Shares of Sage Group plc, the Newcastle-based FTSE 100 global software business, rose to a record high on Wednesday after the firm announced strong results for the year to September 30, 2023, an increased dividend, and a share buyback programme of up to £350 million.

Sage Group sells accounting, financial, HR and payroll software to SMEs (small and medium-sized enterprises) internationally.

Sage said its underlying total revenue increased 10% to £2.184 billion, underlying operating profit rose 18% to £456 million, and full year dividend will rise 5% to 19.3p.

Sage shares rose as much as 14% to around £11.40 to give the firm a stock market value of about £11.7 billion.

Sage Group CEO Steve Hare said: “Sage performed well in FY23, delivering double-digit revenue growth, increased profitability and strong cash flows.

“We sustained good momentum throughout the year in all regions, driven by consistent strategic execution.

“We continue to help small and mid-sized businesses succeed, providing them with the tools and expertise they need to simplify their accounting and HR processes, streamline their operations, and make more informed business decisions. 

“Through the Sage Network, we are delivering innovative, AI-powered services to customers, faster and more efficiently than ever before.

“Small and mid-sized businesses are continuing to digitalise, despite the macroeconomic uncertainty.

“We are building a resilient platform to deliver sustained, efficient growth, and I am confident that Sage is well positioned to take advantage of the market opportunity in 2024 and beyond.”

Sage achieved underlying recurring revenue growth of 12% to £2.096 billion, driven by a 25% increase in Sage Business Cloud recurring revenue to £1.628 billion.

More than 96% of the group’s revenue is now recurring.

On a regional basis, Sage said its North America business increased recurring revenue by 16% to £944 million with a strong performance from Sage Intacct and cloud connected solutions.

Sage said its UKIA region grew recurring revenue 10% to £611 million driven by increased demand for cloud native solutions as well as Sage 50 cloud.

In Europe, Sage said recurring revenue increased 7% to £541 million reflecting growth across the Sage Business Cloud portfolio.

In its outlook, the firm said: “Sage enters FY24 with good momentum driven by consistent strategic execution.

“Looking ahead, we expect organic total revenue growth in FY24 to be broadly in line with FY23.

“Operating margins are expected to trend upwards in FY24 and beyond, as we focus on efficiently scaling the group.”

On the share buyback, Sage said: “The share buyback programme is consistent with the group’s disciplined capital allocation policy, and reflects the board’s confidence in Sage’s future prospects, together with Sage’s strong cash generation and robust financial position.

“Sage continues to have considerable financial flexibility to drive the execution of its growth strategy.”