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The Sage Group plc audited results for the year ended 30 September 2012

Download the full PDF of the press release

Delivering on our strategy

Financial highlights

  • Organic# revenue growth of 2%* in the year (2011: 4%*), with 6%* growth in subscription revenue (2011: 5%*growth) and 5%* contraction in software and software-related service revenue (2011: 3%* growth)
  • Organic revenue growth of 3%* in H2 compared to 2%* in H1 demonstrates improved momentum, particularly in North America
  • EBITA margin maintained at 27% (2011: 27%*), reflects ability to protect margins in challenging markets whilst investing for growth
  • Underlying pre-tax profit of £356.3m (2011: £343.5m*), an increase of 4%* over the year
  • Underlying earnings per share of 19.86p (2011: 20.28p*), reflecting an increase in tax rate to 29% from 23%
  • Strong operating cash flow of £383.8m (2011: £405.1m), representing 106%^ of EBITA
  • Proposed final dividend of 6.67p per share (2011: 7.07p per share), resulting in a total dividend for the year of 10.15p per share (2011: 9.75p per share), an increase of 4%
  • £299.8m returned to shareholders in the year through share buyback programme, supporting good progress towards capital structure target with net debt of £161.5m at 30 September 2012 (30 September 2011: £24.9m)

Delivering on our strategy

  • Good progress made with our three cornerstones to drive accelerated growth:
  • Focusing our business: disposal of Sage Healthcare; established a significant presence in Brazil; resource allocation programme to drive investment in growth; R&D centralised in three largest markets
  • Capturing the technology opportunity: Sage One customer growth in UK & Ireland; development of hybrid cloud solutions on Azure; strong performances by our payment services businesses
  • The benefits of subscription: continued good progress with premium support; launch of subscription pricing options in North America, Europe and South Africa
  • Strength of our offering to new and existing customers continues with the addition of 289,000 (2011: 261,000) new paying customers during the year and renewal rate on support contracts maintained at 81%

Guy Berruyer, Chief Executive, said:
“We delivered a solid performance in the context of a macro-economic environment which remained difficult in most of our markets. We achieved strong growth in recurring revenue and focused on disciplined resource allocation, protecting margins at the same time as investing for growth. We are committed to driving strategic change and I am pleased with the momentum we have established with our growth initiatives. A feature of the year has been the variable trading performance by geography.

Europe’s performance reflected good growth by the UK and Germany, offset by the impact of weaker markets in France and Spain. North America delivered the anticipated improvement in the second half of the year while AAMEA continued to deliver very strong growth. As we look forward, the global macro-economic outlook remains uncertain and we are watchful of the environment in Europe, particularly in France. We are making good progress with our strategy for accelerating growth and remain confident we will continue to deliver on our strategic and financial goals.”

#Organic figures exclude the contributions of current and prior year acquisitions, disposals and non-core products.

*Underlying figures neutralise the impact of foreign exchange movements and exclude amortisation of acquired intangible assets, acquisition-related items and imputed interest.

EBITA is defined as earnings before interest, tax, amortisation of acquired intangible assets, acquisition-related items and is after neutralising the impact of foreign exchange movements.

^Cash generation from operations represents cash flows from operating activities divided by EBITA. EBITA for cash generation purposes is after acquisition-related items.

Enquiries

The Sage Group plc +44 (0) 191 294 3068
Tulchan Communications +44 (0) 20 7353 4200

Guy Berruyer, Chief Executive Officer David Shriver
Paul Harrison, Chief Financial Officer Lucy Legh
Murdo Montgomery, Investor Relations

An analyst presentation will be held at 8.45am today at Deutsche Bank, Winchester House, 1 Great Winchester Street, London EC2N 2DB.

A live webcast of the presentation will be hosted on www.investors.sage.com, dial-in number +44 (0)20 3140 0668, pin code: 233217#. A replay of the call will also be available for two weeks after the event: Tel: +44 (0)20 3140 0698, pin code: 388138#.

The Sage Group plc will today publish its Annual Report & Accounts for the year ended 30 September 2012 on the Company’s website at www.investors.sage.com.