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Half year 2022 results

The Sage Group plc unaudited results for the six months ended 31 March 2022

13 May 2022
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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 £924m
£877m +5%
Organic Recurring Revenue
£800m +8%
Organic Operating Profit
£177m +4%

% Organic Operating Profit Margin

19.9% 20.2% -0.3 ppts
Underlying Financial APMs
£226m £229m -1%
         % EBITDA Margin 24.1%
-0.7 ppts
Underlying Operating Profit
£183m £188m -3%

% Underlying Operating Profit Margin

19.6% 20.4% -0.8 ppts
Underlying Basic EPS
12.62p 11.91p +6%
Underlying Cash Conversion 120% 133% -13 ppts
Annualised Recurring Revenue (ARR) £1,784m £1,625m +10%
Renewal Rate by Value 100% 97% +3 ppts
% Subscription Penetration 74% 68% +6 ppts
% Sage Business Cloud Penetration 72% 65% +7 ppts
Statutory Measures H1 22 H1 21 % Change
£934m £937m  -
Operating Profit £204m £203m  -

% Operating Profit Margin

21.8% 21.7% +0.1 ppts
Basic EPS (p)
14.84p 13.29p +12%
Dividend Per Share (p)
6.30p 6.05p +4%

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

Commenting on the results, CEO Steve Hare said:

“We achieved a strong first half performance, in line with expectations, demonstrating sustainable growth and building further momentum. Our strategic investment in sales, marketing and innovation has continued to accelerate revenues across Sage Business Cloud, underpinned by increasing levels of new customer acquisition. Cloud native solutions, which now account for around a quarter of Group ARR, have performed particularly well.

“While we are mindful of increased macroeconomic and geopolitical uncertainties, our customers remain confident and resilient. Our aim is to knock down barriers to their success, delivering solutions that make their lives easier, and we continue to make good progress against our strategic objectives. I am confident that our ambition to become the trusted network for small and mid-sized businesses will drive the success of Sage, as we focus on growing both revenue and earnings in absolute terms.”

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.


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.

About Sage

Sage exists to knock down barriers so everyone can thrive, starting with the millions of Small and MidSized Businesses served by us, our partners and accountants. Customers trust our finance, HR and payroll software to make work and money flow. By digitising business processes and relationships with customers, suppliers, employees, banks and governments, our digital network connects SMBs, removing friction and delivering insights. Knocking down barriers also means we use our time, technology and experience to tackle digital inequality, economic inequality and the climate crisis.

Sage: +44 (0) 7721 121147
James Sandford, Investor Relations  
Becky Potgieter/Rachel Bibby, Corporate PR
Finsbury Glover Hering: +44 (0) 20 7251 3801
Conor McClafferty
Sophia Johnston

1Please see Appendix 1 for guidance on the usage and definitions of the Alternative Performance Measures.

2Organic 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.

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