Sage shares soar to record highs as the business software group increases payouts to investors
- Sage Group’s underlying operating profit rose 21% to £529 million last year
- The company’s total underlying turnover rose by almost £200 million to £2.3 billion
Shares in Sage Group rose by a fifth on Wednesday to hit a record high as the business software group increased payouts to investors after a stellar financial year.
The group, which provides businesses with accounting and payroll solutions, told shareholders that underlying operating profit rose 21 percent to £529 million in the year ended November.
Sage proposed a final dividend of 13.5 pence per share, which would increase full-year dividends by 6 percent to 20.45 pence, and a share buyback program worth up to £400 million.
Sage shares rose 19.4 per cent to 1,285.5p, around 1.4 per cent above a previous high in March, making them by far the best FTSE 100 performer for the session.
Total underlying revenue rose by almost £200 million to £2.3 billion, driven by higher sales across all regions and customer subscription penetration growing by three percentage points to 82 percent.
Half of the revenue growth came from the US, where the company’s Intacct business enjoyed solid demand from the non-profit, construction and real estate sectors.
US trading further benefited from price increases and new customers, as well as orders for the 200 cloud, 50 cloud and Sage X products.
Strong performance: ‘Sage has had another successful year,’ says Steve Hare, CEO of Sage Group (above right)
Sage’s underlying sales improved by 7 percent to £505 million in the British Isles, its second largest territory by sales, and by 6 percent to £610 million across Europe.
And on a statutory basis, the Newcastle-based group’s operating profit rose 43 per cent to £452m, thanks to the absence of property restructuring costs and adverse currency movements.
Boss Steve Hare said: ‘Sage has had another successful year, with strong broad-based sales growth coupled with significantly higher profits and cash flows.
“Small and midsize businesses remain resilient despite ongoing macroeconomic uncertainty and continue to choose Sage to help them become more productive and efficient.”
More than 8,000 customers now use Sage Copilot, an artificial intelligence assistant launched in February and designed to handle administrative and repetitive tasks.
Hare added: “Building on our progress to date, we look forward to delivering further sustainable growth in the year ahead.”
For fiscal 2025, the company expects operating margins to “trend upward” and organic revenue to increase by at least 9 percent.
Founded in 1981, Sage is one of the few London-listed technology companies and one of the world’s largest providers of enterprise resource planning software.
Adam Vettese, market analyst at eToro, said: “Sage’s software produces, among other things, pay slips, and that may be exactly what they are delivering to shareholders this morning.
“Sage is already used by millions of small businesses who know and trust the product. The recurring revenue shows that with product innovation now including AI, the company appears to be positioning itself for further growth.”
DIY INVESTMENT PLATFORMS
A. J. Bell
A. J. Bell
Easy investing and ready-made portfolios
Hargreaves Lansdown
Hargreaves Lansdown
Free fund trading and investment ideas
interactive investor
interactive investor
Invest for a fixed amount from € 4.99 per month
Sax
Sax
Get £200 back in trading fees
Trade 212
Trade 212
Free trading and no account fees
Affiliate links: If you purchase a product, This is Money may earn a commission. These deals have been chosen by our editors because we believe they are worth highlighting. This does not affect our editorial independence.