Proactiveinvestors United Kingdom Sage Group https://www.proactiveinvestors.co.uk Proactiveinvestors United Kingdom Sage Group RSS feed en Mon, 17 Jun 2019 08:37:09 +0100 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) <![CDATA[News - Sage Group shares dip as Deutsche Bank downgrades rating to 'sell' ]]> https://www.proactiveinvestors.co.uk/companies/news/221723/sage-group-shares-dip-as-deutsche-bank-downgrades-rating-to--sell--221723.html The Sage Group PLC (LON:SAGE) shares were under pressure on Friday after Deutsche Bank downgraded its rating on the stock to ‘sell’ from ‘hold’ and raised its price target to 650p from 505p.

Deutsche Bank said the UK software firm has made good progress in shifting its focus to subscription services by moving more products to the cloud.

READ: Sage leaves revenue guidance unchanged as SaaS growth offsets decline in legacy business

“However, we foresee recurring revenue growth slowing from here as some of the initial boost factors from a subscription transition fades,” the German investment bank said.

“We believe that Sage is now entering a new phase, where the quick wins from low-hanging fruit are fading, and the company now needs to focus on organic product development to sustain growth in the future.”

“In our view, this will unavoidably result in a sustained rise in Sage’s historically low level of research and development investment and operating margin pressure.”

As a result, Deutsche Bank thinks Sage’s earnings per share and free cash flow are unlikely to exceed low to mid-single digit growth over the medium term, well below the software peer group average.

The bank said investors are unlikely to assume there will be a payback that sufficiently compensates for this “relatively meagre outlook” given Sage’s historically “somewhat indifferent” execution around product development.

It believes the low growth outlook and execution risk around cloud are not being sufficiently discounted.

In mid-morning trading, shares in Sage were down 1.2% to 746p.

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Fri, 07 Jun 2019 10:22:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/221723/sage-group-shares-dip-as-deutsche-bank-downgrades-rating-to--sell--221723.html
<![CDATA[RNS press release - Block listing Interim Review ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190606150639_14101920/ Thu, 06 Jun 2019 15:06:39 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190606150639_14101920/ <![CDATA[RNS press release - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190531165509_14094805/ Fri, 31 May 2019 16:55:09 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190531165509_14094805/ <![CDATA[RNS press release - Director Declaration ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190531095358_14094022/ Fri, 31 May 2019 09:53:58 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190531095358_14094022/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190530162058_14092981/ Thu, 30 May 2019 16:20:58 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190530162058_14092981/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190530134547_14092762/ Thu, 30 May 2019 13:45:47 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190530134547_14092762/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190520162450_14080672/ Mon, 20 May 2019 16:24:50 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190520162450_14080672/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190520162238_14080669/ Mon, 20 May 2019 16:22:38 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190520162238_14080669/ <![CDATA[News - Sage leaves revenue guidance unchanged as SaaS growth offsets decline in legacy business ]]> https://www.proactiveinvestors.co.uk/companies/news/220486/sage-leaves-revenue-guidance-unchanged-as-saas-growth-offsets-decline-in-legacy-business-220486.html Accounting software giant Sage Group PLC (LON:SGE) expects full-year organic revenue growth to be at the top-end or even ro exceed its guidance range.

The company had previously indicated it expected organic revenue growth to be around 8-9% in the current financial year.

READ Sage reiterates guidance after strong start to fiscal year

On the down side, it expects software and software related services (SSRS) and processing revenue to be at the lower end or below the guided range of flat to mid-single digit percentage decline.

Overall, expectations for full-year total revenue remain unchanged and the group has maintained its organic operating profit margin guidance of 23-25%.

As expected, the second quarter of its fiscal year, which runs to the end of September, saw a slowdown in its organic revenue growth from the first quarter.

Organic total revenue growth in the six months to the end of March was up 6.2% to £941mln from £886mln the year before but this was less than the 7.6% growth rate seen in the first quarter. Organic recurring revenue rose 10.2% to £779mln from £707mln the year before, representing a slight deterioration from the first quarter growth rate of 10.5%.

Plain old vanilla revenue - i.e. the top-line number the company is required to report under statutory requirements - was £957mln, up 6.4% from £899mln the year before. Annualised recurring revenue in the period rose 10.2% to £1.55bn, up from £1.40bn the year before.

