Sage results reveal restructuring plans

Accountancy software providers Sage has released its first half results for
the year announcing that it is to make restructuring changes equating to
approximately 4% of total cost for 2008.

The cost saving drive in the UK is expected to save the company £5.8m, with
£3.7m coming from restructuring changes in the second half of the year.

Finance director Paul Harrison has said that there could be 700 job cuts
across the group later this year,
Reuters
reported.

Chief executive Paul Walker said: ‘After a robust performance last year, we
are now experiencing the effects of the weakening global economy in most of our
markets, with customers delaying software purchasing decisions.’

The global company has made £49.3m of cost savings with a company statement
adding: ‘As anticipated, customer demand for software and software-related
services was weak.’

Sage said: ‘We anticipate that market conditions will be challenging for both
Sage and its customers over the second half of the year.’

‘With global customer confidence at historically low levels, demand for
software and software-related services will remain muted over the second half of
the year,’ it added.

Total UK revenues remained constant with the first half of 2008 showing
revenues of £121.7m and first half of 2009 with £121.9m.

Organic revenues in the UK decreased by 2% while organic and software related
services revenue shrunk by 19%.

The results revealed that mid-market and payroll products had seen weak
license revenue.

In the UK customer subscriptions grew 7% however, in North America
subscription revenues fell by 3%.

Further reading:

Brokers says Sage could restructure