(Alliance News) - Shares in Sage Group PLC on Thursday fell after it predicted slightly slower than expected full-year revenue growth despite making progress in the first half of the financial year.
Shares in the Newcastle upon Tyne-based accountancy software provider fell 8.9% to 1,090.67 pence in London on Thursday. It was the worst performing stock in the FTSE 100 which was down 0.3%.
In the six months ending March, Sage said pretax profit rose 47% to GBP203 million from GBP139 million a year prior. Revenue climbed 5.5% to GBP1.15 billion from GBP1.09 billion.
Underlying annualised recurring revenue rose 11% to GBP2.25 billion from GBP2.03 billion, reflecting growth across all regions balanced between new and existing customers.
Sage said its renewal rate by value of 102% was ahead of last year's 101%, reflecting increased sales to existing customers and continued good retention rates.
Sage Business Cloud revenue increased by 18% to GBP915 million from GBP777 million a year ago.
Looking ahead, Sage expects organic total revenue growth for the full year to be broadly in line with the first half.
In the first half, Sage said organic revenue grew by 9%, which analysts explained was a touch below expectations.
"The consensus is closer to 10% organic growth, which implies a slight nudge down to [financial 2024] organic growth," Peel Hunt said.
Sage increased the half-year dividend by 6.1% to 6.95 pence per share from 6.55p.
Chief Executive Steve Hare commented: "Sage performed well in the first half of the year, delivering broad-based revenue growth and significant margin expansion. Demand for our solutions remains robust, with small and mid-sized businesses continuing to trust Sage to automate their accounting, HR and payroll workflows."
By Jeremy Cutler, Alliance News reporter
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