The organic operating profit margin in the first half eased by 1.9 percentage points to 22.7%, down from 24.6% the year before. Profit before tax rose to £198mln from £171mln in the corresponding period a year earlier.

The interim dividend has been nudged up 2.5% to 5.79p from 5.65p the previous year.

"We are encouraged by the strong start to FY19. Sage's vision is to become a great SaaS company and by focusing on customers, colleagues and innovation we are starting to see evidence of successful strategic execution. This is reflected in the strong performance in high quality recurring revenue, underpinned by subscription in the first half of the year. We will continue to focus on driving high-quality recurring and subscription revenue in the second half of the year," said Steve Hare, the FTSE 2100-listed firm's chief executive officer.

In early trading, shares in Sage Group were 4.4% lower at 705.20p.

 -- Adds share price --

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Fri, 17 May 2019 07:44:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/220486/sage-leaves-revenue-guidance-unchanged-as-saas-growth-offsets-decline-in-legacy-business-220486.html
<![CDATA[RNS press release - Non-Executive Director Appointment ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190517070005_14077700/ Fri, 17 May 2019 07:00:05 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190517070005_14077700/ <![CDATA[RNS press release - Half-year Report ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190517070002_14077651/ Fri, 17 May 2019 07:00:02 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190517070002_14077651/ <![CDATA[RNS press release - Director Declaration ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190501130256_14059617/ Wed, 01 May 2019 13:02:56 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190501130256_14059617/ <![CDATA[RNS press release - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190430152645_14057842/ Tue, 30 Apr 2019 15:26:45 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190430152645_14057842/ <![CDATA[News - Barclays warns of ‘likely’ second-half slowdown for Sage ]]> https://www.proactiveinvestors.co.uk/companies/news/218498/barclays-warns-of-likely-second-half-slowdown-for-sage-218498.html Analysts at Barclays have warned that a second-half slowdown for Sage Group PLC (LON:SGE) “seems likely”.

Sage, which makes accounting software for businesses, has seen its share price climb by almost a fifth this year after topping expectations with its first-quarter growth.

READ: Sage reiterates guidance after strong start to the year

But Barclays’ number crunchers have warned that the first half benefits from easier comparatives, while things are expected to get a little tougher in the second half of the year.

“We think Q1 should not be viewed as an especially material data point in assessing the growth rate of the business over the coming couple of years,” read a note to clients.

“It is likely that the [cloud] transition will gather speed over the course of the year – a good thing – but that this will result in revenue growth moderating. This could be further exacerbated by tougher comps in the second half of the year.”

The analysts added: “We think an H2 slowdown is likely and that this could disappoint the market.

“We therefore remain ‘underweight’, albeit on an increased price target of 550p (from 495p), now based on 17x CY20E EPS (from 15x) to reflect increased market multiples.”

Sage shares were 0.1% higher at 702.8p on Friday morning – comfortably ahead of Barclays’ target.

