The Sage Group plc Boosted By Rises In Revenue & Profit

The Sage Group (LSE: SGE) — the leading supplier of business software (eg, for accounting, payroll and customer relationship management) to small businesses — published its results for the year to 20 September 2014 this morning, and its share price is currently up 3.7%.

Sage said that it had reached its key financial milestones for 2014, with 5% organic revenue growth and a 37.5% organic operating profit margin. The company says that growth in software subscription revenue of 28% was the main driver of organic revenue growth.

As a result of achieving its targets, Sage says it remains confident that it will meet its 2015 targets of 6% organic revenue growth and 28% organic operating profit margin. 

Organic operating profit grew 6.7% to £360m, and underlying basic earnings per share increased by 8.2%, to 22.69p. Sage’s board is recommending a dividend of 12.12p per share, which is a rise of 7.1% over last year.

The company says that there’s been strong momentum for its Sage One ‘cloud solution’, which has seen an increase of close to 15o% in paying subscribers, the growth being fuelled by uptake in its UK & Ireland and South African markets.

CEO Stephen Kelly — who took over from Guy Berruyer at the beginning of November — commented

I would like to thank Guy Berruyer for leading Sage to deliver an encouraging set of results with a strong finish to the year. I reconfirm the Board’s financial targets for 2015 and recognise the 2014 results as an important milestone on the path to meeting them. Our financial performance demonstrates the strength of Sage’s global business and the quality of relationships it has with millions of SME customers worldwide.

Sage’s share price is now up 20% on this time last year, compared with only a 3% gain by the FTSE 100 since then. And Sage is comfortably beating the index over the longer term, too, with an 83% rise in share price over the past five years, during which time the FSTE 100 has risen 28%.

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Jon Wallis has no position in any shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.