Accounting software provider Sage has a potential £500m war chest for acquisitions, the company said today.

Announcing double digit growth in pre-tax profits and turnover, Sage finance director Paul Harrison told Accountancy Age the FTSE100 group was lacking a presence in several key western economies where it might seek opportunities to grow further. He cited Italy and Scandinavia as areas it might focus on.

'We have done scores of acquisitions, and it has become part of our DNA,' said Harrison.

The balance sheet would allow the company to spend up to £500m on such a strategy, he added, after a year in which the company made five separate purchases, the most recent, its deal to buy Adonix in France.

The group also revealed that pre-tax profits had broken through the £200m barrier. Turnover was up by 14% to £776.6m and pre-tax profit up by 13%, to £205.4m.

The group announced that it would also be increasing its total dividend, up to 2.875p per share, compared with 2004's 2.33p.

The shares dipped, however, in early trading, the company saying that tough market conditions had been responsible for the change rather than investors' underlying view of the results.

Harrison said he was confident the numbers would be 'well received'.