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Fri, 12 Apr 2019 11:10:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/218498/barclays-warns-of-likely-second-half-slowdown-for-sage-218498.html
<![CDATA[RNS press release - Director Declaration ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190402163517_14026100/ Tue, 02 Apr 2019 16:35:17 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190402163517_14026100/ <![CDATA[RNS press release - Update on financial reporting and disclosure ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190402083004_14025093/ Tue, 02 Apr 2019 08:30:04 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190402083004_14025093/ <![CDATA[RNS press release - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190329180641_14022269/ Fri, 29 Mar 2019 18:06:41 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190329180641_14022269/ <![CDATA[RNS press release - Non-Executive Directors Changes ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190325155616_14014831/ Mon, 25 Mar 2019 15:56:16 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190325155616_14014831/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190322161414_14013045/ Fri, 22 Mar 2019 16:14:14 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190322161414_14013045/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190314171100_14003030/ Thu, 14 Mar 2019 17:11:00 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190314171100_14003030/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190305144633_13991068/ Tue, 05 Mar 2019 14:46:33 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190305144633_13991068/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190228172846_13986132/ Thu, 28 Feb 2019 17:28:46 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190228172846_13986132/ <![CDATA[RNS press release - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190228162828_13985999/ Thu, 28 Feb 2019 16:28:28 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190228162828_13985999/ <![CDATA[RNS press release - Result of AGM ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190227155153_13984138/ Wed, 27 Feb 2019 15:51:53 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190227155153_13984138/ <![CDATA[RNS press release - Disposal of US Payroll Outsourcing Business ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190222070005_13978027/ Fri, 22 Feb 2019 07:00:05 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190222070005_13978027/ <![CDATA[RNS press release - Proposed changes to Directors' remuneration policy ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190214124825_13969870/ Thu, 14 Feb 2019 12:48:25 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190214124825_13969870/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190207172132_13962418/ Thu, 07 Feb 2019 17:21:32 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190207172132_13962418/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190205170315_13959335/ Tue, 05 Feb 2019 17:03:15 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190205170315_13959335/ <![CDATA[RNS press release - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190201133533_13955763/ Fri, 01 Feb 2019 13:35:33 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190201133533_13955763/ <![CDATA[RNS press release - Notice of AGM ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190122142043_13943026/ Tue, 22 Jan 2019 14:20:43 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190122142043_13943026/ <![CDATA[News - Sage reiterates guidance after strong start to fiscal year ]]> https://www.proactiveinvestors.co.uk/companies/news/212769/sage-reiterates-guidance-after-strong-start-to-fiscal-year-212769.html The first quarter of accountancy software provider Sage Group PLC’s (LON:SGE) fiscal year saw an acceleration in organic revenue growth.

The group’s organic revenue in the final three months of 2018 increase by 7.6% to £465mln from a year earlier; in the final half of the preceding fiscal year, the organic growth rate was 7.0%.

READ: Sage agrees disposal of its US-based payroll outsourcing business to iSolved HCM

The bulk of the growth came from customers that have migrated to Sage Business Cloud, where revenue rose 9.3% to £380mln. The old-school software licensing-per-seat business saw revenue edged up 0.6% to £85mln.

North America delivered year-on-year revenue growth of 10.4% to £154mln while the UK & Ireland notched up revenue growth of 5.9% to £96mln, marginally topping the 5.8% growth in revenue (to £69mln) seen in France.

Recurring revenue increased by 10.5% to £387mln, underpinned by software subscription growth of 27.7% to £237mln, Sage said.

Software and software-related services revenue declined by 5.8% to £65mln reflecting the managed decline in licences as the business makes the transition to a subscription-based model.

"We have been encouraged by the strong start to FY19, reflecting the renewed focus on high-quality subscription and recurring revenue as we continue the journey to becoming a great SaaS business. Looking ahead we reiterate our full year guidance for FY19 as outlined at the FY18 results announcement,” said Steve Hare, the chief executive officer of Sage.

Shares in Sage were up 6.4% in early deals.
 

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Thu, 17 Jan 2019 09:08:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/212769/sage-reiterates-guidance-after-strong-start-to-fiscal-year-212769.html
<![CDATA[RNS press release - Trading Update ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190117070004_13937336/ Thu, 17 Jan 2019 07:00:04 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190117070004_13937336/ <![CDATA[News - Sage agrees around £78mln disposal of its US-based payroll outsourcing business to iSolved HCM ]]> https://www.proactiveinvestors.co.uk/companies/news/212619/sage-agrees-around-78mln-disposal-of-its-us-based-payroll-outsourcing-business-to-isolved-hcm-212619.html Sage Group PLC (LON:SGE) has agreed to sell its US-based payroll outsourcing business Sage Payroll Solutions to iSolved HCM, LLC for around £78mln.

The FTSE 100-listed accounting software firm said the disposal is part of its strategy, as set out in its November 2018 results, to focus on sUBScription software solutions that are in or have a pathway to the Sage Business Cloud.

READ: Sage under pressure as UBS chops its price target once again

iSolved is a portfolio company of Accel-KKR and a provider of human capital management solutions.

Sage said the sale will see £73mln payable in cash on completion, subject to a customary debt and working capital adjustment, while the remaining £5mln represents contingent consideration.

The group added that it expects to report a statutory profit on disposal of approximately £23mln on completion, with the disposal proceeds to be invested for growth and used to reduce net debt.

