6th Apr 2020 09:29
(Alliance News) - Sage Group PLC on Monday said it expects revenue growth for financial 2020 to be lower than previously anticipated as it cancelled its GBP250 million share buyback programme.
The accounting software firm said that while organic recurring revenue grew ahead of its guidance in the six months to the end of March, SQL Server Reporting Services and processing revenue declined, with that decline accelerating towards the end of March amid the spread of Covid-19.
Organic recurring revenue represents around 90% of group sales, while SSRS and processing revenue represent around 10% of sales, the company said.
Sage said that as a result of the virus outbreak hurting licence sales and professional service implementations, it expects organic recurring revenue growth for its financial year to the end of September to be below its previous guidance of 8% to 9%. It added that it expects SSRS and processing revenue to decline at a faster rate.
The FTSE 100 company said it is implementing cost-cutting measures in response, adding that its investment into Sage Business Cloud and the adoption of cloud-based solutions by business amid Covid-19 disruption leaves it "well-positioned for the longer-term software-as-a-service opportunity".
As at the end of March, the company had cash of around GBP900 million and over GBP400 million of undrawn facilities under its revolving credit facility expiring in February 2025.
Full unaudited results for the six months to the end of March will be published May 13.
The stock was trading 1.2% higher at 564.80 pence each on Monday morning in London.
By Ife Taiwo; [email protected]
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