Sage Group shares jump on raised dividend

Sage Group reported four per cent growth in underlying revenue, to £1.42bn, buoyed by its cloud-based computer services and in line with forecasts. Sage invested 32 per cent more in its cloud and connected services strategy than last year.

The company's investment is timely. The infrastructure-as-a-service battle is heating up. On Monday, Google announced “general availability” for its cloud compute project, staking its place next to major cloud computing players Amazon and Microsoft.

The entry-level SageOne, a cloud-based product, now has more than 21,000 paying subscriptions in the UK, which means a threefold increase in the past 12 months.

Chief executive Guy Berruyer (pictured) said:

These results highlight the strong appeal of our offering to SMEs, great execution in delivering on our plans and the benefit of a clear strategy.

We remain confident of achieving our target of six per cent organic revenue growth in 2015, and anticipate further progress during the year ahead.

Sage proposed a final ordinary dividend of 7.44p per share (from 7.02p per share in 2012) - lifting the full-year dividend six per cent to 11.32p per share. Shares have climbed over eight per cent on the news in early trading this morning.

The last remaining software company on the FTSE 100 saw profit before tax for the 12 months to the end of September fall by 51 per cent to £164.1m, impacted by an exception charge of £188.2m, primarily relating to disposals of non-core businesses.

Operating profit rose two per cent to £375.8m in the period. Total cash returned to shareholders in the year amounts to £571.8m, from £434m last year.