Sage's Half Year 2015 results confirm that after a period of stagnation it has discovered new recipes to deliver growth.

Sage has suffered from a lack of revenue growth between 2009 and 2011. This has been due to a number of external and internal factors; recession in its key markets; changes to those markets; and unsuccessful diversification (CRM, US Healthcare).

Nevertheless, Sage is a highly rated stock and thus never looks like a bargain. If buying undervalued stock is your game then Sage is unlikely ever to meet your criteria. What Sage does offer is investment in a high quality business with an economic moat – it has strong defensive characteristics so the downside risk is limited.

Accounting software is not a discretionary purchase whatever the economic climate. Once its software is embedded into a business there needs to be a very compelling reason to go through the cost and pain of replacing it. There are always more pressing development priorities for a business than replacing your accounting software – it doesn't confer a competitive advantage. Sage thus has a solid revenue base, strong margins, generates good cash-flow and dividends. These characteristics are appreciated by Mr Market that prices Sage more like a bond than an equity. Sage's economic moat allowed it to continue to increase its dividends and buy-back shares through its period of stagnation whilst sorting out its problems.

Signs of transformation first became apparent early December 2013 as Guy Berruyer, the now x -Chief Executive, said:

"I am pleased to report a strong set of results, with good growth across all regions and our strategic initiatives progressing well. These results highlight the strong appeal of our offering to SMEs, great execution in delivering on our plans and the benefit of a clear strategy, which focuses on our most significant growth opportunities. The strategy is working and growth is accelerating. We remain confident of achieving our target of 6% organic revenue growth in 2015, and anticipate further progress during the year ahead."

With a target of delivering 6% organic growth, the acceleration to 4% up from the 2% near-stagnation previously, suggested a transformation was underway. However, the latest set of results for the half-year to 31st March 2015 confirms that Sage has indeed rediscovered its mojo and organic growth has returned.

Stephen Kelly, Sage's new Chief Executive Officer, said:

"We have delivered a good first…

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