Sage group remains on target after solid trading

The Sage Group Plc, remains on course to deliver its target of 6% organic revenue growth by 2015, following healthy trading all-round during the past three months

Sage HQ at Newcastle Great Park
Sage HQ at Newcastle Great Park

Newcastle software company, The Sage Group Plc, remains on course to deliver its target of 6% organic revenue growth by 2015, following healthy trading all-round during the past three months.

In an interim management statement covering the period from October 1, 2013, to the present date, the firm said trading across all regions remained in line with expectations.

Europe, the UK & Ireland delivered a “good performance”, with legislative change remaining one of the main drivers of growth.

In mainland Europe, the improvements Sage saw in the second half of 2013 was maintained in the first quarter of this year, representing what the group called a “resilient performance” given challenging market conditions in France and Spain.

Sage is a market leader in software for accountancy, payroll, HR and more, its services being used throughout the world.

Last month, full results for the year ended September 30, 2013, showed the group’s underlying revenue had jumped 4% to around £1.26bn, while profits rose 1% to £360.5m.

The company’s dividend likewise increased by 6% to 11.32p per share, while operating cash flow stood at £417.4m, compared to £383.3m in 2012.

At the time, Sage said the results were influenced by ongoing commitment to its SME offering, including significant developments in cloud services

Chief executive Guy Berruyer said: “Expanding our cloud product portfolio for small to medium sized businesses is also an important part of our strategy.

“As with Sage One, we have developed a robust technology platform called Sage ERP Online, which allows us to bring our leading ERP solutions to the cloud quickly.”

The latest update showed business in America had also remained solid while Sage AAMEA - the company’s business division that includes Africa, Australia, Middle East and Asia - delivered “another good performance”

The group’s cash regeneration was likewise “strong”, with net debt at December 31, 2013, sitting at £381.8m, compared to £384.3m at September 30.

Several key appointments had also been made, with Drummond Hall joining the board as a non-executive director on January 1 and Steve Hare as chief financial officer two days later.

Berruyer said: “Our performance in the first quarter is in-line with our expectations, with good growth maintained across all regions.

“Through continued focus on our strategic cornerstones, we remain on course to deliver on our 6% organic revenue growth target in 2015, and anticipate making further progress during the year ahead.”

Since the year-end, a further 5.7m Sage Group shares have been repurchased for a consideration of £19.1m.

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