Strong results for Sage

Financial software giant Sage Group has announced strong preliminary year-end results following a number of significant acquisitions that cost more than £618m.

The UK’s largest independent software company increased sales by 22 per cent to £936m, while core UK sales rose seven per cent to £205m.

Sage chief executive Paul Walker says the acquisitions have broadened the range of products and services that the company can offer to small and medium-sized business customers.

‘Our presence in high-growth, high-margin markets continues to expand,’ he said.

Ovum analyst David Bradshaw says the results indicate a good performance, particularly as the UK market is very mature.

‘The market’s seven per cent organic growth is very encouraging, and Sage says it saw growth of nine per cent in the second half of the year,’ he said. ‘In contrast, a three per cent growth in the US is disappointing. The US is always the leader in the software sector and Sage is betting increasingly on this market through new acquisitions.’

The company’s growth in mainland Europe rose five per cent and the rest of the world 17 per cent. Software sales rose 12 per cent to £323m, and services revenue 29 per cent to £613m.

Sage spent £618m on acquisitions, the largest of which were Adonix (France) for £75m, Verus (US) for £171m and Emdeon (US) for £306m.