Sage share price sags after French troubles disappoint investors

Sage investors were delivered a blow today after sluggish French performance hit quarterly returns.

The accounting software giant was the FTSE 100’s biggest laggard, with shares falling almost eight per cent.

Organic revenue growth was 6.3 per cent, recurring sales rose seven per cent.

“France continues to significantly underperform relative to the rest of the group, weighing on both organic revenue and recurring revenue growth with recovery expected in the second half of the year,” the company said.

While Sage finance chief Steve Hare said trading for the three months to the end of December was in line with expectations, analysts were disappointed.

Barclays analyst James Goodman had pencilled in revenue growth of eight per cent, “leaving work to do through the year to recover the early underperformance”.

Read more: Sage says its “transformation” is complete as profits jump

“We have invested heavily in sales training in the first quarter to set up the business for success, particularly in Sage Business Cloud, resulting in the delay of some revenue into the second quarter,” said CFO Hare.

“Quarterly phasing of organic revenue growth is therefore expected to be similar to prior financial years. We expect acceleration throughout the year including a stronger second quarter and we reiterate our full year guidance of around eight per cent organic revenue growth and around 27.5 per cent organic operating margin for 2018.”

In November, investors were buoyed by an announcement Sage’s transformation was complete and half-year profits had swelled by 10 per cent.

The Newcastle-based firm is trying to adjust its strategy so that a greater proportion of its sales come from recurring – rather than one-off – revenues.

Last July Sage spent £653m, its biggest-ever acquisition, buying US financial cloud software firm Intacct.

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