|FINANCIAL SUMMARY1||FY 16||FY 15||Change|
|- Recurring revenue||£1,092m||£989m||+10.4%|
|- Processing Revenue||£204m||£192m||+6.1%|
|- SSRS Revenue||£271m||£296m||-8.5%|
|Organic operating profit||£427m||£391m||+9.2%|
|Organic operating profit margin||27.2%||26.5%||+70bps|
|Underlying basic EPS||27.8p||25.5p||+9.0%|
|Underlying cash conversion||100%||106%||-6.0%|
|Ordinary dividend per share||14.15p||13.10p||+8.0%|
|STATUTORY SUMMARY||FY 16||FY 15||Change|
|Profit before tax||£275m||£276m||-0.4%|
1 - Organic operating profit is stated before non-recurring items (exceptional costs). Unless otherwise stated, all revenue growth measures referred to in the CEO report are stated on the constant exchange organic basis. Refer to Appendix II on page 18 for information on non-GAAP measures and note 3 of the financial statements for details of items excluded from underlying operating profit.
Stephen Kelly, Chief Executive Officer said: "FY16 saw Sage continue to deliver on the commitment made at our June 2015 Capital Markets Day to perform and transform. The organic revenue growth of 6% is driven by higher quality recurring revenue, which grew at the fastest rate in a decade. The strategy is working – with customers embracing closer relationships with Sage, evidenced by a 46% increase in the number of subscription contracts and a contract retention rate of 86%.
Phase one of the transformation programme has been successfully delivered. For phase two we have ensured that we have the core management team, processes and culture to deliver the best technology ecosystem for our customers – those business builders that drive the world’s economy, creating jobs, growth and prosperity. Phase two of the transformation will continue to be non-linear and focus on driving more technology innovation with increasing focus on new customer acquisition as well as continuing to improve execution against the strategy for Business Builders. We are already starting to see Sage drive faster innovation, a more customer-obsessed DNA and colleagues making a difference in all of our communities through the Sage Foundation.
For FY17, the second full fiscal year of our transformation, our full year guidance for FY17 is for at least 6% organic revenue growth and at least 27% organic operating margin. We will continue to front-load investment in growth in H117, consistent with our execution last year. Consequently, we anticipate stronger H2 growth and accelerating momentum as we exit FY17".
Sage – the market and technology leader for integrated accounting, payroll and payment systems, powered by the cloud and supporting the ambition of the world’s entrepreneurs and business builders. Because when business builders do well, we all do.
For more information, visit sage.com
An analyst presentation will be held at 8.30am today at the London Stock Exchange plc, 10 Paternoster Square, London, EC4M 7LS. A live webcast of the presentation will be hosted on sage.com/investors, dial-in number +44 (0) 20 3427 1913, pin code: 5117993#. A replay of the call will also be available for two weeks after the event: Tel: +44 (0) 20 3427 0598, pin code: 51177993#