Sage's margins soar despite crunch

Sage has recorded strong growth despite the recent surge of competition in the SME market in their primary patch and tough market conditions, the company announced today in the groups interim management statement.

Sage reported at its half year that its sales had soared by 9% and that pre-tax profits were up 13% to £122.6m.

Cynthia Alers, director of investor relations at Sage Group said:'Customer support sets us apart from competition.'

'It's customer support that continues to grow with 60% of our revenues tied to renewed contracts' she added.

The accountancy software company saw their share price increase 2p to 198p on the back of the management statement that the company was inline to meet targets.

Sage has seen its 5.7m SME customers take the company through the tough market and even reduced its debt from £556m earlier this year to £532m.

Paul Walker, chief executive said: 'Our businesses continue to show resilience in uncertain and challenging markets. We remain cautious on the economic outlook although our large customer base, geographic diversity and strong product offering provide good support for our businesses going forward.'

Sage will report preliminary results for the 12 months to 30 September 2008 on 3 December 2008.

Microsoft recently launched a partnership with Tenon which is a big encroachment on the Sage patch.

Further reading:

Sage: Tech spending charges on

Sage hit by Tenon's deal with Microsoft