BusinessCompany NewsSage profits up

Sage profits up

FTSE 100 software business shows that overall profits are up, but UK is unchanged

Sage, the financial software giant, revealed static UK revenues but an
increase in profits across the company.

Revenue in the UK in the first half of 2010 remained unchanged compared to
the same period a year before, at £122m. Operating profit grew 3% to £44.9m for
H1 2010, compared to the same period a year earlier.

Sage said in its statement to the stock exchange that its HR and payroll
products experienced a “subdued” customer demand over the previous six months.

The FTSE 100 company claims its Practice Solutions product, aimed at UK
accountants, grew 7% in the first half of 2010 compared to the same period in
2009.

Across the company, earnings before interest tax and amortisation increased
to £181.9m in the first half of 2010 compared to £169m a year earlier – an
overall rise of 8%.

Overall pre-tax profit grew to £177.5m for H1 2010 from £159.9m – an increase
of 11%.

Chief executive Paul Walker said: “Following a period where SMEs have delayed
upgrading and investing in software solutions, we believe there is pent up
demand which will be realised as markets recover.

“In the longer term, we have a significant opportunity to provide connected
business solutions to our customers. In the short term, while the recovery
remains tentative, we will continue to manage our cost base prudently whilst
investing and preparing for future profitable growth. The operational and
financial strength of our business supports our progressive dividend policy and
the 3% increase in the interim dividend.”

Sage believes some SMEs will find purely online software to be “attractive”.
It has launched several online products abroad such as My Business Online in
South Africa and Billing Boss in North America. It also announced it will make a
number of launches around the world in the second half of the year.

Further reading:

Fish
Partnership teams up with Sage

New
Sage product to help accountants file clients’ accounts

Sage
chief Walker to step down after 16 years

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