Member Article

Sage report substantial increase in organic profits

Sage have reported a rise in organic operating profit over the first half of the year, driven by a reduction in overheads and the strong performance of its Sage One product.

The Newcastle-headquartered software firm reported organic operating profit of £180 million during the period, compared with £165 million in the same period the year before.

A high subscription renewal rate of 83% helped to maintain revenue across the half year and annualised value of Sage’s software subscriber base increased 24% to £201 million.

The firm said it was particularly pleased with traction in the UK and Ireland market of its Sage One product, a payroll and accounting function aimed at small businesses.

Paying subscriptions in the market had almost trebled to 33,000 over the last year, and the firm expect the adoption of cloud services across the world to accelerate growth of Sage One in coming months.

Connected services, including Apps for tablets and mobile devices, were also noted as an “exciting” opportunity for the business.

Alongside its results, the firm also announced that current Sage Group chief executive Guy Berruyer will retire by the end of March 2015.

Commenting on the results, Guy said: “This is a good set of results, with the increase in organic recurring revenue growth demonstrating that the strategy is working well.

“Sage is changing, with greater focus, investment in technology to address customer needs and the move to subscription all delivering results.

“We remain confident that the good first half performance will be carried through to the full year, and of achieving our target of 6% organic revenue growth in 2015.”

This was posted in Bdaily's Members' News section by Tom Keighley .