Sage flags growth despite revenue slip to £1.8bn

Sage Group CEO Steve Hare

Shares of Sage Group, the Newcastle-based international SME accounting software giant, rose about 10% on Wednesday after it published results for the year ended September 30, 2021, showing revenue slipped 3% to £1.846 billion and profit before tax fell 7% to £347 million.

Sage said “organic recurring revenue” increased 5% to £1.637 billion, underpinned by Sage Business Cloud growth of 19% to £997 million.

“Organic total revenue” grew 3% to £1.778 billion.

In its outlook, Sage said: “We expect to achieve organic recurring revenue growth in the region of 8% to 9% in FY22, driven by continuing strength in Sage Business Cloud, and in cloud native revenues in particular.

“We also expect other revenue (SSRS & processing) to continue to decline, in line with our strategy.

“Consistent with previous guidance, organic operating margin is expected to trend upwards in FY22 and beyond, as we now focus on scaling the group.”

Dividend per share rose 2.5% to 17.68p.

Sage Group CEO Steve Hare said: “Sage delivered a strong performance in FY21.

“We achieved recurring revenue growth ahead of our initial expectations and ended the year with real momentum, supported by our strategic investment in sales, marketing and innovation.

“Our cloud native solutions have performed particularly well, as more new customers choose Sage to take care of their accounting, people and payroll processes – removing friction, delivering business insights, and giving them a competitive edge …

“Having reshaped and invested significantly in the group over the last three years, we are now focused on growing the business in absolute terms, both organically and through acquisitions.

“The small and mid-sized businesses that power the global economy are adopting digital solutions at a faster rate than ever before, and through our trusted technology and human approach, Sage is well positioned to support them.

“I am confident that, through our refreshed strategic framework, we will deliver further sustainable growth, driving the success of Sage now and in the long term.”