Paul WalkerHighlights


  • Strong increase in profitability , reflecting prudent cost control
  • Organic revenue stabilising , with contraction of 2%* against 6%* contraction for the half-year ended 30 September 2009
  • Continued growth in subscription revenue and improving trends in software and software-related services revenue
  • Support contract renewal rates maintained at 81%
  • 127,000 customers added in the period (H1 2009: 120,000)
  • EBITA† margin 25% (H1 2009: 24%* excluding restructuring costs), reflecting efficiency drive and tight cost control, particularly in North America
  • Strong operating cash flow of £236.6m (H1 2009: £187.0m) representing 130% of EBITA† and net debt reduced to £305.3m (30 September 2009: £439.4m)
  • Interim dividend increased by 3% to 2.58p per share (H1 2009: 2.50p per share) maintaining our progressive dividend policy

Chief Executive Paul Walker commented: “We are pleased to report a good performance for the half with our organic revenue stabilising and a strong increase in profitability following cost reductions made in 2009. Our customers remain cautious, but the relevance of our products and the compelling nature of our customer support has driven our business in the period.

Following a period where SMEs have delayed upgrading and investing in software solutions, we believe there is pent up demand which will be realised as markets recover . In the longer term, we have a significant opportunity to provide connected business solutions to our customers. In the short term, while the recovery remains tentative, we will continue to manage our cost base prudently whilst investing and preparing for future profitable growth. The operational and financial strength of our business supports our progressive dividend policy and the 3% increase in the interim dividend.”


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Enquiries

The Sage Group plc +44 (0) 191 294 3068

Paul Walker, Chief Executive

Paul Harrison, Group Finance Director

Andrew Griffith, Investor Relations

Tulchan Communications +44 (0) 20 7353 4200

David Shriver

Stephen Malthouse

Lucy Legh

A webcast of the analyst presentation will be hosted on www.investors.sage.com until 19th May 2010: Tel: +44 (0) 1452 550 000, pin code: 70874284#.

*Foreign currency results for the prior half-year ended 31 March 2009 have been retranslated based on the average exchange rates for the half-year ended 31 March 2010 of $1.59/£1 and €1.12/£1 to facilitate the comparison of results.

†EBITA is defined as earnings before interest, tax and amortisation of intangible fixed assets.