Sage impresses with profits lift

Accountancy software firm Sage offset a disappointing performance in North America to post half-year figures ahead of market expectations today.

The group further buoyed investors – shares rose 6% – by pointing out that 60% of its revenues came from recurring subscription contracts, leaving it well positioned for growth in times of challenging economic conditions.

Sage reported adjusted pre-tax profits of £138m (€176m) for the six months to March 31, a gain of 9% on a year earlier after businesses in the UK, mainland Europe and the rest of world achieved good revenues and profit growth.

North America disappointed with flat revenues and a dip in profits, but Sage said it had taken steps to improve the division’s healthcare arm.

The Newcastle-based firm axed North American chief executive Ron Verni and finance director Jim Eckstaedt last October after disappointing sales figures. Sue Swenson, a former senior manager at Pacific Bell, took charge of the division at the start of this month.

Today’s figures improved on the guidance given by Sage earlier this year. Panmure Gordon stockbrokers said sales of £640m (€816m) were £23m (€29m) higher than market expectations, while profits figure beat consensus by £9m (€11.5m).