Member Article

Sage’s customers ‘the entrepreneurs’ in ‘phase of transformation’

Releasing unaudited results this morning for the six months ended 31 March 2016, Sage saw its revenue increase 4.1% to £747m, up from £717m last year.

However, pretax profits amassed to £142m for the period, a 15.6% dip on the £168m for H1 last year.

Yet, the first half of the year has been about more than raw financials for the Gosforth-headquartered multinational software giant.

Stephen Kelly, Chief Executive Officer, explained: “Sage continues to perform and transform. We made a good start to FY16 with double digit recurring revenue growth as validation that customers are embracing closer subscription relationships.

“In this phase of the transformation, we have been very focussed on improving the capability of our management and creating a culture where customer obsession and innovation becomes a way of life at Sage.”

Accelerating growth

Outlined during the firm’s 2015 full year results, Sage has made a planned strategic investment towards the first half of FY16 in improving the quality of its operations.

Areas of investment included the sales and marketing functions, wherethe business added around 180 salespeople.

Moreover, higher quality software subscription revenue is supported by over 842,000 contracts, up from 561,000 year on year.

Now, Sage is continuing to invest in cloud technology to support and accelerate its future growth.

Investment in Fairsail

This morning Sage also announced that it has entered into an agreement to acquire 20.7% of Fairsail, a privately owned software developer providing human capital management (HCM) cloud solutions for mid-sized businesses, for £10m.

Mr Kelly continued: “Our customers are the entrepreneurs who drive economic growth and prosperity. These entrepreneurs deserve awesome technology that is an enabler to their growth and success.

“The Sage cloud and partner ecosystem places the customer at the centre to provide a complete business solution from business start-up through scale-up to vibrant enterprise businesses.

“We are pleased with the early progress made and recognise there is still much to do in the transformation. We remain confident in achieving our full year targets of at least 6% organic revenue growth and organic operating margin of 27%.”