Acquisitions boost Sage
Sage acquisitions come good, and chief executive says there are more to follow
Sage has posted strong interims, with recent acquisitions positively impacting on the software group’s figures.
Link: The man behind accountancy’s biggest software player
Pre-tax profits increased to £100.6m for half-year ended 31 March 2005, from £86.7m.
Recent acquisitions, SP, Softline and ACCPAC, showed revenue growth and ‘significantly improved margins’.
UK revenues grew modestly, to £96.7m from £90.8m. Organic growth of 5% was mainly due to sales of upgrades of accounting and payroll products.
Operating margins were reduced to 38% from 40%, caused by increased costs arising from office relocations, which in turn were undertaken to ‘improve service’ for its customers.
Chief executive Paul Jackson confirmed that Sage would continue to seek more acquisitions, and viewed 2005 ‘with confidence’.
The group will conduct briefings on the effects of IFRS upon its figures in September, but it has revealed where the main changes will occur: the requirement to expense share-based payments, the treatment of intangible assets with respect to acquisitions completed since October 2004, and the requirement to capitalise (or amortise) certain expenditure associated with the development of new software products.