a journey with our customers, and we're really pleased that we've got a conversation that's services-led, that allows us to talk to them about all of the other periphery areas, about adoption, change management, the data preparedness, that they need to think about before they go wholesale into taking Copilot across an organization. How they think about security, how they think about evolving that whole AI strategy. So we're part of that conversation, and we see this as a long-term narrative, and journey that we want to go on with our customers. There are no further questions from the web chat, so I'll hand it back to Sam for any closing remarks. Thank you, Jack. Okay, so I'd just like to say thank you for joining today's call. As you've heard, we've delivered a positive set of results for the last six months of the year, and our strategy enables us to continue to invest in the right areas to deliver against our plan in FY 2025. We remain well-positioned to benefit from the structural demand trade drivers that we see in our markets, and we're confident in our prospects for the remainder of this FY 2025 and beyond. So thanks again for joining, and we look forward to speaking again at our next set of results.