The accounting programme maker, the only software company in the FTSE 100, said revenues had edged up two per cent over the past year, but this was less than the four per cent increase last year.
The disappointing growth makes the company’s hopes of hitting an organic revenue target of six per cent by 2015 look increasingly fragile.
Sage said poor trading conditions in France and Spain had dragged down a stronger performance in the UK and Germany to give a mixed picture of business on the continent.
Sage has recently attempted to offset the difficulties it faces in European markets by buying assets in emerging markets.
It bought a £125m stake in Brazilian software business Folhamatic Group in June to complement its European business.
But analysts were less than convinced on the back of the slowing revenues, and said France could prove its Achilles Heel.
“Sage’s mid-market licence revenues in the country are already seeing weakness due to deteriorating business confidence. We believe the market is likely to decline in 2013,” Canaccord Genuity analyst Bob Liao said.
Markets reacted badly to the figures yesterday, with Sage shares closing 3.5 per cent lower at 299.6p.