Sage reports rise in profits despite 'flat' year
Accountancy and business software maker Sage reported a 20 percent rise in pre-tax profit for the financial year ended 30 September on Wednesday.
The company reported pre-tax profits of £319.9m compared to £267.4m in 2009. The pre-tax profit increases were also reflected in the earnings per share (EPS) which also rose 20 percent, from 14.46p to 17.29p.
A return to organic growth in the second half of the year in software and software-related services accounted for some of the rise in profits, along with a two percent increase in organic growth for subscriptions over the course of the year.
"These are good results which demonstrate our financial and operational strengths. I am particularly pleased that we have seen a return to organic revenue growth in the second half of the financial year," Guy Berruyer, chief executive of Sage, said in a statement.
The organic growth seen in the latter half offset the organic contraction felt in the first half, resulting in an overall "flat" year despite the growth in pre-tax profits, Sage said.
The company said that its future-facing strategy could include acquisitions, such as its purchase of Netcash, a South African payment processing service, which it completed in May.
"We continue to evaluate acquisitions as part of our strategy. Acquisition opportunities lie in both existing and new geographical markets. They also lie in markets such as the provision of accounting and payroll software to SMEs and in new markets such as the provision of web-related products and services," Sage said in the financial statement. "We continue to apply rigorous discipline to the evaluation of these opportunities, with appraisal models clearly linked to shareholder value," it added.
Sage also announced changes in the executive committee on Wednesday. Sue Swenson, president and chief executive of Sage North America since March 2008, will retire effective of 1 January, 2011 and will be replaced by Pascal Houillon, the current head of Sage France.
Other reshuffles include Paul Stobart , the current chief executive of Sage UK and Ireland will head up Sage Northern Europe (comprised of UK, Ireland, Germany, Poland and Switzerland) while Alvaro Ramirez — currently chief of Sage Spain — will take the role as chief executive of Sage Southern Europe, which encompasses France, Spain, Portugal and Belgium.