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Results for the six months to 31 March 2022 (unaudited)

Strong first half performance with accelerating growth.
 
  • Strong organic recurring revenue growth of 8 %, driven by Sage Business Cloud growth of 21 %
  • Increasing momentum with ARR growth of 10 %, underpinned by cloud native ARR growth of 43 %
  • Strategic investment continues to drive growth and new customer acquisition
  • Organic operating margin of 19.9 %, in line with expectations
  • Sustained strong cash generation, with underlying cash conversion of 120 %
  • Full year outlook unchanged
 
Alternative Performance Measures (APMs)1
H1 22
H1 212 Change

Organic Financial APMs

Organic Total Revenue
Organic Recurring Revenue
Organic Operating Profit
 % Organic Operating Profit Margin

 

£924m
£866m
£184m
19.9 %

 

£877m  
£800m  
£177m
20.2 %

 

+ 5 %
+ 8 %
+ 4 %
-0.3 ppts

Underlying Financial APMs  

EBITDA
Underlying Operating Profit
Underlying Operating Profit
% Underlying Operating Profit Margin
Underlying Basic EPS  
Underlying Cash Conversion

 

£226m
24.1 %
£183m
19.6 %
12.62p
120 %

 

£229m
24.8 %
£188m
20.4 %  
11.91p  
133 %

 

-1 %
-0.7 ppts
-3 %
-0.8 ppts
+ 6 %
-13 ppts

KPIs   

Annualised Recurring Revenue (ARR)
Renewal Rate by Value
% Subscription Penetration
% Sage Business Cloud Penetration

 

£1,784m  
100 %  
74 %  
72 %

 

£1,625m
97 %
68 %
65 %

 

+ 10 %
+ 3 ppts
+ 6 ppts
+ 7 ppts
 

 Statutory Measures  H1 22  H1 21 % Change
Revenue
Operating Profit
     % Operating Profit Margin
Basic EPS (p)
Dividend Per Share (p)
 £934m
£204m
21.8 %
14.84p
6.30p
 £937m
£203m
21.7 %
13.29p
6.05p
 _
 _
+ 0.1 ppts
+ 12 %
+ 4 %

Please note that tables may not cast and change percentages may not calculate precisely due to rounding

Financial highlights

  • Organic recurring revenue increased by 8 % to £866m, underpinned by Sage Business Cloud growth of 21 % to £572m. Organic total revenue grew by 5 % to £924m.
  • Organic operating profit increased by 4 % to £184m, representing a margin of 19.9 % (H1 21 : 20.2 %). Following a period of additional strategic investment to accelerate growth, organic operating margin has trended upwards from 18.4 % in H2 21, in line with expectations.
  • Statutory operating profit remained stable at £204m (H1 21 : £203m), including non-recurring net gains of £55m (H1 21 : £37m) driven by disposals.
  • Strong underlying cash conversion of 120 % (H1 21 : 133 %) reflects growth in subscription revenue and continued good working capital management.
  • Robust balance sheet, with c. £1.2bn of cash and available liquidity, and net debt to EBITDA of 1.5x.
  • Interim dividend up 4 % to 6.3p, with a progressive policy going forwards of growing the dividend over time.

Strategic and operational highlights

  • Annualised recurring revenue (ARR) up 10 % to £1,784m (H1 21 : £1,625m), reflecting a strong performance across all regions, with growth balanced between new and existing customers.
  • Sage added £150m of ARR through new customer acquisition since H1 21, up from £110m a year earlier.
  • Cloud native ARR up 43 % to £424m (H1 21 : £296m), driven by new customers and supported by migrations from cloud connected and desktop products.
  • Renewal rate by value of 100 %, ahead of last year (H1 21 : 97 %), reflecting improved renewal rates and strong sales to existing customers.
  • Sage Business Cloud penetration of 72 % (H1 21 : 65 %), enabling more customers to connect to Sage’s cloud services and ecosystem via the digital network.
  • Strong performance in key cloud native solutions (Sage Intacct, Sage Accounting and Sage People), together with continued growth in the Sage 50 and Sage 200 franchises.
  • Accelerated our strategy for growth by acquiring Brightpearl, a cloud native retail operations management system.
  • Disposed of Sage’s business in Switzerland and its South African payroll outsourcing business, increasing focus on core geographies and completing the Group’s disposal programme.

 Outlook

Sage’s outlook remains unchanged. We continue to expect organic recurring revenue growth in the region of 8 % to 9 % in FY22, driven by strength in Sage Business Cloud, and in cloud native revenues in particular. We also expect other revenue (SSRS) to continue to decline, in line with our strategy. Organic operating margin is expected to trend upwards in FY22 and beyond, as we focus on scaling the Group.

 

1 Please see Appendix 1 for guidance on the usage and definitions of the Alternative Performance Measures
2 Organic revenue and operating profit for H1 21 have been restated to aid comparability with H1 22. The definition of organic measures can be found in Appendix 1 with a full reconciliation of organic, underlying and statutory measures on page 7. Unless otherwise specified, all references to revenue, profit and margins are on an organic basis..

Contact Presse

Agence LEWIS

Stanislas Grafiada / Martin Loeser
Tél : 06 69 12 89 70 / 01 85 65 86 20 
[email protected]

Sage

Pely Correa
Tél : 06 09 64 53 24
[email protected] / @PelyMendy

A propos de Sage :

Sage a pour ambition de casser les barrières afin que tout le monde puisse s’épanouir, à commencer par les millions de petites et moyennes entreprises, les ETI et les experts-comptables que nous accompagnons avec nos partenaires. Nos clients ont confiance en nos logiciels de gestion de finances, de ressources humaines et de paie pour que leurs activités se déroulent en toute sérénité.

En numérisant leurs processus de gestion, nous connectons les entreprises à leurs clients, fournisseurs, collaborateurs, aux banques et aux gouvernements. Notre mission est de simplifier leur quotidien tout en leur apportant nos conseils. Casser les barrières signifie aussi consacrer notre temps, notre technologie et notre expérience à lutter contre la fracture numérique, les inégalités économiques et contre la crise climatique.

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