The Sage Group plc Q1 2015 trading update
The Sage Group plc (“Sage”) is today issuing its trading update for the three months ended 31 December 2014.
For the first three months of the year, Group organic revenue increased by 5.3%. The business remains on course to achieve the targets of 6% organic revenue growth and 28% operating margin in 2015, with the anticipated acceleration in revenue growth weighted towards the second half of the financial year, as stated at the time of the 2014 full-year results.
Organic recurring revenue grew by 7.0% for the first quarter, primarily driven by software subscription growth, and organic software and software-related services (“SSRS”) revenue grew by 1.0%. Organic software subscription revenue growth of 28.8% in the quarter maintains the growth momentum reported with the 2014 full-year results. All regions contributed to this performance, with Europe delivering particularly good growth on an established software subscription base.
As stated at the time of the 2014 full-year results, areas of weakness continue to be payments in North America and Europe Enterprise, particularly in France, and Management remain focussed on taking actions in these areas.
Stephen Kelly, Chief Executive Officer, commented:
“This is a solid start to the financial year and the overall growth trajectory remains on track.
I have been privileged to meet many customers in my first 90 days with Sage. SME’s are the growth engine of the economy worldwide and our performance attests to the enduring quality of our relationships with them. We look forward to building on this position as a trusted partner to our customers, and to being even more instrumental in supporting their success in the future.”
The Group's operating cash generation remains strong. The share buyback programme continued during the period and, since 1 October 2014, approximately 3.5m shares have been repurchased for a consideration of £12.4m. Net debt at 31 December 2014, was £542m (£437m as at 30 September 2014).
On 16 October 2014, as previously reported, the Group completed the acquisition of PAI Group, Inc. ("PayChoice"), a provider of payroll and HR services for small and medium-sized businesses ("SMBs") in the US, for a cash consideration of US$157.8m. The acquisition accelerates Sage's move to the Cloud in this market by leveraging PayChoice's Software as a Service ("SaaS") platform.
Management will be hosting an analyst conference call at 08:30am London time; dial-in number +44 (0)203 427 1906, pin code: 3327938. A replay of the call will also be available for one week after the event: Tel: +44 (0)203 427 0598, pin code: 3327938
The Sage Group plc +44(0) 191 294 3068
Stephen Kelly, Chief Executive Officer
Steve Hare, Chief Financial Officer
Murdo Montgomery, Investor Relations
Tulchan Communications +44(0) 20 7353 4200
About The Sage Group plc
We provide small and medium sized organisations, and mid-market companies with a range of easy-to-use, secure and efficient business management software and services - from accounting, HR and payroll, to payments, enterprise resource planning and customer relationship management. Our customers receive continuous advice and support through our global network of local experts to help them solve their business problems, giving them the confidence to achieve their business ambitions. Formed in 1981, Sage was floated on the London Stock Exchange in 1989 and entered the FTSE 100 in 1999. Sage has millions of customers and circa 13,000 employees in 23 countries covering the UK & Ireland, mainland Europe, North America, South Africa, Australia, Asia and Brazil. For further information please visit www.sage.com.