Sage Group PLC Trading Update (5079A)
January 22 2020 - 02:00AM
UK Regulatory
TIDMSGE
RNS Number : 5079A
Sage Group PLC
22 January 2020
Trading update for the three months ended 31 December 2019
The Sage Group plc (the "Group") is today issuing its trading
update for the three months ended 31 December 2019.
Financial performance
Organic [1] Revenue Mix Q1 FY20 Q1 FY19 Growth
GBPm GBPm GBPm %
--------- --------- --------- -------
Revenue by Category
Recurring Revenue GBP410m GBP370m +GBP40m +10.7%
Other Revenue (SSRS [2] &
Processing) GBP55m GBP65m -GBP10m -15.8%
--------- --------- --------- -------
Organic Total Revenue GBP465m GBP435m +GBP30m +6.7%
Portfolio View of Recurring
Revenue
Future Sage Business Cloud
opportunity GBP362m GBP321m +GBP41m +12.7%
Other (no current path to
migration) GBP48m GBP49m -GBP1m -2.5%
--------- --------- --------- -------
Recurring Revenue GBP410m GBP370m +GBP40m +10.7%
[1] All numbers throughout this document are organic unless
otherwise stated. Organic results exclude contributions from assets
held for sale (Sage Pay and the Brazilian business). Full
definitions are available in the FY19 results announcement.
[2] Software and software-related services.
Group recurring revenue increased by 10.7% to GBP410m,
underpinned by software subscription growth of 24.8% to GBP286m (Q1
19: GBP229m), as Sage continued to focus on migrating existing
customers and attracting new customers to subscription and the
cloud.
Recurring revenue growth was driven principally by North America
and Northern Europe (UK & Ireland), with strong momentum from
FY19 carried forward into the first quarter. In North America,
recurring revenue grew by 11.8% to GBP154m (Q1 19: GBP137m), driven
by cloud connected solutions and a good performance from Sage
Intacct. Northern Europe continued to grow strongly with recurring
revenue growth of 15.1% to GBP93m (Q1 19: GBP80m), benefitting from
strong growth in the second half of FY19 as well as new Sage 50
cloud connected contracts added in the quarter.
In terms of the portfolio view of revenue, the Future Sage
Business Cloud Opportunity (products within, or to be migrated to,
Sage Business Cloud) delivered recurring revenue growth of 12.7% to
GBP362m, offset by a slight decrease in recurring revenue of 2.5%
to GBP48m in products with no current path to Sage Business
Cloud.
Other revenue (SSRS and processing) declined by 15.8% to GBP55m,
in line with our expectations for the quarter, reflecting the
managed decline in licence sales and de-prioritisation of
professional services revenue as the business continues to focus on
subscription.
Total Group revenue increased by 6.7% to GBP465m.
Jonathan Howell, Chief Financial Officer, commented:
"Sage had a strong first quarter as expected. We have sustained
last year's growth momentum into the first quarter of FY20, as we
continue to focus on driving recurring revenue through the
transition to cloud-based subscription services, in line with our
vision to become a great SaaS company. Looking ahead, we reiterate
our guidance for the full year, as outlined in the FY19 results
announcement."
Foreign exchange
Sterling strengthened in the quarter against international
currencies, particularly the Euro, leading to exchange rate
headwinds.
Analyst and investor conference call
Jonathan Howell, CFO will be hosting a conference call at 8:30am
GMT today which will be webcast from a link on our investor
relations website, www.sage.com/investors. The call may also be
accessed using the dial-in number 0800 376 7922 (United Kingdom) or
+44 (0) 2071 928 000 (International) and pin code 8796118. A replay
of the call will also be available for one week after the event:
dial-in number 0844 571 8951 (United Kingdom) or +44 (0) 3333 009
785 (International), pin code 8796118.
Enquiries
The Sage Group plc +44(0) 191 294 3457
Jonathan Howell, Chief Financial Officer
Lauren Wholley, Investor Relations
James Sandford, Investor Relations
Amy Lawson, Media
FTI Consulting +44(0) 20 3727 1000
Charles Palmer
Dwight Burden
About Sage
Sage (FTSE: SGE) is a global market leader for technology that
helps small and medium businesses perform at their best. Sage is
trusted by millions of customers worldwide to deliver the best
cloud technology and support, with our partners, to manage
finances, operations, and people. We believe in doing everything we
can to help people be the best they can be, so the combined efforts
of 13,000 Sage colleagues working with businesses and communities
make a real difference to the world. Sage. Perform at your
Best.
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END
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