Accounting software provider Sage has announced an increase in profits before tax of over 40 per cent, despite a slight dip in organic revenue growth year on year, and is looking to previous acquisitions to drive up growth in the 2017-18 financial year.
Sage has released its annual results for the 12 months to 30 September 2017, showing organic revenue growth of 6.6 per cent, down 0.1 per cent from the year before.
Profits before tax for the year grew 41.3 per cent to £342 million, approximately A$598 million, up from £242 million in FY16.
Software subscription revenue growth saw a drop from 32.1 per cent to 30.3 per cent, despite now representing 37 per cent of total revenue, up from 30 per cent in FY16.
Acquisitions during the FY16/17 year, including Fairsail, now Sage People and Intacct, now Sage Intacct, have recorded strong performances, with combined organic revenue expected to account for 1 per cent of revenue in FY18, pushing organic revenue growth to 8 per cent.
Sage chief executive Stephen Kelly said the company is confident in delivering an organic operating margin of 27.5 per cent in FY18.
“FY17 marks the completion of the transformation of Sage outlined at the June 2015 Capital Markets Day,” said Mr Kelly.
“For each of the past three years we have delivered management’s guidance for at least 6 per cent organic revenue growth and 27 per cent underlying operating margins, whilst fundamentally transforming Sage.
“We now have the leadership, organisational alignment, brand and comprehensive suite of cloud solutions, to accelerate momentum in our markets.”
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