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Breaking news: Sage reports £275m pretax profit for FY16

Newcastle-headquartered tech leader Sage has reported another strong financial year, disclosing pretax profits of £275m.

Announcing its audited results for the year ended 30 September 2016 this morning, the FTSE 100 company achieved organic revenue growth of 6.1% and enjoyed its fastest rate of recurring revenue growth for a decade.

The multinational enterprise software company also revealed impressive software subscription growth of 32.3%, up from 28.9% last year.

Sage also revealed it is accelerating revenue growth in Europe, Africa and Brazil. Yet the firm reported slower performance in Asia whilst growth in North America remained consistent with last year.

Stephen Kelly, Chief Executive Officer said: “FY16 saw Sage continue to deliver on the commitment made at our June 2015 Capital Markets Day to perform and transform.

“The organic revenue growth of 6% is driven by higher quality recurring revenue, which grew at the fastest rate in a decade.

“The strategy is working - with customers embracing closer relationships with Sage, evidenced by a 46% increase in the number of subscription contracts and a contract retention rate of 86%.”

Jacqueline de Rojas, Managing Director of Northern Europe, added: “Continuing to serve the UK’s entrepreneurs and business builders – the powerhouses of the UK’s economy, accounting for 99.3% of all private sector businesses at the start of 2016, with 99.9% small or medium-sized - is incredibly important to us at Sage.

“I’m pleased that we are continuing to grow the number of customers in the UK that we are supporting, whilst continuing to focus on providing a high level of customer satisfaction.

“As always, there’s more to do. In 2017, we want to continue championing the needs of entrepreneurs and business builders as the post-EU referendum environment changes become clear, and build on the excitement of Pegg – the industry’s first accounting chatbot – which has opened an important door to a more consumer-led tech approach to the way business accounting and administration will work in the future.”