27th Jan 2016 07:36
LONDON (Alliance News) - Business software company Sage Group PLC on Wednesday said its organic revenue grew in the first quarter of its financial year, with good growth in its recurring revenue stream.
Sage said its organic revenue, on a like-for-like and constant currency basis, grew 6.6% in the quarter to the end of December.
The growth was driven by recurring revenue, where organic growth hit 10% in the quarter, helped by a 36% growth in software subscription revenue. This offset a 5.3% decline in organic revenue from software and software-related services business, an expected fall as Sage transitions its focus to subscription relationship rather than one-off sales.
Payment processing revenue rose 5.4% in the quarter, helped by the inclusion of Sage Payroll Solutions, which was acquired at the start of the 2015 financial year.
Sage said it saw good revenue growth in Europe, balanced out by some softness in its international business. Africa growth remained strong, though mixed across countries.
Sage said it remains confident it will hit its 2016 organic revenue guidance.
"Our business transformation is on track, and we are focussed on its execution to realise our long-term plan for sustainable and improved quality growth. Whilst we expect the transition to be non-linear, the first quarter represents good progress," said Steve Hare, Sage's chief financial officer.
By Sam Unsted; [email protected]; @SamUAtAlliance
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