17th May 2019 07:46
LONDON (Alliance News) - Sage Group PLC on Friday said it saw double-digit growth in profit in the first half of its current financial year as it progresses its transition away from licence contracts, which attract longer payment terms.
In addition, the FTSE 100-listed company said it appointed John Bates as a non-executive director with effect from the end of May. Bates is a "visionary technologist", Sage said, and currently serves as chief executive of software testing firm Eggplant.
"He has deep experience in the field of technology innovation, including the use of artificial intelligence and machine learning functionality to improve the customer experience. He will be able to bring this perspective to the board as Sage continues on its journey in becoming a great, innovative software-as-a-service company," said Chair Donald Brydon.
Turning back to the results, the enterprise software company said revenue in the six months to the end of March grew 6.5% to GBP957 million from GBP899 million, pushing pretax profit up by 16% to GBP198 million from GBP171 million.
Software and software related services revenue declined by 12% to GBP137 million during the period, reflecting the company's plan to transition towards subscription from licence revenue. As a result, software subscription revenue jumped by 28% to GBP485 million in the first half.
Sage also noted that it saw strong growth in North America, where revenue advanced by 20%, reflecting organic performance and the acquisition of accounting software firm Intacct Corp.
The company lifted its interim dividend by 2.5% to 5.79 pence from 5.65p paid the year before.
Looking ahead, Sage said it now expects to deliver organic recurring revenue growth in its full financial year at the top end or slightly exceed the guided range of between 8% to 9%.
Software and software related services revenue, meanwhile, is expected to further reduce and come in at the lower end or below the guided range of flat to mid-single digit decline.
Overall, expectations for full financial 2019 total revenue remain unchanged, Sage said.
"We are encouraged by the strong start to financial 2019," said Chief Executive Steve Hare. "We will continue to focus on driving high-quality recurring and subscription revenue in the second half of the year."
Related Shares:
Sage Group