Geordie accountancy software seller Sage believes pent-up demand among its customers means it will be in for a sales bean-feast when the market recovers.

In the first half of the year Sage said its cost-cutting measures had led to a strong increase in profitability. Dividends per share went up three per cent to 2.58p.

Revenue is stabilising - it fell four per cent rather than the six per cent drop seen in the first half of 2009, ended 30 September.

Sales were £718.9m versus £748.4m for the first half of 2009. Pre-tax profit was £159.6m compared to £139.2m last year - a 15 per cent improvement.

Renewal rates for support contracts are running steady at 81 per cent and the company gained 127,000 customers in the period.

Operating cash flow was £236.6m and EBITDA margin was up one per cent to 25 per cent.

Chief Executive Paul Walker said: "Our customers remain cautious ... Following a period where SMEs have delayed upgrading and investing in software solutions, we believe there is pent up demand which will be realised as markets recover."

Walker is soon to leave the company, after 16 years in the top job.

Sage shares are up almost one per cent at the time of writing. ®