20th Nov 2019 08:58
(Alliance News) - Sage Group PLC reported mixed annual results on Wednesday, with strong recurring revenue growth and decline in annual profit.
The accounting software said that for the financial year that ended September 30, revenue was up 4.9% to GBP1.94 billion from GBP1.82 billion in financial 2018. Organic revenue growth was 5.6% to GBP1.8 billion from GBP1.7 billion, underpinned by software subscription revenue growth.
Profit before tax was GBP425.0 million, down 11% from GBP475.0 million in 2018. Underlying profit before tax was down 9% to GBP361.0 million, compared to GBP398.0 million in 2018.
Sage increased its full-year dividend by 2.5% to 16.91 pence from 16.50p "in line with the policy of maintaining the dividend in real terms".
The company has also announced a capital return of GBP250.0 million, reflecting the expected proceeds from Sage Pay and strong cash generation. Sage didn't say what form the capital return would take. It said it will provide further details on completion of the sale of Sage Pay.
Sage on Monday had announced the GBP232 million sale of Sage Pay, provider of payment gateway services, to Elavon, part of US Bancorp.
The company said it expects recurring revenue growth of 8% to 9% in the new financial year, driven by its push into software-as-a-service offerings on the Sage Business Cloud. Meanwhile other revenue, including software and software-related services, is expected to decline "by high single digits".
Chief Executive Officer Steve Hare said: "We will continue to prioritize high-quality recurring revenue growth over SSRS, and whilst we do not expect a linear progression in financial performance during this multi-year transition, our recent strong performance and continued progress towards becoming a great SaaS company means that we look forward with confidence."
Sage Group shares were down 2.6% in London at 722.40 pence each on Wednesday.
By Loreta Juodagalvyte; [email protected]
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