23rd Jul 2014 07:45
LONDON (Alliance News) - The Sage Group PLC said Wednesday it is on target to achieve its 6% organic revenue growth goal in 2015, as it saw revenue rise 4.3% in its third quarter.
The company said that in the first nine months of the year it has seen revenue rise 4.7%. It expects its performance in the fourth quarter to be stronger than its third.
Subscription revenue rose 25% in the third quarter, and this strong growth helped to drive up recurring revenue growth of 7.2% in the quarter, Sage said. However, the company said it saw a weaker performance in its payments segment, particularly in North America, hampered by continued pricing pressure.
Sage said it remains cautious in its outlook for payments growth in the fourth quarter.
The company's software and software-related services revenues dropped 3.4% in the quarter, continuing to be hit by weakness in the mid-market in Europe. Sage said it has been more difficult to predict the timing of when deals will close in this market.
It maintained its guidance for operating profit margins for the year.
Sage noted that the strengthening of sterling "continued to be a feature" in its third quarter, as it appreciated against the euro, dollar, South African rand, Australian dollar and Brazilian real. Sage did not disclose the exact impact foreign exchange had on its performance in the quarter.
"The performance of the business continues to be solid and the overall growth trajectory is on track," said Chief Executive Guy Berruyer in a statement.
Shares in Sage were trading down 0.5% at 379.10 pence Wednesday morning.
By Hana Stewart-Smith; [email protected]; @HanaSSAllNews
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