Sage turns in solid '08, cautious on future
Waits for acquisition targets to get sensible on prices
Sage had to restrain itself from sounding too optimistic today as it announced full year results that showed revenues and profits up on the year.
The Newcastle-based accounting software vendor said it had produced solid results in a "difficult" market, and while remaining cautious, ventured that it would "weather these turbulent times".
Consolidated revenues for the year ending September 30 came in at £1.3bn, up seven per cent on the year, or 11.9 per cent. When adjusted for foreign currency changes, revenues were up seven per cent. Consolidated pre-tax profit was £241m, compared to last year's £223.3m. Adjusted pre-tax profit was up three per cent to £273.3m.
CEO Paul Walker played up the "strength and flexibility of its business model" when he said had "helped us achieve solid results in difficult market conditions". Unsurprisingly it saw markets weaken in the UK and North America, while Europe and the rest of the world recorded strong results. The firm saw a shift towards subscription revenues in the UK and North America, which offset the challenges in the traditional software market.
The firm has been on an acquisition drive for as long as anyone can remember, but said the last 12 months had been quiet on this front. It said it continued to evaluate a number of buys, but noted that "in many cases, vendor price acquisitions have not as yet adjusted to current market conditions." As the economy dissolves before our eyes, this may change soon, and the firm said its strong balance sheet and cash conversion put it at an advantage when it came to moving in and sweeping up the mess.
Compared to recent statements from large chunks of the business world, Sage's outlook statement was practically giddy.
It said it anticipated the economic climate "will remain uncertain for the near future".
But it added: "Our business model, together with consistently strong cash flows, robust balance sheet and high level of recurring revenue streams, provides a solid foundation for our operations."
In the first months of its new financial year, it said, "growth in subscription revenues had continued to offset weakness in software revenues.
"Although we remain cautious in our outlook, we expect demand for our customer support to continue, which combined with tight cost control and our strong geographic market positions, will allow us to weather these turbulent times." ®
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