Sage continues SaaS shift

Growth initiatives aren't always compatible with increased profitability. Sage (SGE) saw organic recurring revenues rise by 10.8 per cent over the 12 months to September 2019 – up from 6.7 per cent a year earlier. Good news, perhaps, given the accounting software group’s ambition to “become a great SaaS [software-as-a-service] company”. But ongoing investment to accelerate its “strategic execution” led organic operating profits to fall 13 per cent to £432m, on a margin of 23.7 per cent, representing a 510 basis point contraction from FY2018.