Enterprise software firm The Sage Group plc has delivered an uptick in its annual profits and revenues thanks to a ‘renewed focus’ on high-quality subscription and recurring revenue.
The Newcastle-headquartered company generated a pre-tax profit of £398m in the 12 months to September 30 2018, a year-on-year increase of 16%.
Revenues for the period climbed 7.6% to £1.85bn, while operating profit rose 22.7% to £427m.
The full-year results were boosted by an improved performance during H2. Both August and September showed recurring revenue growth of more than 7% year on year and sequential month-on-month growth, the firm said, driving momentum into the 2018/19 financial year.
It also recorded recovery in its Northern Europe (UK&I) operation, where sequential increases in recurring revenue growth were seen in every month during the second half of the year.
During Q4, France saw its strongest quarter since Q1 2015/16. Double-digit organic and recurring growth was also achieved in North America, Sage said.
Chief exec Steve Hare commented: “Sage has shown stronger performance in the second half of FY18.
“The renewed focus on high-quality subscription and recurring revenue has generated momentum as we exited the year.”
Looking ahead to its 2018/19 financial year, Sage has forecast organic operating margins to be broadly stable before the impact of a planned £60m investment to accelerate its transition to SaaS.
Mr Hare continued: “As CEO I will put customers, colleagues and innovation at the heart of everything we do to accelerate the transition to becoming a great SaaS business.
“That means investing further resource in Sage Business Cloud, a continued commitment to customer success and a culture which values the individuals and promotes collaboration. Increased investment in these areas will lead to an acceleration in high-quality sustainable recurring revenue growth.”
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