Shares in software group Sage rise after cloud unit boosts annual profit

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Shares in software group Sage rise after cloud unit boosts annual profit
Credit: © Reuters.

By Scott Kanowsky -- Shares in Sage Group PLC (LON: SGE ) jumped in early trading on Wednesday after the U.K. software firm reported an 8% rise in full-year income.

Annual organic operating profit, which adjusts for gains made from Sage's businesses in Switzerland and South Africa as well as losses from acquisitions, increased to £383 million (£1 = $1.1876) for the 12-month period ended on September 30. Analysts had expected the figure to come in at £382.8M.

Underpinning much of this uptick was strength at Sage's cloud division, where revenue surged by 24%. Sage said this reflected higher new customer acquisition and elevated sales to existing buyers.

Total group-wide organic revenue jumped by 9% to £1.82B.

In a statement, the Newcastle-based company added that it has "strong momentum" heading into its 2023 fiscal year, with organic recurring sales expected to expand annually thanks in particular to the cloud unit. Operating margins are also seen trending "upwards."

"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," said Chief Executive Officer Steve Hare.

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