Sage remains on target after solid trading, CEO to retire - UPDATE

8th May 2014 07:03

- Growth in software subscription boosts revenue- Increased dividend payment by 6.2 per cent - Confident of meeting targets for the full-year- CEO announces retirementFTSE-100 software firm Sage booked a five per cent increase in half-year revenue, driven by strong growth in software subscription, and said it remains confident of achieving targets for the full-year.However, Chief Executive Officer Guy Berruyer surprised with a separate announcement that he will be retiring by March 2015, sending the shares spiralling down on Thursday.Organic revenue rose to £657m for the six months ended March 31st 2014 from £626m the same time a year earlier. Operating profit rose to £180m from £165m and underlying basic earnings per share rose 8.3% to 11.12p. The Newcastle-upon-Tyne group said statutory revenue fell 7% to £657m while profit before income tax came in at £165m compared to an £8m loss the year before due to an exceptional item of £180m relating to disposals.Berruyer said: "The increase in organic recurring revenue growth demonstrating that the strategy is working well. Sage is changing, with greater focus, investment in technology to address customer needs and the move to subscription all delivering results. "We remain confident that the good first half performance will be carried through to the full year, and of achieving our target of 6% organic revenue growth in 2015."His departure surprised and disappointed the City, with broker Numis saying this will mean that "he will not be around to around to see his strategy though"."After 17 years with Sage, it seems surprising that he does not want to hang on for the last few months to see if he delivers."The group has recommended an interim dividend per share of 4.12p, up 6.2% from last time.Shares in the company were down 7.3% to 391.1p by late afternoon. CJ