Proactive Investors - Run By Investors For Investors

Sage reiterates guidance after strong start to fiscal year

The group said its financial position remains strong and net debt as at 31 December 2018 was £602mln (£668m as at 30 September 2018)
Sage Group
The group reports in sterling but earns a lot of dollars and euros so it is facing exchange rate tailwinds

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.

View full SGE profile View Profile

Sage Group Timeline

Related Articles

man with mobile biometric tracking device
March 20 2019
Ipsidy has seen the market for its proprietary biometric technology explode after the hacks of Equifax Inc, Target Corp and Home Depot
October 18 2018
Managed services revenue jumped 52% in the first half of 2018 with the order book standing at £2.4mln.
November 06 2018
it aims to become one of the leading firms within the health benefits industry in Canada and to launch in the US and globally

© Proactive Investors 2019

Proactive Investors Limited, trading as “Proactiveinvestors United Kingdom”, is Authorised and regulated by the Financial Conduct Authority.
Registered in England with Company Registration number 05639690. Group VAT registration number 872070825 FCA Registration number 559082. You can contact us here.

Market Indices, Commodities and Regulatory News Headlines copyright © Morningstar. Data delayed 15 minutes unless otherwise indicated. Terms of use