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Financial performance

Watch Steve Hare introduce our H1 22 results.


Investment case

Building sustainable shareholder value

Our scale and experience form the foundations for our sustainable growth, and are core to Sage’s investment case.

Unique assets and capabilities

  • We serve a strong and loyal customer base through Sage Business Cloud, including fast-growing cloud native solutions and a resilient base of cloud connected and desktop products.
  • Our people differentiate Sage, through their dedicated and hands-on approach to solving customer problems, ensuring our technology and service retains a
    human touch.
  • Our well-established partner network of accountants and resellers, together with a growing ecosystem of ISVs, enhances our capabilities and reach.

Innovating and investing to drive growth

  • We have progressively increased investment in the business, driving innovation in Sage Business Cloud solutions and enhancing the customer experience.
  • Through our focus on innovation, we are enriching our cloud solutions with AI and Machine Learning capabilities, making them easier to use and more compelling for customers.
  • We are backing our core solutions with increased sales and marketing spend, which is leading to greater brand engagement and powering growth.

The trusted network for SMBs

  • Sage connects businesses with their customers, employees, suppliers and regulatory authorities. By leveraging this network, Sage has a significant opportunity to remove friction from and add value to these relationships.
  • By enabling network participation and enhancing the digital services available, we can attract and retain more customers to power the insights needed to develop more innovative experiences.
  • The development of the digital network builds on Sage’s well-recognised brand and reputation as a trusted advisor, renowned for keeping customers safe and compliant.

Financially robust position

  • We have a high-quality revenue base which is 92% recurring in nature, with 70% from software subscription contracts.
  • Sage is a highly cash-generative, low capital intensity business, and has achieved underlying cash conversion of over 100% for each of the last three years.
  • We balance the need for organic and inorganic investment with returns to shareholders through dividends, supplemented by share repurchases where appropriate.

A summary of our recent financial performance and strategic KPIs.


 FY21  FY20  FY19
Alternative performance measures
     
Organic total revenue £1,778m
£1,725m  £1,665m
Organic total revenue growth
3.1%
3.6%
6.0%
Organic recurring revenue
£1,637m
£1,553m
£1,433m
Organic recurring revenue growth
5.4%
8.4% 11.2%
Recurring revenue penetration
92%
90% 86%
Organic operating margin
19.3%
22.0% 24.0%
Underlying basic EPS 23.09p
26.74p
27.24p
Underlying cash conversion
126%
123% 129%
Statutory measures
     
Revenue £1,846m
£1,903m
£1,936m
Operating profit £373m
£404m
£382m
Operating profit margin
20.2%
21.3%
19.7%
Basic EPS 26.33p
28.38p
24.49p
Dividend per share
17.68p
17.25p 16.91p

  FY21
 FY20  FY19
Annualised recurring revenue (ARR) growth 7.7%
4.7% 12.9%
Renewal rate by value
99%
99%
101%
Subscription penetration
70%
65% 56%
Sage Business Cloud penetration
67%
60% 50%

Definitions of Sage’s Alternative Performance Measures and KPIs can be found on p.249 of Sage’s FY21 Annual Report and Accounts.

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