Software company Sage Group today said it was cancelling a £250m share buyback and withdrawing its financial guidance after coronavirus hit its revenue,
The company said it thinks organic recurring revenue growth will be below its guided range of eight-to-nine per cent and decline in other revenues will “accelerate significantly” in the second half, with an associated impact on margin.
Sage also said it was cancelling its £250m share buyback programme which was suspended on 18 March after £6m of shares had been bought.
The company said it expected the crisis to lead to customers putting off investments and could lead to an increase in business failures “leading to an increase in churn”.
Sage said it has a strong balance sheet, with approximately £1.3bn of cash and available liquidity at 31 March.
The software business said it was “implementing a range of mitigating actions to manage costs and cash in the near-term, while continuing to invest in the long-term success of the business”.
In today’s trading update for the six months to 31 March, the company said growth in organic recurring revenue growth was ahead of full year guidance.
It said other revenues, representing about 10 per cent of sales, declined with the increase accelerating towards the end of March as covid-19 hit licence sales and professional services implementations.
Shares rose 1.6 per cent today to 567p.