North America returns to growth for Sage

4th May 2011 07:17

Accountancy software firm Sage released interim figures that were ahead of some brokers' forecasts as its North American business returned to growth.Underlying profit before tax in the half-year ended 31 March rose 4% to £183.5m from £176.1m a year earlier. Underlying earnings per share (EPS) also increased 4% to 9.87p, from 9.52p the year before. Broker Matrix Group had forecast EPS of 9.7p.The broker was also slightly light with its revenue forecast of £741.6m, as sales climbed 3% to £742.7m from £718.9m, while underlying organic revenue was £728.2m, up 4% from £699.4m the year before. The 4% organic growth rate represents an acceleration from the 3% year on year growth in the second half of the previous financial year.Revenue in Europe grew 5% to £401.5m from £383.3m the year before, while revenue in North America edged up to £270.9m from £269.6m. In the Africa, Australia, Middle East and Asia geographical grouping total revenues grew 13% to £70.3m from £62.1m at the interim stage last year. Earnings before interest, tax and amortisation (EBITA) jumped 5% to £190.3m from £180.5m the year before, while the EBITA margin was maintained at 25.6%.The group enjoyed strong operating cash flow of £233.6m (H1 2010: £236.6m), representing 123% of EBITA, with net debt reducing to £106.0m at 31 March from £219.8m at the end of September 2010.The interim dividend has been hiked by 4% to 2.68p from 2.58p at the interim stage last year."We have seen an increase in business confidence for SMEs [small and medium sized enterprises] in the period, although the picture varies by geography and the outlook remains uncertain. We have continued to invest in the business in the period, including in services offered over the web. Customers have responded well to innovation in our products and services and the provision of strong customer support," claimed Guy Berruyer, chief executive officer of Sage."With growth returning to the business, a large and loyal international customer base, and a strong balance sheet, we are confident that Sage is well positioned to capitalise on its many growth opportunities, and look forward to continued progress in the second half of the year," Berruyer said. ---jh