November 22, 2017 / 10:09 AM / in a year

Software firm Sage sees faster growth after 10 percent profit rise

LONDON (Reuters) - British software firm Sage reported a 10 percent rise in organic operating profit to 475 million pounds ($630 million) and said its top-line growth would accelerate to 8 percent this year from 6.6 percent a year earlier.

The company, which supplies software to millions of small businesses, said on Wednesday that two acquisitions in 2017 - Fairsail and Intacct - would together add around 1 percent of revenue in the current year.

Chief Financial Officer Steve Hare said growth had accelerated in its final quarter, driven by existing customers moving to subscription products and new customers signing up for its flagship enterprise product Sage X3.

Shares in Sage, which have risen 11 percent in the last three months, were up 2.5 percent at 795 pence by 0936 GMT.

Investec, which raised its price target to 800 pence but kept a “hold” rating, said the result was slightly ahead of expectations.

But the broker had some quibbles over the second half growth rates for cyclical and recurring revenue, noting that growth in recurring revenue had slowed in the second half to 9 percent from 9.9 percent in the first.

($1 = 0.7541 pounds)

Editing by Alistair Smout, editing by Louise Heavens

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