Sage shares get a lift as growth stays on track

SHARES in software developer Sage Group led the FTSE risers yesterday morning, climbing over three per cent higher after the software firm said it is on track to meet growth targets.

The group, which makes business and accounting software, said legislative changes had helped to drive good performances across Europe, the UK and Ireland, despite challenging market conditions in France and Spain.

Across the Americas, which contribute 33 per cent of group revenues, Sage said it had maintained the strong performance reported in 2013, with a boost from customers switching to premium accounts.

The group, whose new finance chief Steve Hare started after the New Year, did not release new sales figures but said cash generation remained strong, with net debt of £381.8m.

Analysts at Panmure Gordon said they were delighted with Sage’s performance, but warned that the stock’s valuation is already pricing in growth.

“Our performance in the first quarter is in-line with our expectations, with good growth maintained across all regions,” said chief executive Guy Berruyer. “Through continued focus on our strategic cornerstones, we remain on course to deliver on our six per cent organic revenue growth target in 2015, and anticipate making further progress during the year ahead.”