Sage doing rather well

bunch-of-sage-leavesThe number crunching software outfit named after something which ends up in a turkey at Christmas is doing rather well and announced that it has posted strong annual numbers.

Sage announced it had achieved its fastest rate of recurring revenue growth for a decade in its financial year ending 30 September 2016. Total revenues rose 9.3 percent to £1.57 billion, with growth of 6.1 percent. The UK and Ireland more than pulled their weight, with seven percent organic growth.

Recurring revenue growth hit 10.4 percent. Organic operating profit, meanwhile, rose 9.2 percent to £427 million.

Sage talked up its Sage Marketplace, a distribution platform that allows ISVs to showcase add-ons for its products, including Sage One and Sage Live, which it launched in February. More than 215 ISV apps have signed to Sage Marketplace during the year.

Sage Live, a cloud accounting solution based on Salesforce hardware was launched in the USA and UK in February, now has 600 customers, with over 400 added in the past 90 days, Sage boasted.

Pegg, which Sage bills as “the world’s first accounting chatbot”, has amassed 9,000 users for Sage in 125 countries since its launch in July, the LSE-listed vendor added.

Phase one of a transformation programme saw Sage cut general and administrative expenses as a proportion of revenue from 18.7 to 16.5 percent year on year and renew its senior management team, and is now complete, the vendor said.

Sage CEO Stephen Kelly 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 six per cent 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 percent increase in the number of subscription contracts and a contract retention rate of 86 percent.

Phase two of the transformation effort will focus on “driving more technology innovation and increasing focus on new customer acquisition”.