The Channel logo

News

By | John Oates 5th May 2010 11:21

Sage banks on 'pent-up demand' for salvation

They want to buy our stuff - they just don't have any money

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. ®

comment icon Read 1 comment on this article alert Send corrections

Opinion

Memristor_wafer

Chris Mellor

Execution warrant close to being signed for Fink's folly
Woman cuddles 'sly-looking' Fennec fox. Photo by Shutterstock
Cartoon of employee asking wky boss makes hium wear suspenders (while pincer through open trapdoor remains poised above his head) illustration by Cartoon resource for Shutterstock

Frank Jennings

It's not like my boss painstakingly nurtured the contacts, right?

Features

Girl and computer, photo via Shutterstock
Middle-class terror of engineering also part of problem
Nerd fail photo via Shutterstock
Shouting match
Single market vs. rest of the world