Feeds

UK recession rattles Sage's cage as revenue growth flattens

Abacus-sliding software pushers post H1 figures

Designing a Defense for Mobile Applications

The Sage Group is keeping close tabs on the UK economy amid fears of the "exposed risk of a renewed recession".

The mid-market British accounting software maker hit out after posting first half revenues of £661.2m, up 2 per cent for the period ended 31 March excluding results of the disposed US healthcare biz.

Sales included a 5 per cent hike in subscription-based products to £451.4m and a 4 per cent decline in standalone software and software related revenues (SSRS) to £221.7m.

The firm kept a tight grip on costs, reporting EBITA of £180.9m, up 1 per cent and pre-tax profits of £176.1m, up 2 per cent.

Customer acquisition slowed, with 129,000 new accounts brought on board in H1 compared to 131,000 a year ago, and Sage had an 81 per cent renewal rate on support contracts, unchanged on the same period in 2011.

CEO Guy Berruyer said the top line numbers reflected the "switch to subscription revenues" and reflected the "challenging economic conditions, particularly in Europe".

Highest growing areas included the payments business which grew 10 per cent and the Sage ERP X3 range, up 3 per cent, the firm said.

Sage is trying to play catchup in the cloud market and last week struck a deal with Microsoft to use the Azure platform to develop the Sage 200 line for UK SMEs.

It claimed to have doubled the customer base for its Sage One software-as-a-service range in the last six months and is preparing to launch SaaS in the US imminently.

Revenues in Europe were up 1 per cent to £400m, with Spain "worst hit", and the French market "uncertain and deteriorating" in contrast to the stronger UK and German country operations, the firm said.

Sales were flat in North America at £199m, and leaped 11 per cent in Africa, Australia, the Middle East and Asia to £74m.

Berruyer said Sage had adopted a "more disciplined and rigorous approach to resource allocation, prioritisation and execution" in higher growth areas but held concerns about the short-term future.

"The macroeconomic environment remains a considerable headwind for a number of our European markets, and we remain watchful of the outlook for the economic climates in France and the UK in particular, as they remain exposed to the risk of renewed recession," he said. ®

The smart choice: opportunity from uncertainty

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Airbus promises Wi-Fi – yay – and 3D movies (meh) in new A330
If the person in front reclines their seat, this could get interesting
UK Parliament rubber-stamps EMERGENCY data grab 'n' keep bill
Just 49 MPs oppose Drip's rushed timetable
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
Samsung threatens to cut ties with supplier over child labour allegations
Vows to uphold 'zero tolerance' policy on underage workers
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
prev story

Whitepapers

Reducing security risks from open source software
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.