Sage Group shares gained 1.6% to 675.2p in early morning trading on Friday, after the company reported an operating profit rise to £204 million compared to £203 million year-on-year in its HY1 2022 results.
The operating profit included non-recurring net gains of £55 million, driven by a selection of disposals.
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Sage Group confirmed a revenue decline to £934 million against £937 million, alongside an EBITDA of £226 million compared to £229 million in HY1 2021.
However, the software company’s organic recurring revenue grew 8% to £866 million from £800 million on the back of its Sage Business Cloud expansion of 21% to £572 million, alongside an organic total revenue increase of 5% to £924 million against £877 million.
Sage Group announced an EPS boost of 12% to 14.8p from 13.2p, and a dividend per share rise of 4% to 6.3p against 6p in the last year.
The firm highlighted an organic operating margin of 19.9% compared to 18.4% year-on-year.
“We achieved a strong first half performance, in line with expectations, demonstrating sustainable growth and building further momentum,” said Sage Group CEO Steve Hare.
“Our strategic investment in sales, marketing and innovation has continued to accelerate revenues across Sage Business Cloud, underpinned by increasing levels of new customer acquisition.”
“Cloud native solutions, which now account for around a quarter of Group ARR, have performed particularly well.”
The firm noted a strong balance sheet with £1.2 billion in cash and available liquidity, and a net debt to EBITDA of 1.5x.
The Sage Group commented that its outlook remained unchanged, with an anticipated organic recurring revenue growth coming in between 8%-9% in FY 2022 as a result of strong growth in the Sage Business Cloud, and especially in cloud native revenues.
The company added that it expected other revenues to continue to decline, reportedly in line with the firm’s strategy.
The group said its organic operating margin was projected to trend upwards in 2022 and beyond as Sage Group focused on scaling the business.
“While we are mindful of increased macroeconomic and geopolitical uncertainties, our customers remain confident and resilient,” said Hare.
“Our aim is to knock down barriers to their success, delivering solutions that make their lives easier, and we continue to make good progress against our strategic objectives.”
“I am confident that our ambition to become the trusted network for small and mid-sized businesses will drive the success of Sage, as we focus on growing both revenue and earnings in absolute terms.”