LONDON (ShareCast) - (Sharecast News) - Sage described "significant strategic progress" in its full-year results on Wednesday, as revenue rose 5% to £1.95bn, and organic total revenue advanced 6% to £1.92bn.
The FTSE 100 software company said its organic operating profit was ahead 8% year-on-year in the 12 months ended 30 September at £383m, while operating profit itself fell 2% to £367m.

EBITDA increased 3% to £468m, with the margin decreasing slightly to 24% from 24.2%, mainly due to the impact of disposals.

Statutory operating profit decreased 2% to £367m due to a change in recurring and non-recurring items, including higher net gains in the prior year from disposals.

Basic earnings per share slipped 3% to 25.47p, while underlying basic earnings came in 8% firmer at 25.74p per share.

Its operating profit margin contracted by 1.3 percentage points year-on-year, to 18.9%, while its organic operating profit margin was ahead 0.4 percentage points at 19.9%.

The Sage board declared a final dividend of 12.1p per share, up 4%, taking the full-year distribution to 18.4p.

Sage described "continued strong cash performance", with cash conversion of 107% reflecting ongoing growth in subscription revenue.

Its balance sheet was meanwhile "robust", with around £1.3bn of cash and available liquidity, and a net debt-to-EBITDA ratio of 1.6x.

Looking ahead, Sage said it had entered the 2023 financial year with "strong" momentum, having made strategic progress to accelerate growth.

It said it expected organic recurring revenue growth to be ahead of last year, driven by strength in Sage Business Cloud, and other revenue to decline in line with its strategy.

Operating margins are expected to trend upwards in the 2023 period "and beyond", as it focused on efficiently scaling the group.

"Sage has had a strong year, making good progress as we deliver on our strategic priorities," said chief executive officer Steve Hare.

"We significantly accelerated revenue across all key products and regions, expanded our organic operating margin and delivered strong cash flow.

"Annual recurring revenue growth of 12%, underpinned by increasing levels of new customer acquisition, is particularly encouraging and positions us well for the year ahead."

Hare said Sage's purpose of "knocking down barriers so everyone can thrive" was more important than ever.

"Sage Business Cloud solutions enable small and mid-sized businesses to streamline their processes and unlock productivity, helping them to achieve more with less.

"While we are mindful of macroeconomic uncertainties, I am confident that our resilient business model together with our strategy for delivering efficient growth, centred on our expanding digital network, will enable us to create further long-term value for all our stakeholders."

At 0811 GMT, shares in the Sage Group were up 4.5% at 789.83p.

Reporting by Josh White for Sharecast.com.

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