Sage to hit targets after strong year all-round

Leading software company, Sage Group plc, is on track to hit its target of 6% organic growth by 2015, following strong financial results across the board for this year

Guy Berruyer, Chief Exec of Sage Group
Guy Berruyer Chief Exec of Sage Group

Leading software company, Sage Group plc, is on track to hit its target of 6% organic growth by 2015, following strong financial results across the board for this year.

Ongoing commitment to its offering for SMEs, including significant developments in its cloud services, saw underlying revenue jump 4% to around £1.26bn in the year ended September 30, 2013.

During the period, the Newcastle-headquartered group also boosted profits by 1% to £360.5m, increased its dividend by 6% to 11.32p per share and reported a strong operating cash flow of £417.4m, compared to £383.3m in 2012.

Chief executive Guy Berruyer said: “I am pleased to report a strong set of results, with good growth across all regions and our strategic initiatives progressing well.

“These results highlight the strong appeal of our offering to SMEs, great execution in delivering on our plans and the benefit of a clear strategy, which focuses on our most significant growth opportunities.

“The strategy is working and growth is accelerating.

“We remain confident of achieving our target of 6% organic revenue growth in 2015, and anticipate further progress during the year ahead.”

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

Disposing of non-core products earlier this year has allowed it to streamline its portfolio, with a particular emphasis on providing SME customers with new technologies.

At September 30, the group had 22,400 paying customers for its Sage One products, aimed at smaller businesses. Take-up in the UK and Ireland has been strong, and the products are now available in eight markets across Europe and North America, as well as in Canada.

Berruyer added: “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. For the customer, Sage ERP Online offers the benefits of outsourced infrastructure, mobility, more flexible pricing models and a measured transitions to the cloud, alongside market-leading support.”

Sage ERP X3, the company’s global solution for the mid-market, meanwhile, delivered organic revenue growth of 12%, compared to 5% in 2012.

“The product is performing very well international, growing organically by 34% outside of its home market of France,” Berruyer added.

Sage is also focusing on what it calls the “migration of customers to a subscription pricing relationship”.

Although software subscription represents a relatively small proportion of its revenue, it is seen as important strategically in delivering growth over the longer term.

Berruyer said: “We are encouraged by the early progress we are making, which is evidence by the 27% increase in the annualised value of subscriber base on an organic basis, which grew to £108m, compared to £85m in 2012.”

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