Source: Sharecast
The FTSE 100 software company said it now expected organic total revenue growth for the 2024 financial year to be broadly in line with the approximately 9% seen in the first half.
For the six months ended 31 March, pre-tax profit rose to £203m from £139m a year earlier.
Adjusted operating profit reached £254m, exceeding consensus estimates.
Revenue advanced 10% to £1.15bn, which was slightly below consensus forecasts, while underlying annualised recurring revenue advanced 11% to £2.25bn.
The renewal rate by value stood at 102%, surpassing the previous year's rate due to increased sales to existing customers and strong retention rates.
Sage Business Cloud revenue increased 18% to £915m, including 25% growth in cloud native revenue to £353m.
Subscription penetration rose to 81%, driven by a 14% growth in subscription revenue to £937m.
Strategically, Sage said it expanded its global cloud solutions and deepened vertical-specific capabilities in the period, further strengthened by the acquisition of Bridgetown Software.
The company also noted the introduction of new AI-powered products and services such as Sage Copilot, a generative AI-powered digital assistant, although it provided no comment on its performance.
The board proposed an interim dividend of 6.95p per share, compared to 6.55p a year earlier.
“Sage performed well in the first half of the year, delivering broad-based revenue growth and significant margin expansion,” said chief executive officer Steve Hare.
“Demand for our solutions remains robust, with small and mid-sized businesses continuing to trust Sage to automate their accounting, HR and payroll workflows.
“We are resolutely focused on innovation, as both a source of near-term competitive advantage and a foundation for our long-term success.”
Hare said the company was continuing to introduce new AI-powered products and services to deliver enhanced productivity and insights, driving value for both existing and new customers.
“As we look forward, despite the ongoing macroeconomic uncertainty, I am confident that Sage's proven strategy, underpinned by continued investment, will enable us to deliver further efficient growth.”
At 0835 BST, shares in the Sage Group were down 11.51% at 1,059.72p.
Reporting by Josh White for Sharecast.com.