Full Year 2024 results

Wednesday 20 November 2024
Download the full PDF of the press release

Strong and efficient growth driven by focused strategic execution

Steve Hare, Chief Executive Officer, commented:

“Sage has delivered another successful year, achieving strong, broad-based revenue growth together with significantly higher profits and cash flows. We also invested further in our products and continued to execute well against our strategic priorities.

“Our high pace of innovation continues, as we enhance existing products and expand key cloud solutions throughout our markets. The Sage Network platform is enabling us to accelerate the delivery of new services, and we’ve made good progress with Sage Copilot, our generative AI-based digital assistant, now available with selected products across our portfolio.

“Small and mid-sized businesses remain resilient, despite the ongoing macroeconomic uncertainty, and they continue to choose Sage to help them become more productive and efficient. Building on our progress to date, we look forward to delivering further sustainable growth in the year ahead.”

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

Financial highlights   

• Underlying total revenue increased by 9% to £2,332m, reflecting the strength of our subscription-based recurring revenue model.
• Underlying operating profit grew by 21% to £529m, driving a particularly strong margin increase of 220 basis points to 22.7%, with disciplined cost management supporting ongoing investment.
• EBITDA grew by 16% to £622m, with margin increasing by 160 basis points to 26.6%.
• Statutory operating profit increased by 43% to £452m reflecting strong growth in underlying operating profit, lower M&A-related expenses and the non-recurrence of prior year restructuring charges.
• Underlying basic EPS increased by 23% to 37.9p.
• Free cash flow increased by 30% to £524m, supported by excellent underlying cash conversion of 123%, reflecting growth in subscription revenue and continued good working capital management.
• Robust balance sheet, with £1.1bn of cash and available liquidity, and net debt to EBITDA of 1.2x.

Shareholder returns

• Proposed final dividend of 13.50p, increasing the full year dividend by 6% to 20.45p, in line with our progressive policy.
• Share buyback programme of up to £400m announced separately today, reflecting Sage’s strong cash generation, robust financial position, and the Board’s confidence in Sage’s future prospects.

Strategic and operational highlights

• Underlying annualised recurring revenue (ARR) up 11% to £2,339m, with growth across all regions balanced between new and existing customers.
• Renewal rate by value of 101% (FY23: 102%), reflecting strong retention rates and a good level of sales to existing customers.
• Sage Business Cloud revenue increased by 16% to £1,871m (FY23: £1,619m), including cloud native revenue growth of 23% to £732m (FY23: £597m).
• Subscription penetration increased to 82% (FY23: 79%) driven by growth in subscription revenue of 13% to £1,910m (FY23: £1,694m).
• Strong strategic progress as we further expand our global cloud solutions, deepen our vertical-specific capabilities and introduce new software suites across the Group.
• Continued to scale the Sage Network and roll out Sage Copilot, our generative AI-powered assistant, now available to over 8,000 customers of Sage Accounting, Sage for Accountants and Sage Active.
• Simplified our strategic framework to reflect evolving priorities.

Outlook

About Sage

Sage exists to knock down barriers so everyone can thrive, starting with the millions of small and mid-sized businesses (SMBs) 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.

Enquiries:

A presentation for investors and analysts will be held at 8.30am UK time. The live webcast can be accessed via sage.com/investors or directly via the following link: https://edge.media-server.com/mmc/p/czay8sbw. To join the conference call, please register via https://register.vevent.com/register/BI0c875da171514d128ecd0423d836f3f9.