Results round-up

Accounting software company Sage Group’s annual revenues and earnings were slightly higher than forecast as it implemented the first phase of its growth strategy.

In June 2015 the company outlined a plan to gain new customers, retain existing customers and “revolutionise business” in order to grow the company.

For the year ended 30 September, revenue of £1.57bn was up 9.3% compared to last year, just ahead of the consensus analyst forecast of £1.56bn.

Organic revenue increased by 6.1% to £1.57bn driven by a 10.4% rise in recurring revenue, which grew at the fastest rate in a decade to £1.09bn.

Organic operating profits rose 9.2% to £427m and although pre-tax profit slipped 0.4% to £275m, the FTSE 100 company generated a 9% rise in underlying basic earnings per share to 27.84p, beating the 27.1p consensus forecast.

With underlying cash conversion at 100%, supporting a free cash flow of £254m, a dividend of 14.15p per share was declared, an 8% increase from last year.

Software subscription grew 32.3% from 28.9%, in line with the planned transition and planned decline in SQL server reporting services (SSRS) revenue of 8.5%.

During the year there was a 46% increase in software subscription contracts to just over 1m and a rise in retention rates to 86% from 84%.

The company said there was accelerating revenue growth in Europe, Africa and Brazil, but a slower performance in Asia due to a one-off regulatory change last year, while growth in North America was flat.