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Sage profit rises 16% after improved second-half performance

By BFN News | 07:18 AM | Wednesday 21 November, 2018


Software company Sage Group booked a 16% rise in annual profit after it improved its second-half performance by focusing on 'higher-quality' subscription and recurring revenue. Pre-tax profit for the year through September rose to £398m, as revenue rose 7.6% to £1.85bn. The company declared an annual dividend of 16.50p per share, up 7.0% on-year. Sage's organic operating margin eased back to 27.8%, down from 28.0%. 'Sage has shown stronger performance in the second half of the financial year,'chief executive Steve Hare said. 'The renewed focus on high-quality subscription and recurring revenue has generated momentum as we exited the year.' Turning to its outlook, Sage said it expected to post recurring revenue growth in the current financial year of 8-9%. 'As the business accelerates the pace of transition towards subscription, the organic revenue growth rate may decrease in the short-term,' it added. Organic operating margins were expected be broadly stable before the impact of around £60m of specifically-targeted investment to accelerate the transition to a software-as-a-service business. Including that impact, organic operating margin would be in the range of 23%-25%. 'Over time, this model will drive a sustainable acceleration in recurring revenue growth whilst enabling strong returns on investment,' Sage said. Story provided by StockMarketWire.com

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