Sage enjoys good start to year
Software group Sage has said it is confident of hitting full year revenue growth targets after a “good” start to the new financial year.
The Newcastle-based firm achieved £1 billion in revenues for the first time in the year to September 30.
But the market is expecting Sage to up revenues again to set another record this year, at £1.25 billion.
Sage, which supplies business management software and services to around 5.5 million customers worldwide, said performance across the UK and mainland Europe was good and noted a “modest improvement” in its troubled US business.
The firm axed North American chief executive Ron Verni and finance director Jim Eckstaedt last October after disappointing sales figures from the operation.
Group boss Paul Walker took temporary charge after the departures and Sage is still searching for a replacement for the chief executive, although it said the hunt was “progressing well”.
Sage also moved to reassure that the “defensive characteristics” of its business model would help it weather wider economic uncertainties, with a strong cash flow and high level of recurring revenues from support contracts cushioning the effects of any slowdown.
Analysts at Deutsche Bank said: “Ultimately, this is a reassuring trading statement. While the US brings some risks, we sense the worst is over and also feel there is enough momentum in other areas of the business.”
The firm is expected to bank underlying pre-tax profits of £272 million this year.
Sage employs more than 13,900 staff, with around 1,000 employed at its head office and main UK regional office in Newcastle.
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