The Sage Group plc (LON:SGE) has announced plans to scrap the £250mln share buy-back programme, after buying £6mln worth of shares.
The accounting software provider said full-year organic recurring revenue growth will be below the previously guided range of 8% to 9%, and other revenue is expected to drop “significantly” in the second half.
READ: Sage shaves off £15mln from Brazilian sale
The FTSE 100-listed firm expects a slowdown in new customer acquisition as companies defer purchase decisions or collapse, “leading to an increase in churn”.
The company said it has continued operations with “minimal disruption” so far as staff works from home during the coronavirus pandemic.
As of 31 March, Sage had £900mln in cash and over £400mln in undrawn facilities.
"We regard Sage as a well-managed and resilient business supported by high-quality recurring revenues and a diversified customer base of small and medium businesses," analysts at Shore Capital commented.
"We also believe the Group has the balance sheet to weather a downturn."
However, the broker suspended financial forecasts and the 'hold' recommendation, while keeping the target price at 558p.
Shares rose 1% to 566.6p on Monday at the opening bell.
--Adds analyst's comment--