For the year ended 30 September 2018, Sage Payroll Solutions had revenue of £38mln and operating loss of £1mln.

The firm said, subject to certain conditions, completion of the disposal is expected to occur within the next three months.

Shares higher; Q1 update awaited

In afternoon trading, shares in Sage were 1.6% higher at 601.20p.

Sage is due to provide a first-quarter update on Thursday, 17 January, which will give the firm a chance to introduce its new CFO, Jonathan Howell, to investors.

In a preview, UBS said it reckons Sages faces “relatively easy comparatives” from last year.

“Recurring revenues exited 2018 with 7.2% growth in Q4 and was 7.0% in Q1 last year, so the comparative is not too hard, although [software-related services] was decent at +4% in Q1 last year,” the Swiss bank’s analysts said.

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Tue, 15 Jan 2019 14:52:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/212619/sage-agrees-around-78mln-disposal-of-its-us-based-payroll-outsourcing-business-to-isolved-hcm-212619.html
<![CDATA[RNS press release - Disposal of US Payroll outsourcing business ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190115130116_13935308/ Tue, 15 Jan 2019 13:01:16 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20190115130116_13935308/ <![CDATA[News - Sage under pressure as UBS chops its price target once again ]]> https://www.proactiveinvestors.co.uk/companies/news/212399/sage-under-pressure-as-ubs-chops-its-price-target-once-again-212399.html Sage PLC (LON:SGE) was under pressure on Friday after Swiss investment bank UBS took another dim view of the UK software giant ahead of its trading update next week.

Analysts downgraded the FTSE 100 company, which helps businesses manage things such as money and people, to ‘sell’ as they slashed their price target once again to 520p (from 590p).

READ: UBS slashes target Sage

The investment bank, which only last cut its target at the end of November, said strategic questions and competitive pressures remain.

“The shares are up 17% from their Q4 lows, and while many others in the sector have seen a similar bounce, none other has seen a double-digit EPS downgrade during the period,” read a note to clients.

“While management uncertainty is now addressed, neither the CEO nor CFO brings the "cloud-native experience" sought at the time of Stephen Kelly's departure.”

Analysts also took issue with Sage’s planned R&D spend of £250mln, which they said “pales in comparison” to some of its peers such as US rival Intuit.

What to look for next week

As for next Thursday’s first-quarter update, UBS reckons Sages faces “relatively easy comparatives” from last year.

“Recurring revenues exited 2018 with 7.2% growth in Q4 and was 7.0% in Q1 last year, so the comparative is not too hard, although [software-related services] was decent at +4% in Q1 last year.

“With no expected update on profitability, investors are likely to look at commentary around the performance of the UK and France – two key markets where macro risks are heightened and execution has been volatile in recent quarters.”

Sage shares were down 2.4% to 606p in late-morning trading on Friday.

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Fri, 11 Jan 2019 11:00:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/212399/sage-under-pressure-as-ubs-chops-its-price-target-once-again-212399.html
<![CDATA[RNS press release - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20181231090001_13919061/ Mon, 31 Dec 2018 09:00:01 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20181231090001_13919061/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20181217162335_13906732/ Mon, 17 Dec 2018 16:23:35 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20181217162335_13906732/ <![CDATA[RNS press release - Notification of Transaction of PDMR ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20181212145940_13901461/ Wed, 12 Dec 2018 14:59:40 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20181212145940_13901461/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20181210130021_13897881/ Mon, 10 Dec 2018 13:00:21 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20181210130021_13897881/ <![CDATA[RNS press release - Block listing Interim Review ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20181206172327_13894849/ Thu, 06 Dec 2018 17:23:27 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20181206172327_13894849/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20181206093357_13894029/ Thu, 06 Dec 2018 09:33:57 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20181206093357_13894029/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20181205160437_13893048/ Wed, 05 Dec 2018 16:04:37 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20181205160437_13893048/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20181204163303_13891395/ Tue, 04 Dec 2018 16:33:03 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20181204163303_13891395/ <![CDATA[News - Sage Group names experienced finance boss Jonathan Howell as its chief financial officer from 10 December ]]> https://www.proactiveinvestors.co.uk/companies/news/210483/sage-group-names-experienced-finance-boss-jonathan-howell-as-its-chief-financial-officer-from-10-december-210483.html Sage Group PLC (LON:SGE) has named experienced finance boss Jonathan Howell as its chief financial officer (CFO) with effect from 10 December 2018.

