Sage Group has unveiled a £350million share buyback programme after sales surged over the last year.
The accounting software provider, which is one of Britain’s biggest technology companies, revealed underlying revenue rose 10 per cent to £2.18billion in the year ending September, thanks to bumper results across all regions.
Turnover increased the most in North America, growing by 15 per cent to £973million following solid demand for Sage’s financial management software product Sage Intacct.
Strong result: Sage Group, one of Britain’s biggest technology firms, revealed underlying revenue went up 10 per cent to £2.18billion in the year ending September
Sales were additionally bolstered by more customers using Sage 50 and Sage 200 products, which are aimed at small and medium-sized enterprises.
This helped revenues in the company’s cloud computing arm – Sage Business Cloud – climb by a quarter to £1.63billion.
Sage’s underlying operating profits rose by 18 per cent to £456million, supported by higher margins and the non-recurrence of certain costs, including £32million from a property restructuring scheme and a £9million charge for French payroll taxes.
The company expects organic revenue growth to be ‘broadly in line’ with 2023 levels over the next financial year and operating margins to ‘trend upwards’.
The Newcastle-based firm proposes to pay a 12.75p per share final dividend, taking its full-year dividends to 19.3p, a 5 per cent hike on the prior year.
It has also announced a £350million share repurchase plan, which it expects to complete by 23 April.
Sage Group shares shot up 11 per cent to 1,106.5p on Wednesday morning, meaning they have increased by almost half since the beginning of this year.
Steve Hare, chief executive of Sage, said: ‘Small and mid-sized businesses are continuing to digitalise, despite the macroeconomic uncertainty.
‘We are building a resilient platform to deliver sustained, efficient growth, and I am confident that Sage is well-positioned to take advantage of the market opportunity in 2024 and beyond.’
Founded in 1981, Sage is one of the few technology businesses listed on the FTSE 100, which it joined 24 years ago after its shares shot up by an astonishing 28,000 per cent during the 1990s.
In recent years, the firm’s expansion has partly come through takeovers, including of Lockstep, Brightpearl and Task Sheriff.
Mark Crouch, an analyst at eToro, said: ‘While there are alternatives to Sage, the group has carved out a good reputation in the sector.
‘It is also a sector where revenues tend to be stickier, as businesses don’t tend to switch technology platforms often. That gives us confidence that Sage can continue to grow sustainably, and we expect further share price gains.’
