Sage hikes dividend as cloud business takes off

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Investors cheered software firm Sage after the company announced plans to hiked its dividend and said it was on track to meet growth targets.

The Newcastle-based company, best known for its accountancy and payroll software, saw pre-tax profit fall 51% to £164.1 million in the year to September 30, due to the disposal of “non-core products” that cost it £188.2 million.

But the firm shot to the top of the FTSE on news that revenue grew 3% to £1.37 billion, on track to meet targets.

Chief executive Guy Berruyer said: “We believe we have momentum and will reach our target of 6 per cent organic growth by 2015.”

Berruyer said growth was driven by marketing new products to existing customers, such as online payment facilities and mobile apps that let people access the office remotely.

“Our growth is really driven by growing our existing customers rather than capturing additional market share,” Berruyer said.

Sage upped its dividend by 6 per cent. The shares jumped more than 9 per cent.