A STRONG set of year-end results has seen Sage’s share price skip up 5%, leading FTSE 100 trading yesterday.
Revenues grew by 5% in 2104, to £1.3bn, while its profit margin increased to 27.5, from 27.1% a year earlier. The business software giant, which is looking to shift its model towards online services, saw subscription revenue climb 29% to £220m. Its share price is now 439.1p, vlauing the company at £4.7bn by market cap – up from 403p a day earlier.
Robust also growth came from Sage’s auto-enrolment subscription service, which is supported through the latest version of Sage 50 Payroll. The annualised value of this customer base was £8m.
Its Sage One cloud-based system saw customer subscriptions at 86,000, from 35,000 in 2013. UK customers represented 47,000 of the base, at a run-rate of 2,100 a month.
The move to subscription is “attractive” for Sage, it said in a statement to the London Stock Exchange. “By balancing subscription adoption across new and existing customers, we are managing the potential near-term impact on revenue of the transition to subscription,” it added.
New CEO Stephen Kelly (pictured) thanked his predecessor Guy Berruyer for helping to drive Sage forward, and reconfirmed its financial targets for 2015.
“Looking ahead, I believe that Sage, as a trusted partner to our customers, can be even more instrumental in supporting the success of SMEs around the world,” said Kelly. “I look forward to building on Sage’s technology leadership, both in the cloud and on-premise, together with our outstanding customer support, to the benefit of our current and future SME customers.”