Sage sees revenue rise on bump in software subscriptions
Software group Sage today said that a bump in subscriptions had helped it increase revenue nearly a tenth across the last financial year.
The Newcastle-based company saw revenue rise 8.5 per cent to £1.6bn for the year, with subscription growth up 20.5 per cent to £1.1bn.
Sage added that it had seen particularly strong growth in its North America and northern Europe businesses, and said that subscription penetration had now reached 65 per cent.
Excluding assets held for sale, the FTSE 100 firm said profit had slipped slightly from £406m to £391m over the period.
It said that the decline was due investment in cloud services and a £17m bad debt provision for Covid.
Shares in Sage dropped 10 per cent on the back of the results.
Chief executive Steve Hare praised the firm’s performance, saying it had hit its forecasts despite the disruption of the coronavirus pandemic.
For the next financial year, Sage said that it was expecting revenue growth of three to five per cent, weighted towards the second half of the year.
In the future, it will focus on its cloud solutions, with more resources to be added to its business cloud division.
This will be part-funded by cost savings from the restructuring of its professional services business, and other efficiencies across the company, it said.
Hare added: “While the near term remains uncertain, these foundations position us well to support customers as they adopt digital business models, and I am confident that our additional investment in Sage Business Cloud, and in particular cloud native solutions, will deliver stronger growth and drive the future success of the group.”