Sage takes centre stage
The technology market may still be in the doldrums and, if you believe the Accountancy Age/ADVFN index, accountancy isn't looking too healthy either.
But this doesn’t seem to have deterred software supplier Sage which looks likely to be producing some reasonable figures when it publishes its full-year results next week.
The company, which is now the only software business left in the FTSE-100 following the bursting of the technology industry’s bubble, has promised that the results due on 3 December will be in line with market expectations, and there should be no nasty surprises. This will be a relief to investors, with market analysts predicting revenues of around £550m and pre-tax profits in the region of £130m.
This figure would represent an increase of around £9m on last year’s pre-tax profits of £121.3m, and has been achieved in spite of tough market conditions and while the company was digesting the acquisition of customer relationship management software vendor Interact, made in May 2001.
The Newcastle-based company is the largest supplier of accountancy software in the UK and continues to pull in strong custom from small-to-medium sized companies across the globe.
However, a recent ICAEW IT Usage in Accountancy Practices survey showed that more than one in three Sage Personal Tax users have experienced a business critical failure with the software in the past year and 27% of Sage Time and Fees users had reported similar failures.
Sage declines to comment publicly on these issues but the company seems fairly confident that it can ride such criticism to retain its strong position, with the company expected by analysts to increase pre-tax profits again next year to £140m.
Investor confidence remains relatively high. The company’s share price has been climbing since the beginning of October and is floating above the 150p mark, the highest it has been since July. It is still some way off its 12-month high however, which saw prices of around 270p towards the end of last year.
Its recent strength does look to have helped it avoid an exit from the FTSE-100. The exchange has its next reshuffle on 11 December.
- More on Sage at www.sage.co.uk.