REG - Sage Group PLC - Interim Management Statement <Origin Href="QuoteRef">SGE.L</Origin>

SageAnnouncement

06/09/2014 20:23

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RNS Number : 0693N
Sage Group PLC
23 July 2014 
 
23 July 2014 
 
The Sage Group plc Interim Management Statement 
 
The Sage Group plc ("Sage") is today issuing its Interim Management Statement,
which covers the period from 1 April 2014 to date. 
 
Financial performance 
 
For the first nine months of the year, Group organic revenue has increased by
4.7%, with growth of 4.3% in the third quarter.  Performance in the fourth
quarter is expected to be stronger than the third quarter and the business
remains on course to achieve the 6% organic revenue growth target in 2015. 
 
A strong performance from subscription helped to drive good organic recurring
revenue growth of 7.2% for the quarter, which represents a continuation of the
level of growth highlighted in the first half results. Subscription revenue
increased by 24.5% in the third quarter. 
 
The growth in recurring revenue was achieved despite a weaker performance in
payments, particularly in North America, where market-wide pricing pressure
has contributed to revenue contraction during the quarter.  We remain cautious
on the outlook for payments growth in the fourth quarter. 
 
Software and software-related services ("SSRS") revenue declined by 3.4% in
the quarter, reflecting continued weakness in the mid-market in Europe, where
it has been more difficult to predict the timing of when prospective deals
will close. 
 
Guidance for operating profit margin remains unchanged. 
 
Guy Berruyer, Chief Executive Officer, commented: 
 
"The performance of the business continues to be solid and the overall growth
trajectory is on track.  Recurring revenue growth of 7%, driven by a strong
subscription performance, demonstrates our business has momentum, and we
remain confident of achieving our target of 6% organic revenue growth in
2015." 
 
Foreign exchange 
 
Exchange rate headwinds continued to be a feature in the third quarter,
reflecting the strength of sterling relative to a number of currencies in
territories in which Sage operates, most notably, the Euro, the US Dollar, the
South African Rand, the Australian Dollar and the Brazilian Real. 
 
Financial position 
 
The Group's operating cash generation remains strong. During the period, the
Group paid an ordinary dividend to shareholders of £45m. The share buyback
programme has also continued and, since 1 April 2014, a further 8.7m shares
have been repurchased for a consideration of £33m. Net debt at 30 June 2014,
was £345m (£361m as at 31 March 2014). 
 
Acquisitions 
 
On 21 July 2014, as previously reported, the Group announced the acquisition
of Exact Software Deutschland GmbH ("Exact Lohn"), the German payroll business
of Exact Holding N.V, for a cash consideration of E16.25m (£12.87m*). This
important in-fill acquisition strengthens Sage's payroll business in Germany,
positioning Sage as one of the two leading players in this segment in
Germany. 
 
*Translated at £1 = Euro 1.2627. 
 
Management will be hosting an analyst conference call to discuss the Interim
Management Statement at 08:30am London time; dial-in number +44(0)20 3427
1903, pin code: 3662793.  A replay of the call will also be available for one
week after the event: Tel: +44 (0)20 3427 0598, pin code: 3662793. 
 
Enquiries 
 
The Sage Group plc +44(0) 191 294 3068 
 
Guy Berruyer, Chief Executive Officer 
 
Steve Hare, Chief Financial Officer 
 
Murdo Montgomery, Investor Relations 
 
Tulchan Communications +44(0) 20 7353 4200 
 
David Shriver 
 
Jonathan Sibun 
 
About The Sage Group plc 
 
We provide small and medium sized organisations with a range of easy-to-use,
secure and efficient business management software and services - from
accounting and payroll, to enterprise resource planning, customer relationship
management and payments.  Our customers receive continuous advice and support
through our global network of local experts to help them solve their business
problems, giving them the confidence to achieve their business ambitions. 
Formed in 1981, Sage was floated on the London Stock Exchange in 1989 and
entered the FTSE 100 in 1999. Sage has over 6 million customers and more than
12,700 employees in 24 countries covering the UK & Ireland, mainland Europe,
North America, South Africa, Australia, Asia and Brazil. For further
information please visit www.sage.com 
 
This information is provided by RNS
The company news service from the London Stock Exchange