Sage Group share price soars after software company reveals strong revenue growth for three months to December 2015

Hayley Kirton
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Software subscriptions helped to drive revenue up during the company's first quarter of 2016 (Source: Getty)

Sage Group today revealed strong revenue growth for the three months to 31 December 2015, with group organic revenue rising by 6.6 per cent.

The company, which is well-known for its accounting and payroll software, revealed particularly positive growth for its software subscriptions income stream, for which revenue grew by 35.7 per cent for the first quarter of its 2016 financial year.

Sage's share price shot up after the announcement was made, reaching a high of 603.5p mid-morning, up 6.3 per cent from its previous close.

"The performance in the first quarter demonstrates continued momentum and was in line with expectations," said Steve Hare, the company's finance chief. "Our business transformation is on track and we are focussed on its execution to realise our long-term plan for sustainable and improved quality growth. While we expect the transition to be non-linear, the first quarter represents good progress."

Read more: Sage profits soar as Stephen Kelly takes the reins

The company also reported that growth across Europe and Africa had been strong, although some of the other geographical regions it trades in had started to slow down.

Sage also saw a decline in revenue of 5.3 per cent for software and software related services, which the company had anticipated, as it has shifted its focus away from one-off purchases in favour of subscription-based sales.

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