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Sage reveals 5% contraction in software revenues

Software revenues and organic growth contract but, Sage One starts to take off

06 Dec 2012 Accountancy Age

By Rachael Singh

Sage's Guy Berruyer

SOFTWARE REVENUES fell at one of the UK's largest accountancy software companies, Sage.

According to its latest annual results for the year ended 30 September 2012, software and software-related service revenue had contracted 5%.

However, pre-tax profit increased 4% to £356.3m, largely attributed to a growth in subscription revenue which grew 6% to £922.7m.

Despite organic growth halving to 2% from 4% the year before, CEO Guy Berruyer (pictured) said this was an area he hoped the company would focus on in the future.

"We set out our ambition to double our long-term historic average organic revenue growth rate within the next three years," he said, with the target set for 2015.

Sage managed to increase take-up of its online basic accountancy tool Sage One, which saw the customer base grow from 1,000 to 6,100 in the last year.

Revenue increased 3% to £1.34bn, compared to £1.299bn for 2011. Pre-tax profits also increased 1.1% to £334.3m.

"Europe's performance reflected good growth by the UK and Germany, offset by the impact of weaker markets in France and Spain," said Berruyer.

UK and Ireland grew 4%, driven largely by maintenance and support particularly in the Sage 50 products and accountants division. Other European destinations to increase revenues include Germany, which grew 5%. However, many countries contracted, including Switzerland, which fell 3%, while Poland fell 20% and Spain 7.7%, with France remaining flat.

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