Shares in account software specialist Sage (SGE) climbed 7 per cent on the day these stronger than expected financial results were announced. Reported figures were impacted by £188m in exceptional charges relating to non-core disposals, but this masked decent underlying growth.
Organic revenue growth of 4 per cent was double the rate seen in 2012 and reflected accelerating sales in the second half of the year. North America led the way with 6 per cent growth for the year versus 2 per cent last year, while Europe grew at 2 per cent despite the challenging market conditions. Growth was broad-based and driven by a higher customer renewal rate, organic customer additions and strong momentum in SageOne. Importantly, cash generation remained strong, with operating cash flow of £417m representing 112 per cent of cash profits, up from 106 per cent last time.
This allowed the company to return £572m to shareholders during the year, including £122m from regular dividends, £199m in a special dividend, and £251m in share buy-backs.
Analysts at Citigroup edged up their forecasts for next two years following the announcement. They now expect pre-tax profits of £371m and EPS of 24.6p in the current fiscal year, up from £359m and 22.2p in the year just ended.
SAGE (SGE) | ||||
|---|---|---|---|---|
| ORD PRICE: | 374p | MARKET VALUE: | £4.1bn | |
| TOUCH: | 373-374p | 12-MONTH HIGH: | 381p | LOW: 289p |
| DIVIDEND YIELD: | 3% | PE RATIO: | 94 | |
| NET ASSET VALUE: | 79p* | NET DEBT: | 44% | |
| Year to 30 Sep | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share** (p) | Dividend per share** (p) |
|---|---|---|---|---|
| 2009 | 1.44 | 267 | 15.3 | 7.82 |
| 2010 | 1.28 | 299 | 17.1 | 8.21 |
| 2011 | 1.33 | 331 | 20.4 | 10.3 |
| 2012 | 1.34 | 334 | 19.6 | 10.7 |
| 2013*** | 1.38 | 164 | 3.97 | 11.3 |
| % change | +3 | -51 | -80 | +6 |
Ex-div: 12 Feb Payment: 10 Mar *Includes intangible assets of £1.63bn, or 149p a share **Adjusted to reflect a 77-for-81 share consolidation in June 2013 ***Excludes a special dividend worth 17p a share | ||||
