Sage earnings rocket as cloud uptakes surge.
Byline: TOM KEIGHLEY Business writer [email protected]REVENUE and profits have jumped at accounting software maker Sage driven by more uptake of its cloud-based products.
The Tyneside-based giant, which sells across the world, published results for the year to the end of September showing statutory revenue grew 7% to PS2.332bn and statutory operating profits rocketed 43% to PS452m. Investors were shown that annualised recurring revenue increased 11% to PS2.339bn and underlying operating profit was boosted 21% to PS529m.
The FTSE100 firm also announced a PS400m share buyback programme which it said reflected strong cash generation, a robust financial position and the board's confidence in its future prospects. In a separate update, Sage said the programme would start immediately and run no later than June 3, 2025.
Within the results, growth was said to have come from all regions, led by North America which saw a 12% rise in underlying total revenue to PS1.05bn.
Speaking to BusinessLive post results, CEO Steve Hare said that Donald Trump's election in the US might provide a short-term boost to Sage's small and mid-sized customers there who are focussed on the domestic market. Growth over the Atlantic was followed by UK, Ireland, Africa and APAC with an 8% rise to PS670m, and then Europe with 6% growth to PS610m.
Bosses highlighted revenue growth across the firm's Sage Cloud Business products, which increased 16% to PS1.87bn, including cloud native revenue growth of 23% to PS732m. Renewal rate by value reached 101%, which Sage said reflected strong retention rates and a healthy level of sales to existing customers. Meanwhile, the firm's generative AI-powered desktop assistant, Sage Copilot, was rolled out to more customers with much of the development work having been done by the firm's Tyneside-based engineers.
The assistant, which is designed to handle administrative and repetitive tasks and also make operational recommendations for business owners, is currently available to more than 8,000 UK customers of Sage Accounting, Sage for Accountants and Sage Active.
The AI tech is designed to give Sage customers an "extra pair of hands" which Mr Hare says will be attractive to productivity hungry businesses. It will be monetised via a premium service and incrementally rolled out to more Sage customers in due course.
Mr Hare said of the results: "Sage has delivered another successful year, achieving strong, broad-based revenue growth together with significantly higher profits and cash flows.
"We also invested further in our products and continued to execute well against our strategic priorities. Our high pace of innovation continues, as we enhance existing products and expand key cloud solutions throughout our markets.
"The Sage Network platform is enabling us to accelerate the delivery of new services, and we've made good progress with Sage Copilot, our generative AI-based digital assistant, now available with selected products across our portfolio.
"Small and mid-sized businesses remain resilient, despite the ongoing macroeconomic uncertainty, and they continue to choose Sage to help them become more productive and efficient.
"Building on our progress to date, we look forward to delivering further sustainable growth in the year ahead."
Small and midsized businesses continue to choose Sage CEO Steve Hare
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Sage offices at Cobalt Business Park in North Tyneside and, inset, CEO Steve Hare
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| Author: | TOM KEIGHLEY Business writer [email protected] |
|---|---|
| Publication: | The Journal (Newcastle, England) |
| Geographic Code: | 4EUUK |
| Date: | Nov 21, 2024 |
| Words: | 534 |
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