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The Sage Group (LON:SGE): Reports Strong Profit on Increased Sales

On 30 November 2011, Sage Group reported its full year results stating that’s its adjusted pretax profit surged 8% to 352.6 million pounds as revenue during the period grew 4% to  1.33 billion pounds. Adjusted earnings per share rose 16% to 20.8 pence. The company also reported a 3% rise in its  software and software-related service revenues and a 5% increase in subscription revenues. The Newcastle-based company reported a strong operating cash flow of £405.1m, up 2.6 per cent from last year’s £394.5 million.
The company reported better than estimated earnings. The firm increased its dividends for the year by 25% to 9.75p per share. The company continues to sick acquisitions as a priority, following the firm’s failed bid for MYOB during the summer. The sale of Sage Healthcare for $245m (£156m) and several new product releases also boosted revenues, the firm said. Sage Group gained 261,000 paying customers during the year and boasted a subscription contract renewal rate of 81%.
The company’s core SME customer base was in under pressure more at the hands of the banking credit crisis. The company is exposed to foreign exchange risk, notably Euro/US$. Overall, macroeconomic concerns with spending cuts in Europe and United States continue to cast a shadow.