The UK’s largest listed software business Sage (SGE) has surprisingly parted company with its chief executive Stephen Kelly (3 Sep) in a move that left investors shocked.

Kelly joined Sage four years ago and has overseen a major overhaul at the FTSE 100 accounting and enterprise software company, including building a far more substantial cloud business.

George O’Connor, an analyst at broker Stifel, estimates Sage to be the 12th largest listed cloud vendor in the world with close on £400m of cloud revenue last year.

But ambitions to accelerate organic growth this year have gone off the rails. A slow start to 2018 culminated in a revenue warning in April sending the share price spinning lower. The stock is currently trading at 596.2p, the lowest it has been in more than two years, compared to levels above 800p in January.

Sage software is believed to be used by half of the small or medium-sized businesses in Britain, for things like payroll and human resources. It also has a substantial international business but the company has come under intense pressure from emerging rivals, cloud specialists like Xero, MYOB and Kashflow.

Sage was one of Shares picks for 2018 on the basis that it would be able to accelerate organic growth. That has evidently proved harder to execute than either the company or we envisaged. The company is now on the hunt for a new chief executive with the skill set to drive grow forward.

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