Accounting software specialist Sage (SGE) is doing its best to persuade shareholders to sit out the weakness currently afflicting its operations in Europe by offering a £200m special dividend, worth 17p a share. The ongoing largesse has kept the share price firm during a period of transition which involves the company adapting its computer-based payroll and payment products to the demands of cloud computing.
Sage's underlying performance was solid rather than spectacular and, after stripping out the effects of a £196m impairment charge for discontinued products and assets held for sale, cash profits rose by 7 per cent from £179m to £191m on organic revenues up 3 per cent. Europe was still the main cause for concern. Problems in Spain, France and now Germany crimped the momentum achieved in the UK & Ireland and revenues and profits from the region edged up 2 per cent to £403m and £114m, respectively.
Trading in the smaller Americas segment was far more positive, with an improving US economy leading the way. Revenues and profits were both up by 15 per cent to £230m and £57m, respectively, buoyed by increased cross-selling, higher recurring revenues and improved margins as more customers moved to higher-priced products on renewal.
Investec forecasts full-year underlying pre-tax profits of £362m and EPS of 21p, up from £356m and 19.7p in 2012.
SAGE (SGE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 349p | MARKET VALUE: | £4.07bn | |
| TOUCH: | 349-350p | 12-MONTH HIGH: | 356p | LOW: 245p |
| DIVIDEND YIELD: | 3.0% | PE RATIO: | 107 | |
| NET ASSET VALUE: | 93p* | NET DEBT: | 21% | |
| Half-year to 31 Mar | Turnover (£m) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
|---|---|---|---|---|
| 2012 | 673 | 167.1 | 9.06 | 3.48 |
| 2013** | 708 | -7.7 | -6.28 | 3.69 |
| % change | +5 | - | - | +6 |
Ex-div: 15 May Payment: 7 Jun *Includes intangible assets of £1.73bn, or 148p a share **Excludes 17p share special dividend expected to be paid in June 2013 | ||||
