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UPDATE: Sage CEO Hare says no plans to ditch London market

16th May 2024 15:34

(Alliance News) - The boss of accounting software firm Sage Group PLC has said he has no plans to join the exodus from the London stock market, but cautioned high-growth firms may struggle to access the capital they need with a UK listing.

Steve Hare, chief executive of Sage, told the PA news agency the group was "very proud of its UK roots" and was not considering switching its listing away from London thanks to a lack of any barriers to it accessing the capital it needs to grow.

Sage is one of only a very small number of major tech companies remaining on the London market, although around 40% of its shareholders are based in the US and America accounted for 45% of its first half sales.

But Hare said less well established firms that are scaling up may struggle to find the capital they need on the UK stock market and called for measures to help boost institutional investment from the likes of pensions funds into UK stocks, and to increase retail personal investing.

It comes amid fears of a mounting crisis on the London stock market as swathes of firms are defecting abroad or being bought up by overseas rivals.

Chancellor Jeremy Hunt is reportedly holding a gathering on Thursday of bosses of some of the UK's biggest private companies at his weekend country residence, with aims to entice more firms to the London market.

"We're very proud of our roots in the UK and in Newcastle and very proud to be a UK tech success story," Hare told PA.

"At the moment there's no reason for us to consider switching because there's no barrier to us growing.

"We can access the capital and already have a number of US shareholders.

"But we're an established company and the focus is more on firms that are scaling up.

"What the UK needs is scale-up capital in the London market and people or funds that are prepared to invest in growth and take a bit more risk."

Sage shares fell 7.6% to 1,106.50 pence on Thursday afternoon as it nudged its annual sales outlook lower.

Sage reported pretax profit surging to GBP203 million for the six months to March 31, from GBP139 million a year ago.

But it trimmed its full-year revenue guidance, saying it expects growth to be "broadly" in line with that seen in the first half, against the 10% it previously forecast.

Hare said the group was pleased with the initial launch of its new generative AI-powered software called Sage Copilot.

It launched first in April for Sage Accounting with around 150 existing customers as early adopters, helping it gain feedback and make tweaks before a wider roll-out later in the year.

source: PA

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