Sage Group PLC sits top of the FTSE 100 risers list after pleasing investors with first half results.
Steve Hare, Chief Executive Officer, commented: "Sage performed strongly in the first half, accelerating revenue growth, increasing profitability and making further progress against our strategic priorities."
The accountancy software provider reported organic revenue in the six months to March 31 rose 10% to £1.09bn with underlying operating profit of £227mln, up 14%.
Shore Capital said revenue was modestly ahead of expectations while profit was around £11mln ahead of consensus.
Sage said it now expects organic recurring revenue growth for financial year 2023 to be in the region of 11%, driven by continued strength in Sage Business Cloud which ShoreCap noted was up from previous guidance of “more than 9%.”
“Altogether, these interim results are incrementally and comprehensively positive, affirming our buy stance,” Shore Capital analysts said.
The broker expects to nudge up its earnings estimates for the next two financial years, reflecting the better-than-expected organic growth and margins in the first half, and continue to believe Sage's organic revenue growth will accelerate materially over the next several years.
Peel Hunt was equally bullish. "In our view, there is not much to fault in these results and while we are fanboys, even we are surprised by the lack of any weakening demand,"
"With both UK and NA now in double-digit growth, with the launch of cloud products in markets like France, it is now clear that the cloudification of Sage is accelerating," the broker said.
"We believe this is likely to lead to upgrades on the cloud-native/connected expectations."
Peel Hunt has a buy rating on Sage and a 962p price target.
Shares in Sage rose 3.35 to 849p in London in early afternoon trading.