Accounting software maker Sage Group said today it remains on target to hit market expectations, but admitted that organic growth looks set to slow for the year ahead.

The Newcastle-based firm, which punts much of its financial software at the small and medium-sized (SME) market where Microsoft has recently started flexing its muscles, said in an interim management statement that trading for the three months ended 31 December 2007 was in line with expectations.

Sage said that its troubled North American Healthcare arm, which in recent months has been the subject of a management reshuffle, continues to "refocus its business", although the firm doesn't expect revenue growth to immediately improve in that sector.

The FTSE 100-listed company added that it's still looking for a new North American CEO.

On the economy at large, it struck a similar note to its statement back in November last year. "Whilst we recognise the current uncertainties in the macro-economic situation," said CEO Paul Walker, "the defensive characteristics of our business model, including strong cash flows and a high level of recurring revenues through our support contracts, mean that we are well placed to meet these challenges."

Sage said that its UK and mainland Europe business had performed well, though added that organic growth had "moderated somewhat" compared to its 2006/2007 fiscal year.

Following the statement, shares in Sage rose nearly two per cent at 227 pence on the London Stock Exchange. ®