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magazineSage seizes its chance to impress investors
Having missed the January tech rally, accounting tools software supplier Sage (SGE) has been making up for lost time. The share price has stormed higher since reporting first-half results on 17 May, with analysts getting excited about the prospect of cloud adoption triggering a new era of growth.
That’s important for what is now the UK’s biggest technology company by market value. Sage’s cloud revenues rose 29% in the six months to 31 March 2023, pushing annual recurring revenues up 12%, providing the sort of cash flow security that catches the eye
of investors.
Peel Hunt believes execution in the accountant practices space has been particularly sharp, claiming that about a quarter of the UK’s 20,000 accountants are now onboard with Sage.
This is an important channel into the company’s core small and mid-sized enterprise segment. With operating profit margins now moving up to 20.8%, there is renewed hope that Sage could yet get back to the 27% to 28% levels of years past.
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