The FTSE 100-listed accounting software provider noted that Howell was most recently been group finance director of Close Brothers Group PLC (LON:CBG) for ten years, and prior to that, was CFO of the London Stock Exchange Group PLC (LON:LSE).

READ: Sage Group names Steve Hare, currently its interim COO and CFO, to vacant CEO role

In addition, the group said Howell has been a non-executive director of Sage since 2013 and chairman of its Audit and Risk Committee.

Sage said it has initiated a process to appoint a new independent non-executive director and chairman of the Audit and Risk Committee.

Steve Hare, who took over as Sage’s chief executive officer at the start of November, said: "I am delighted that Jonathan has agreed to become CFO. He brings both considerable experience as a public company CFO as well as a strong understanding of the business.

“This, combined with our shared belief in the vision to become a great SaaS business for customers and colleagues alike makes him a great addition to the executive team."

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Tue, 04 Dec 2018 12:27:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/210483/sage-group-names-experienced-finance-boss-jonathan-howell-as-its-chief-financial-officer-from-10-december-210483.html
<![CDATA[RNS press release - Appointment of Group Chief Financial Officer ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20181204070019_13889948/ Tue, 04 Dec 2018 07:00:19 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20181204070019_13889948/ <![CDATA[RNS press release - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20181130170439_13887736/ Fri, 30 Nov 2018 17:04:39 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20181130170439_13887736/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20181130165933_13887719/ Fri, 30 Nov 2018 16:59:33 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20181130165933_13887719/ <![CDATA[RNS press release - Holding(s) in Company ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20181128155705_13884098/ Wed, 28 Nov 2018 15:57:05 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20181128155705_13884098/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20181126132435_13880523/ Mon, 26 Nov 2018 13:24:35 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3348/LSE20181126132435_13880523/ <![CDATA[News - UBS slashes target for Sage as it questions firm’s ability to innovate amid shift to cloud ]]> https://www.proactiveinvestors.co.uk/companies/news/209920/ubs-slashes-target-for-sage-as-it-questions-firms-ability-to-innovate-amid-shift-to-cloud-209920.html UBS has slashed its target price for Sage Group PLC (LON:SGE) to 590p from 700p as it questioned the firm’s ability to innovate amid its push to transfer to a cloud-based, software-as-a-service (SaaS) model.

The Swiss bank said while the FTSE 100 software firm had lifted its investment spend to £60mln this year, including a “sUBStantial” £40mln for research & development (R&D), the company’s investments “have lagged competitors for many years now, and we remain concerned about Sage's ability to innovate”.

READ: Sage shares fall as it warns margins investment in cloud transition will dent this year’s profits

“While "cloud-native" solutions reported 35% revenue growth in 2018 to reach £144mln (8% sales), most of the growth came from acquired rather than organically-developed solutions. With competitors still circling, while the strategy looks more plausible, risks remain” analysts said.

The bank added that while the £60mln investment was described as a one-off, they expected R&D spend to “stay elevated” going forward.

In its final results last week, Sage reported that as a result of the increased investment, margins for the current financial year were expected to fall to between 23-25% compared with 27.8% for the year just gone and 28% in fiscal 2017.

Lower growth and sluggish margins expected into new fiscal year

UBS also said that with management incentives focused on “recurring growth rather than total sales” as well as comments by the chief executive Steve Hare that "revenue growth may flatten. It may even dip slightly", lower growth and increased investments were “likely to remain a feature for some time”.

As a result of the new estimates, the bank’s earnings per share (EPS) estimates were cut by 17% to 29.6p for the 2019 financial year, and by 16% and 13% for 2020 and 2021 respectively.

Analysts also said that with the expected elevation in R&D they expected margins to recover only 30 basis points to 24.4% in 2020.

In mid-morning trading Monday, Sage shares were up 0.6% at 580p.

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Mon, 26 Nov 2018 10:30:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/209920/ubs-slashes-target-for-sage-as-it-questions-firms-ability-to-innovate-amid-shift-to-cloud-209920.html