Sage H1 profit rises as subscriptions grow

For the six months to 31 March, pre-tax profit was up 41.1% to £180m on revenue of £840m, up 22.7% from the first half of 2016.

Basic earnings per share came in at 12.57p compared to 9.11p and operating profit was 31.6% higher at £180m.

The company reported software subscription contract growth of 48% to over 1.2m contracts and a renewal rate of 86%, up from 84% the year before.

The board proposed an 8.8% increase in the interim dividend to 5.22p per share.

Sage said it was "very confident" of exceeding its full year guidance of 6% revenue growth and reiterated its guidance of at least 27% operating margin on an underlying basis.

Chief executive officer Stephen Kelly said: "These are positive results in line with market expectations and there are clear signs our strategy is working, with seven of our nine largest geographies, that collectively generate 95% of our revenues, now delivering growth in excess of our revenue guidance.

"The investments in our go-to-market functions are starting to bear fruit: our cloud-enabled products are growing strongly and we have made progress in our new customer acquisition strategy, driving momentum in Q2 that will continue throughout H2 and as we exit FY17."