Sage shares are on the up after announcing transformational profits jump

 
Oliver Gill
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FTSE 100 firm Sage is headquartered in Newcastle (Source: Getty)

Payroll software behemoth Sage today said its "transformation" was complete, as profits grew by 10 per cent.

Half-year revenue rose by 6.6 per cent to £1.8bn. Operating profit increased from £431m to £475m in the six months to the end of September.

Sage said it had upped stickier recurring revenues, cut costs and rapidly grown its cloud-based services.

Shares in the FTSE 100 firm rose over three per cent in morning trading.

"2017 marks the completion of the transformation of Sage outlined at the June 2015 capital markets day" said Sage boss Stephen Kelly.

"For each of the past three years we have delivered management's guidance for at least six per cent organic revenue growth and 27 per cent underlying operating margins, whilst fundamentally transforming Sage."

Read more: FTSE 100 tech firm Sage splashed $850m on a US cloud software firm

The Newcastle-based firm said 78 per cent of its revenue now comes from recurring sources.

Meanwhile, Sage said it had delivered more than £100m of annualised cost savings since 2014.

"We now have the leadership, organisational alignment, brand and comprehensive suite of cloud solutions, to accelerate momentum in our markets. The launch of Sage Business Cloud in October 2017 gives our customers the most comprehensive business management cloud platform in the market and provides the platform for this acceleration. We will continue to drive efficiencies and productivity throughout the organisation and this is now 'business as usual'."

Read more: Sage Group transformation leads to revenue boost

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