Sage’s (SGE) full-year results showed positive momentum, with chief executive Stephen Kelly saying “customers are flocking to the Sage business cloud”. This has been no mean feat, given the company had little cloud presence back in 2014. The group’s transformation programme, announced in June 2015, is now complete and this seems to have paid off, with 6.6 per cent organic revenue growth in the 12 months to September, buoyed by 9 per cent recurring revenue growth.
Sage also acquired Intacct and Fairsail (now called Sage People) during 2017. Intacct, purchased for $850m (£654m) in August, has continued to grow at more than 30 per cent and saw over $100m in annualised recurring revenues for the first time.
The group achieved double-digit organic sales growth in its international segment, led by Brazil, Africa and the Middle East. Elsewhere, Northern Europe saw the greatest improvement at 7 per cent, despite only 1 per cent growth in France. Sage is concentrating on “re-energising” its partner channel in France, and generating growth through the business cloud.
Bosses have raised their targets for 2018, expecting organic sales growth of 8 per cent and an organic operating margin of around 27.5 per cent.
Analysts at Stifel forecast pre-tax profits of £519m and EPS of 34.8p for the year to September 2018.
| SAGE (SGE) | ||||
| ORD PRICE: | 790p | MARKET VALUE: | £8.5bn | |
| TOUCH: | 789.5-790p | 12-MONTH HIGH: | 793p | LOW: 595p |
| DIVIDEND YIELD: | 2.0% | PE RATIO: | 33 | |
| NET ASSET VALUE: | 108p* | NET DEBT: | 69.6% | |
| Year to 30 Sep | Turnover (£bn) | Pre-tax profit (£m) | Earnings per share (p) | Dividend per share (p) |
| 2013 | 1.38 | 164 | 4.0 | 11.3** |
| 2014 | 1.35 | 279 | 17.3 | 12.2 |
| 2015 | 1.44 | 276 | 18.1 | 13.1 |
| 2016 (restated) | 1.44 | 242 | 17.4 | 14.2 |
| 2017 | 1.72 | 342 | 23.9 | 15.4 |
| % change | +19 | +41 | +37 | +9 |
| Ex-div: | 8 Feb | |||
| Payment: | 2 Mar | |||
*Includes intangible assets of £2.3bn, or 212p a share **Excludes special dividend of 17.1p a share | ||||
